Mitek Systems Inc Q3 2024 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Mike Grondahl - Northland Securities - Analyst : Hey, guys, I'm pretty disappointing. Can you help I mean, there's about seven weeks to go in the year and it looks like you're down $11 million to $12 million in revenue and it sounds like it's because ID R&D and a couple of promotions in Mobile ID slipping I don't know. Can you just allocate the shortfall between those two buckets?

Question: Mike Grondahl - Northland Securities - Analyst : Got it, I don't know, guys, you seem to have a lot of confidence in Mobile ID, but it's just been so disappointing. I mean, have you thought about selling it or splitting the company?

Question: Mike Grondahl - Northland Securities - Analyst : As a follow-up. I mean, clearly, you're not going to be breakeven in mobile ID in 4Q? You said that, I mean, is there any chance you're going to be late '25 breakeven there? I mean, seems like it's a multiyear, some chance to breakeven.

Question: Mike Grondahl - Northland Securities - Analyst : Did you say what revenue was in Q3 for Check Fraud Defender? David Lyle - Mitek Systems Inc - Chief Financial Officer, Senior Vice President, Principal Accounting Officer, Principal Financial Officer We did not.

Question: Mike Grondahl - Northland Securities - Analyst : Got it. Okay.

Question: Jake Roberge - William Blair - Analyst : Thanks for taking the question, Scott, can you just help us understand when it became clear ID R&D wasn't going to meet numbers. And then you talked about the two banking campaigns that were pushed out into fiscal 2025 and then a few six and seven-figure transactions that were a bit more complex. Just to confirm, did any of those deals in campaigns fall completely out of the pipeline? Or is your expectation now just as they push into fiscal 2025?

Question: Jake Roberge - William Blair - Analyst : Okay, helpful. And then, Dave, can you just help us understand the expectations that underlying the guidance that you laid out for fiscal 2025, are you expecting those big ID R&D deals to close next year? And just would be helpful to understand the expectations that underlie that. David Lyle - Mitek Systems Inc - Chief Financial Officer, Senior Vice President, Principal Accounting Officer, Principal Financial Officer Yeah. To back to your original question, also, some of those deals we did take out of the forecast completely and they could come back but nothing that we want to rely on, obviously. And then in terms of the what's going to happen in '25, one of the reasons I made the comment about ID R&D products portfolio revenue starting to grow more in the second half is because we don't have enough clarity on exactly when those because close, candidly, they could close in the short term or they could close in oh in the next 18 months. That's kind of the range of prospects there. But we we're working hard to make those close and as fast as possible that just with these big multinational guys. And as you know, they just take a long time to get through that process.

Question: Jake Roberge - William Blair - Analyst : Okay. Thanks for taking the questions.

Question: George Sutton - Craig-Hallum Capital Group LLC - Analyst : Thank you. I wondered if you could walk through the renewal dynamics. You talked about repricing issues as you were going through renewals my assumption has been that you're moving folks from point solutions to the broader platform and therefore you would see fairly good pricing dynamics as that happened. Can you just give me some clarity on that?

Question: George Sutton - Craig-Hallum Capital Group LLC - Analyst : Just so on the Check Fraud Defender side, I think there's been some scepticism that a top five bank would not use your system given their broad range of what they were seeing and therefore not benefiting from the network effect. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 08, 2024 / 9:00PM, MITK.OQ - Q3 2024 Mitek Systems Inc Earnings Call So that so the fact you did sign a top-5 bank, I think is very important. I just want you to confirm that in your marketing, but can you talk more broadly about you mentioned that demonstrably higher? I obviously, as banks are seeing this, I mean, it just seems simplistically to me this would be a very easy offering to sell given that higher ROI. So any updates on the kind of the sales process there?

Question: George Sutton - Craig-Hallum Capital Group LLC - Analyst : Understand. Okay. That's it for me. Thank you.

Question: Derek Greenberg - Maxim Group - Analyst : Hi, this is Derek Greenberg on for Alan. My first question was just on you had mentioned the transition from agent reviewed on transactions to more automated. And I was wondering if maybe you just had any metrics in terms of what percent is automated versus agent reviewed and what the relative margin differences as this continues to shift as well as just the capacity in terms of the percentage that can be automated versus manually reviewed? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 08, 2024 / 9:00PM, MITK.OQ - Q3 2024 Mitek Systems Inc Earnings Call

Question: Derek Greenberg - Maxim Group - Analyst : Okay. Got it. That makes sense. And then my other question is just dumb with the partnerships you had with like Experian and Equifax, just maybe some color and some updates on how that's progressing.

Question: Derek Greenberg - Maxim Group - Analyst : Got it. Thank you.