Mitek Systems Inc Q4 2025 Earnings Call Transcript

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

Question: Mike Grondahl - Northland Capital Markets - Analyst : Dave, if your SaaS business is doing really well, if you had to sort of distill one or two drivers behind that growth, how would you describe those?

Question: Mike Grondahl - Northland Capital Markets - Analyst : Got it. And then any more details you can share on Check Fraud Defender number of banks or revenue or just kind of progress momentum you're seeing there?

Question: Mike Grondahl - Northland Capital Markets - Analyst : Got it. Thank you

Question: Jacob Roberge - William Blair & Company L.L.C - Analyst : Hey guys, thanks for taking the questions and great to see the strong results, good quarter there. Ed, when you initially joined, you talked about getting organic growth back above 10%. Obviously, still building some things out on the fraud side. But now that you've been here for over a year, do you feel like you're starting to get more visibility into that path with SaaS really starting to accelerate this year?

Question: Jacob Roberge - William Blair & Company L.L.C - Analyst : Okay. That's helpful. And then now that you've done a lot of the heavy lifting on consolidating the platforms and also kind of your go-to-market motion into One Mitek over the past year, what inning do you feel like we're in with those changes on both the go-to-market and product into the One Mitek story? And then how do you feel like the visibility into the business has changed over the past year now that you're not operating several different sales forces and systems?

Question: Jacob Roberge - William Blair & Company L.L.C - Analyst : Very helpful. And then, Dave, if I could just sneak one more in. I know you're still sunsetting some of the legacy hardware assets. Can you help us understand what that headwind will be on revenue growth this year? And will those hardware products be fully sunsetted this year? David Lyle - Mitek Systems Inc - Chief Financial Officer, Senior Vice President, Principal Accounting Officer, Principal Financial Officer Sure. Yes, we've actually expected a more rapid falloff, as you know, in revenue from those -- that hardware product. It just survived for longer than we thought, which actually is a good thing from a revenue perspective. But we're down into the immateriality level of revenue dollars. So it will have a little bit of an impact, but nothing like it's had historically in the last couple of years.

Question: Surinder Thind - Jefferies LLC - Analyst : Thank you, and Ed, can you maybe talk about the level of investment that you're making at this point? Is that kind of a normalized pace? Or are we early in an investment cycle where maybe there's a lot of ideas to pursue given how things are changing? Just any color on that as you think about the year ahead and obviously, the next couple of years?

Question: Surinder Thind - Jefferies LLC - Analyst : So, Ed, maybe a clarification on my part. I guess what I was trying to ask is more about like are we in a period where you could -- if you wanted to invest even more at this point? Or are you pursuing all of the ideas that you want to pursue in relationship to obviously, I understand you have to balance margins and stuff. But just that's what I was trying to get a better handle on the longer term.

Question: Surinder Thind - Jefferies LLC - Analyst : Got it. And then when we kind of think about -- you talked a little bit about Check Fraud Defender and all the good stuff that's going on. You also highlighted the idea that some of the larger financial institutions are taking their time. Is that something that might potentially change as we go ahead? Or is that just as you've now kind of worked through this process, that's just how it is, meaning that if you layer on a number of these FIs taking time, ultimately, the growth rate would accelerate, right? But I'm just trying to understand the dynamic there of how we think about the decision-making at the large FIIs and what that really means for the FD's growth rate.

Question: Surinder Thind - Jefferies LLC - Analyst : That's helpful. Thank you.

Question: George Sutton - Craig-Hallum Capital Group LLC - Analyst : Thanks guys nice results. So when we're talking about synthetic fraud, I wondered if we can get a little more granular in terms of how the discussions with the customers are going. You've been trying to migrate folks from point solutions into the MiVIP platform and the full stack. Is synthetic fraud helping drive those discussions? Or are you seeing new interest from new parties specific around synthetic fraud?

Question: George Sutton - Craig-Hallum Capital Group LLC - Analyst : Got you. So I wondered if we could walk through the pilot process for the banks, these large banks. Obviously, the network effect is starting to occur here. I'm just curious, how are they viewing their pilot process? Are they're obviously looking for incremental value of being part of the consortium versus something they would have identified themselves. Can you just walk through kind of the touch points there?

Question: George Sutton - Craig-Hallum Capital Group LLC - Analyst : Got you. Just one other thing. We're 80% or so through the fiscal first quarter. And we also line up with the fiscal year-ends of most of your customers. I'm just curious if you can -- are there any sort of things you would point to that might be a focus for this quarter versus what you were seeing in Q3 or any meaningful deltas?

Question: George Sutton - Craig-Hallum Capital Group LLC - Analyst : Perfect thanks guys. Thanks.

Question: Allen Klee - Maxim Group LLC - Analyst : Yes, good afternoon, evening, could you comment a little on the mobile deposit business on -- in terms of -- it looks like if you back in, you're implying a decline. Are you thinking that this business is kind of going to be in secular decline or some stability at some point? Or how are you thinking about it?

Question: Allen Klee - Maxim Group LLC - Analyst : Okay. And then just from a capital structure perspective, is it reasonable to assume that you will pay off the entire amount of the convert when it comes due or that you might use some of your facilities to keep more cash around? David Lyle - Mitek Systems Inc - Chief Financial Officer, Senior Vice President, Principal Accounting Officer, Principal Financial Officer Yeah. The decision -- so first of all, yes, we're going to pay the debt off completely when it's due February 1, 2026. We haven't yet communicated how we're going to do that. We have that $100 million facility, the $75 million term and the $25 million revolver to give us flexibility. We'll make that decision closer to the time we actually pay it off. It could be a combination of both borrowings as well as cash from our cash balance.

Question: Allen Klee - Maxim Group LLC - Analyst : Okay, thank you. Thank you, Alan.