Business Wire | Nov 4, 2021 04:05PM EDT

Mitek Reports Record Revenue and Earnings for Full Year Fiscal 2021

Nov. 04, 2021

SAN DIEGO--(BUSINESS WIRE)--Nov. 04, 2021--Mitek (NASDAQ: MITK) (www.miteksystems.com), a global leader in digital fraud prevention, today reported financial results for both its fiscal 2021 fourth quarter and full year ended September 30, 2021. Total revenue for the full year fiscal 2021 increased 18% year over year, driven by increased demand for both digital identity verification solutions and mobile deposit, as commerce continues its rapid shift to digital channels.

Fiscal Fourth Quarter 2021 Financial Highlights

* Total revenue increased 9% year over year to a record $33.3 million. * GAAP net income was $2.2 million, or $0.05 per diluted share. * Non-GAAP net income was $10.1 million, or $0.22 per diluted share. * Cash flow from operations was $12.3 million. * Total cash and investments were $227.4 million at the end of the quarter.

Fiscal 2021 Full Year Financial Highlights

* Total revenue increased 18% year over year to a record $119.8 million. * GAAP net income was $8.4 million, or $0.19 per diluted share. * Non-GAAP net income increased 19% year over year to a record $34.2 million, or $0.76 per diluted share. * Full year cash flow from operations was a record $37.4 million.

"Fiscal 2021 was a breakout year for Mitek," said CEO Max Carnecchia. "We again achieved record revenue, earnings and cash flow from operations, as we innovated faster and served more customers than ever before. Launching into fiscal 2022, we are strongly positioned, with both our market leading offerings and innovative product roadmap, to expand further into the identity authentication market and deliver the essential technologies required to help our customers fight identity fraud across the omnichannel."

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 800-367-2403 (US and Canada) or +1 334-777-6978 (International) and give the participant passcode 8698102.

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 digital fraud prevention using its mobile capture and digital identity verification solutions built on the latest advancements in computer vision and artificial intelligence. Mitek's identity verification solutions enable organizations to protect their customers by verifying 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, account protection, 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, 2020, 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, restructuring costs, intellectual property litigation costs, executive transition costs, acquisition-related costs and expenses, amortization of debt discount and issuance 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 September 30, 2021 30, 2020

ASSETS

Current assets:

Cash and cash equivalents $ 30,312 $ 19,986

Short-term investments 149,057 40,035

Accounts receivable, net 16,602 15,612

Contract assets 4,080 5,187

Prepaid expenses 1,920 1,338

Other current assets 2,085 1,968

Total current assets 204,056 84,126

Long-term investments 48,051 1,963

Property and equipment, net 3,671 3,610

Right-of-use assets 7,056 5,407

Intangible assets, net 28,734 19,289

Goodwill 62,687 35,669

Deferred income tax assets 10,511 13,484

Convertible senior notes hedge 48,208 -

Other non-current assets 6,310 5,606

Total assets $ 419,284 $ 169,154

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Accounts payable $ 2,507 $ 3,909

Accrued payroll and related taxes 11,776 8,882

Deferred revenue, current portion 10,381 7,973

Lease liabilities, current portion 1,943 1,819

Acquisition-related contingent consideration 10,300 753

Other current liabilities 1,552 1,020

Total current liabilities 38,459 24,356

Convertible senior notes 120,918 -

Embedded conversion derivative 48,208 -

Deferred revenue, non-current portion 955 1,597

Lease liabilities, non-current portion 6,588 5,327

Deferred income tax liabilities 4,117 4,649

Other non-current liabilities 6,778 982

Total liabilities 226,023 36,911

Stockholders' equity:

Preferred stock, $0.001 par value, 1,000,000 shares - - authorized, none issued and outstanding

Common stock, $0.001 par value, 60,000,000 sharesauthorized, 44,168,745 and 41,779,853 issued and 44 42 outstanding, as of September 30, 2021 and September30, 2020, respectively

Additional paid-in capital 199,935 146,518

Accumulated other comprehensive loss (943 ) (323 )

Accumulated deficit (5,635 ) (13,994 )

Treasury stock, at cost, 7,773 and no shares as ofSeptember 30, 2021 and September 30, 2020, (140 ) - respectively

Total stockholders' equity 193,261 132,243

Total liabilities and stockholders' equity $ 419,284 $ 169,154

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,

2021

2020

2021

2020

Revenue

Software and hardware

$

17,781

$

17,972

$

60,069

$

54,152

Services and other

15,490

12,666

59,728

47,158

Total revenue

33,271

30,638

119,797

101,310

Operating costs and expenses

Cost of revenue-software and hardware

260

1,045

2,468

3,303

Cost of revenue-services and other

2,940

2,532

12,072

9,889

Selling and marketing

8,449

7,302

32,497

27,646

Research and development

8,241

6,096

28,042

22,859

General and administrative

6,081

5,902

22,490

22,284

Acquisition-related costs and expenses

2,945

1,691

8,521

6,575

Restructuring costs

-

-

-

(114

)

Total operating costs and expenses

28,916

24,568

106,090

92,442

Operating income

4,355

6,070

13,707

8,868

Interest expense

1,586

-

5,129

-

Other income, net

105

61

655

541

Income before income taxes

2,874

6,131

9,233

9,409

Income tax provision

(636

)

(1,135

)

(824

)

(1,595

)

Net income

$

2,238

$

4,996

$

8,409

$

7,814

Net income per share-basic

$

0.05

$

0.12

$

0.19

$

0.19

Net income per share-diluted

$

0.05

$

0.12

$

0.19

$

0.18

Shares used in calculating net income per share-basic

44,616

41,770

43,509

41,410

Shares used in calculating net income per share-diluted

46,236

43,101

45,083

42,533

MITEK SYSTEMS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(amounts in thousands except per share data)

Three Months Ended Twelve Months Ended September 30, September 30,

2021 2020 2021 2020

Revenue

Software and hardware $ 17,781 $ 17,972 $ 60,069 $ 54,152

Services and other 15,490 12,666 59,728 47,158

Total revenue 33,271 30,638 119,797 101,310

Operating costs and expenses

Cost of revenue-software and 260 1,045 2,468 3,303 hardware

Cost of revenue-services and 2,940 2,532 12,072 9,889 other

Selling and marketing 8,449 7,302 32,497 27,646

Research and development 8,241 6,096 28,042 22,859

General and administrative 6,081 5,902 22,490 22,284

Acquisition-related costs and 2,945 1,691 8,521 6,575 expenses

Restructuring costs - - - (114 )

Total operating costs and 28,916 24,568 106,090 92,442 expenses

Operating income 4,355 6,070 13,707 8,868

Interest expense 1,586 - 5,129 -

Other income, net 105 61 655 541

Income before income taxes 2,874 6,131 9,233 9,409

Income tax provision (636 ) (1,135 ) (824 ) (1,595 )

Net income $ 2,238 $ 4,996 $ 8,409 $ 7,814

Net income per share-basic $ 0.05 $ 0.12 $ 0.19 $ 0.19

Net income per share-diluted $ 0.05 $ 0.12 $ 0.19 $ 0.18

Shares used in calculating net 44,616 41,770 43,509 41,410 income per share-basic

Shares used in calculating net 46,236 43,101 45,083 42,533 income per share-diluted

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,

2021

2020

2021

2020

Net income

$

2,238

$

4,996

$

8,409

$

7,814

Non-GAAP adjustments:

Acquisition-related costs and expenses

2,945

1,691

8,521

6,575

Intellectual property litigation costs

330

1,186

974

3,217

Executive transition costs(1)

-

-

428

-

Stock compensation expense

2,950

2,439

11,532

9,551

Restructuring costs

-

-

-

(114

)

Amortization of debt discount and issuance costs

1,292

-

4,373

-

Income tax effect of pre-tax adjustments

(1,806

)

(1,067

)

(6,017

)

(4,267

)

Cash tax difference(2)

2,183

2,173

5,964

5,832

Non-GAAP net income

10,132

11,418

34,184

28,608

Non-GAAP income per share-basic

$

0.23

$

0.27

$

0.79

$

0.69

Non-GAAP income per share-diluted

$

0.22

$

0.26

$

0.76

$

0.67

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

44,616

41,770

43,509

41,410

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

46,236

43,101

45,083

42,533

MITEK SYSTEMS, INC.

NON-GAAP NET INCOME RECONCILIATION

(Unaudited)

(amounts in thousands except per share data)

Three Months Ended Twelve Months Ended September 30, September 30,

2021 2020 2021 2020

Net income $ 2,238 $ 4,996 $ 8,409 $ 7,814

Non-GAAP adjustments:

Acquisition-related costs and 2,945 1,691 8,521 6,575 expenses

Intellectual property litigation 330 1,186 974 3,217 costs

Executive transition costs^(1) - - 428 -

Stock compensation expense 2,950 2,439 11,532 9,551

Restructuring costs - - - (114 )

Amortization of debt discount and 1,292 - 4,373 - issuance costs

Income tax effect of pre-tax (1,806 ) (1,067 ) (6,017 ) (4,267 )adjustments

Cash tax difference^(2) 2,183 2,173 5,964 5,832

Non-GAAP net income 10,132 11,418 34,184 28,608

Non-GAAP income per share-basic $ 0.23 $ 0.27 $ 0.79 $ 0.69

Non-GAAP income per share-diluted $ 0.22 $ 0.26 $ 0.76 $ 0.67

Shares used in calculatingnon-GAAP net income per 44,616 41,770 43,509 41,410 share-basic

Shares used in calculatingnon-GAAP net income per 46,236 43,101 45,083 42,533 share-diluted

(1)

Comprised of costs associated with the transition of the company's former chief financial officer. 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.

(2)

The company's non-GAAP net income is calculated using a cash tax rate of 3% and 0% in fiscal years 2021 and 2020, 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, 2021 and 2020 was 22% and 19%, respectively. The company's effective tax rate used for the purposes of calculating GAAP net income for the twelve months ended September 30, 2021 and 2020 was 9% and 17%, respectively.

View source version on businesswire.com: https://www.businesswire.com/news/home/20211104006256/en/

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