• Revenue: Fiscal Q4 2024 revenue at $43.2 million, a 15% year-over-year growth.
• Identity Products Revenue: Grew 13% year-over-year in Q4.
• Deposit Products Revenue: Grew 17% year-over-year in Q4.
• Full Year Revenue: Fiscal 2024 revenue at $172.1 million, roughly flat year-over-year.
• Adjusted EBITDA Margin: Fiscal 2024 margin at 26%.
• Nongaap Operating Income: Q4 at $15 million, a 34.8% margin.
• Free Cash Flow: Generated $30.3 million during fiscal 2024.
• Cash and Investments: Ended fiscal 2024 with $141.8 million, a $6.8 million increase year-over-year.
• Share Repurchase: Purchased 2.2 million shares for $24.2 million in fiscal 2024.
• Fiscal 2025 Revenue Guidance: Projected range of $170 to $180 million.
• Adjusted EBITDA Margin Guidance: Fiscal 2025 expected range of 24% to 28%.

• Warning! GuruFocus has detected 4 Warning Sign with MITK.

Release Date: December 16, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Mitek Systems Inc (NASDAQ:MITK) has an experienced leadership team in place, focused on returning to durable growth.
• The company is nearing profitability on the identity side of its business.
• Mitek is becoming a comprehensive solution for fighting fraud and mitigating identity-related cybersecurity risks.
• Organic growth is a near-term focus, with operational discipline aimed at long-term value creation.
• The company has a strong history of innovation, serving over 7,900 companies globally, including financial institutions, telecoms, fintech companies, and marketplaces.

Negative Points

• The company has faced challenges due to executive turnover and major acquisitions, which have strained accounting, finance, and legal teams.
• Identity products have historically been cash-consuming and have diluted overall consolidated adjusted EBITDA margins.
• There is continued pricing pressure in mobile verify products and small declines in biometrics point solutions.
• The COVID-19 pandemic accelerated digital transformation, which outpaced the company's operational infrastructure.
• The transition of some on-premise Check Fraud Defender customers to the consortium model may create a small revenue headwind.

Q & A Highlights

Q: Can you help us understand the focus on organic growth and the medium-term growth opportunity for Mitek? A: Ed West, CEO: Our focus is on organic growth by integrating solutions, particularly on the identity side with My VIP, and rolling out new solutions like Digital Fraud Defender. We aim to leverage our strong relationships with financial institutions to drive growth. We are targeting a return to double-digit growth, with a medium-term opportunity for low teens growth, once we stabilize and address past challenges.

Q: How are conversations with new customers evolving for Check Fraud Defender, and are there any large partners you might activate this year? A: Ed West, CEO: The ROI for Check Fraud Defender is compelling, and as more financial institutions become familiar with it, we expect quicker adoption. We have already built data sets on 17% of checking accounts in the U.S., which enhances the value of our consortium model.

Q: What is Mitek's competitive position in mobile check deposit, and how do you view pricing power? A: Ed West, CEO: Mitek holds a dominant position with over 7,000 financial institutions using our solutions. We will continue to ensure our pricing reflects the value we provide, maintaining competitiveness and aligning with market value.

Q: Can you provide more details on the investment in Check Fraud Defender and when you might disclose quarterly revenue? A: David Lyle, CFO: We ended the year with a $10 million ACV in Check Fraud Defender and expect it to more than double this year. We are moving towards more ACV reporting to better reflect economic value, and the investment impact on margins is expected to be low to mid-single digits.

Q: How does Mitek plan to manage the integration and transformation program, and what is the expected timeline? A: Ed West, CEO: We aim to move swiftly with a clear focus on integrating platforms and improving automation. The goal is to drive organic growth and margin expansion, with significant progress expected this year, though the process will continue into the next year.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.