Executive Summary

Q1 FY25 revenue was $37.3M (roughly flat y/y) as strong SaaS growth (+29% y/y) and Identity momentum were offset by lower software license sales; non-GAAP EPS was $0.15 and Adjusted EBITDA was $7.8M (21% margin) .
Management maintained FY25 revenue guidance at $170–$180M and raised the lower end of Adjusted EBITDA margin guidance to 25%–28% (from 24%–28%) on cost efficiency gains and mix improvement; Q2 non-GAAP opex guided to ~$26M ± $1M .
Identity platform (MiVIP) and fraud solutions are key growth vectors: Identity SaaS +26% y/y, MiVIP transactions +60% y/y, and Check Fraud Defender (CFD) ACV approached ~$12M with a new top-10 U.S. bank signed; services gross margin rose ~300 bps y/y to 77% .
Balance sheet remains strong (cash & investments $137.9M) as MITK moderates buybacks ($3.3M in Q1) while evaluating the optimal path to address $155M converts due Feb 1, 2026 (0.75% coupon; $20.85 conversion; effective dilution threshold >$26 with hedges/warrants) .

What Went Well and What Went Wrong

What Went Well
- SaaS acceleration and Identity momentum: “results ahead of our expectations in our SaaS products, which grew 29% year over year… we are encouraged by the performance of our Identity product portfolio” — CEO Ed West . Identity SaaS +26% y/y; MiVIP transactions +60% y/y on expansion with existing customers .
- Fraud franchise strengthening: CFD ACV approached ~$12M; signed a top-10 FI with plan to go-live early next quarter; goal to double ACV in FY25; consortium now covers ~18% of U.S. checking accounts (vs ~17% in Q4) .
- Margin and cash discipline: Services GAAP gross margin improved ~300 bps y/y to 68.3% (highest quarterly services margin in ~3 years on non-GAAP basis 77%); Q1 Adjusted EBITDA +32% y/y to $7.8M; LTM FCF $40.2M; FY25 EBITDA margin guidance floor raised 100 bps .
What Went Wrong
- License softness and segment mix: Software and hardware revenue declined 25% y/y to $12.0M, with Deposits software down to $11.1M (vs $14.0M) and Identity software down to $0.9M (vs $1.9M) as timing of mobile deposit renewals created “air pockets” .
- GAAP loss amid restructuring and non-cash items: GAAP net loss of $(4.6)M (−$0.10) included $0.8M restructuring, $4.5M SBC, $2.1M amortization of debt costs, and non-recurring audit/legal costs .
- Sequential opex increase and near-term spend uptick: Non-GAAP opex rose sequentially on bonus accrual reset/normalization, and management expects modest sequential opex increases through FY25 as it invests in R&D and sales .

Financial Results

Metric	Q3 2024	Q4 2024	Q1 2025
Revenue ($M)	$45.0	$43.2	$37.3
GAAP Diluted EPS	$0.00	$0.18	$(0.10)
Non-GAAP Diluted EPS	$0.25	$0.33	$0.15
Adjusted EBITDA ($M)	—	$15.4	$7.8
Adjusted EBITDA Margin (%)	—	36%	21%

Margins	Q3 2024	Q4 2024	Q1 2025
GAAP Gross Margin %	—	78.0%	75.1%
Non-GAAP Gross Margin %	—	86.0%	84.5%
Services GAAP Gross Margin %	—	67.3%	68.3%

Segment revenue disaggregation ($M):

Segment	Q3 2024	Q4 2024	Q1 2025
Deposits Revenue	$29.286	$23.684	$19.285
Identity Revenue	$15.690	$19.538	$17.969
Total	$44.976	$43.222	$37.254

Selected KPIs and balance sheet:

KPI	Q3 2024	Q4 2024	Q1 2025
SaaS Revenue Growth y/y	—	—	+29%
Identity SaaS Growth y/y	—	—	+26%
Deposit SaaS Growth y/y	—	—	+64%
MiVIP Transaction Volume y/y	—	—	+60%
Services GAAP GM %	—	67.3%	68.3%
LTM SaaS Revenue	—	—	$67.8M; 39% of LTM revenue
LTM Identity Revenue	—	$68.5M	$70.7M
Cash & Investments ($M)	$133.2	$141.8	$137.9
LTM Free Cash Flow ($M)	—	—	$40.2
Shares Repurchased (QTD)	0.820M; $10.0M	1.4M; $14.2M	0.4M; $3.3M
Convertible Senior Notes	$141.5M carrying value	$143.6M carrying value	$145.7M carrying value ; $155M face; 0.75% coupon; due 2/1/26; $20.85 conversion; effective dilution >$26 with hedges/warrants

Vs Estimates: S&P Global consensus detail was unavailable at the time of analysis due to an API limit; therefore, explicit “vs. consensus” comparisons are not provided for Q1 FY25. Management noted results were ahead of internal expectations in SaaS .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	FY2025	$170M–$180M (12/16/24)	$170M–$180M (2/10/25)	Maintained
Adjusted EBITDA Margin	FY2025	24%–28% (12/16/24)	25%–28% (2/10/25)	Raised lower end by 100 bps
Non-GAAP Operating Expense	Q2 FY2025	—	~ $26M ± $1M (modeling guide)	New
Depreciation Expense	Q2 FY2025	—	~0.7% of revenue	New

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3 FY24, Q4 FY24)	Current Period (Q1 FY25)	Trend
Identity platform (MiVIP) & AI	Q3: identity challenges cited; Q4: focus on AI-driven solutions and operational excellence	MiVIP consolidation; +60% y/y transactions; centralizing ML; Identity SaaS +26% y/y	Improving execution and scale
Fraud solutions (CFD)	Q3/Q4: building fraud capabilities; general commentary	ACV ~ $12M; signed top-10 FI; aim to double ACV in FY25; 18% account dataset coverage	Rapid traction; network effects building
Revenue phasing (Deposits license timing)	Q3: guidance revised; commentary on timing	Anticipated “air pockets” in mobile deposit renewals; LTM Deposits $101.8M cited	Timing variability persists but predictable usage
Margin/cost discipline	Q4: strong EBITDA margin, non-GAAP opex control	Services margin +~300 bps y/y; raised FY25 EBITDA margin floor; opex to rise modestly for growth	Positive mix/efficiency tailwinds
Capital structure	—	Roadmap to address $155M converts due 2/1/26; ample liquidity; moderated buybacks	Proactive planning; flexibility preserved

Management Commentary

“We delivered a solid first quarter, with results ahead of our expectations in our SaaS products, which grew 29% year over year… strengthening the company’s foundation for durable, profitable revenue growth in fiscal 2026 and beyond.” — CEO Ed West .
“Total SaaS revenue grew 29% y/y… deposit SaaS +64% and identity SaaS +26%, driven by CFD and MiVIP, respectively.” — Prepared remarks .
“Services… gross margin [non-GAAP]… 77%, an improvement of nearly 300 basis points y/y and our highest quarterly services gross margin in 3 years.” — CFO Dave Lyle .
“CFD’s ACV… continued in Q1… now approaching $12 million… we… signed another top 10 FI… goal remains to double CFD’s ACV in fiscal ’25.” — CEO Ed West .

Q&A Highlights

Identity growth and pricing: Mobile Verify pricing pressure was less impactful in Q1; the focus is to migrate customers to MiVIP to enhance value and mitigate pricing pressure over time .
CFD go-to-market and partners: Early-stage but growing partner channel; consortium data scale (18% of U.S. accounts) yields compelling ROI; sales cycles vary but can be long at large FIs .
Pipeline and sales cycles: Large ID R&D and banking campaigns expected to benefit 2H FY25 into FY26; double-digit growth potential discussed qualitatively .
Organization/Execution: Restructuring completed in Q1; teams aligned; near-term focus on execution rather than further structural changes .
Deposits timing: Q1 mobile deposit reorder timing largely as expected; transactional volume remains stable (~1.2B annual run-rate referenced in prepared comments) .

Estimates Context

Wall Street consensus estimates (S&P Global) for Q1 FY25 and near-term periods were unavailable at the time of this analysis due to data-access limits; therefore, explicit “vs. consensus” revenue/EPS comparisons are not included. Management stated SaaS results were ahead of internal expectations .
Implications: With the EBITDA margin floor raised to 25%, consensus models may need to reflect improved FY25 profitability mix; near-term opex phasing (Q2 guide) and license timing should inform quarterly cadence .

Key Takeaways for Investors

Mix shift to SaaS (MiVIP, CFD) is improving quality of revenue and margins despite lumpiness in software license renewals; services gross margin continues to expand .
Identity is on track toward the $80–$85M “fulcrum point” for margin accretion (LTM Identity $70.7M), aided by platform migration and automation gains .
Fraud remains a secular tailwind; CFD’s network effects (ACV ~ $12M; top-10 FI added; 18% account data coverage) and a public partnership launch with CSI bolster traction and distribution .
Profitability trajectory improved: Q1 Adjusted EBITDA +32% y/y, and FY25 EBITDA margin floor increased; however, non-GAAP opex will rise to support growth, tempering near-term margin expansion .
Capital structure watch: $155M converts due Feb 1, 2026 — management cites multiple avenues to retire/refinance and has moderated buybacks to preserve flexibility .
Near-term trading setup: Quarterly revenue cadence will be influenced by deposit license timing; investors should focus on SaaS growth indicators (MiVIP migration, CFD ACV/partner adds) and services margin .
Medium-term thesis: If platform migration and fraud expansion continue, FY26 setup supports durable, profitable growth with a higher recurring mix and operating leverage .

Additional relevant press release in period:

CSI launched a teller-line check fraud detection tool enabled by Mitek, expanding CFD’s reach via partners — a distribution and adoption catalyst for community banks .

MITEK SYSTEMS INC (MITK)·Q1 2025 Earnings Summary