MITK Q2 2025: Pull-forward Mobile Deposit Order Lifts Revenue
- Pull-forward Orders Boosting Revenue: Management highlighted that a very large mobile deposit customer order was received earlier than expected in Q2, contributing to revenue outperformance and suggesting robust underlying demand.
- Strong Organic Growth and Expansion: The Q&A emphasized continued efforts to add new logos and expand current client relationships, driven by advanced fraud and identity solutions, signaling sustainable organic growth.
- Resilient Demand in an Evolving Fraud Landscape: Executives noted that customer feedback confirms a growing need for secure digital identity and layered fraud prevention, reinforcing the company's leadership position in an increasingly challenging environment.
- Revenue Laggards: The identity product portfolio grew only 4% year-over-year despite a 9% surge in identity SaaS, which may signal challenges in scaling the broader identity suite effectively.
- Lumpy Revenue Exposure: Approximately 70% of deposits products revenue comes from term licenses, exposing the company to revenue volatility due to renewal cycles and inherent lumpiness.
- Early-stage Monetization: Check Fraud Defender is still in its early monetization phase, posing uncertainty regarding its future contribution to overall profitability.
| Metric | YoY Change | Reason |
|---|---|---|
Total Revenue | +10.5% YoY increase (from $46.97M to $51.90M) | The overall revenue growth reflects stronger business performance across multiple segments. This improvement builds on earlier period dynamics where service and hardware segments started to outperform, with better customer uptake and favorable revenue recognition practices helping to offset past headwinds. |
Software and Hardware revenue | +7.3% YoY increase (from $24.89M to $26.70M) | Growth in Software and Hardware revenue is largely driven by a marked recovery within the deposits category, which benefited from more timely contract executions and renewed ordering activity. This improvement contrasts with previous period adjustments (such as deferred license revenue) that had weighed on Q2 2024 results. |
Deposits within Software and Hardware | +250% YoY increase (from $7.01M to $24.70M) | The dramatic surge in deposits revenue indicates a significant shift in contract timing and order volume, perhaps due to a strong multi-year mobile deposit contract coming fully into revenue recognition. This contrasts with Q2 2024, when deposits were lower partly because revenue had been front-loaded or deferred based on previous contractual terms. |
Identity Verification within Software and Hardware | -87% YoY decline (from $15.07M to $2.00M) | The steep decline in identity verification revenue hints at a strategic shift away from legacy offerings and market pressures that had already impacted Q2 2024. This drop is consistent with efforts to transition to newer, unified identity platforms, thereby reducing revenue recognized under the old segmentation. |
Services and Other revenue | +14% YoY increase (from $22.08M to $25.20M) | Improved services revenue is driven by stronger SaaS performance and enhanced gross margins—up nearly 300 basis points—which reflects better automation, cost efficiencies, and favorable revenue recognition practices. These initiatives have built upon improvements seen in the previous period, further solidifying the higher revenue base. |
| Metric | Period | Previous Guidance | Current Guidance | Change |
|---|---|---|---|---|
Revenue Guidance | FY 2025 | no prior guidance [n/a] | $170 million to $180 million | no prior guidance |
Adjusted EBITDA Margin Guidance | FY 2025 | no prior guidance [n/a] | 25% to 28% (with the lower end raised by 100 basis points) | no prior guidance |
Non-GAAP Operating Expense Guidance | Q2 2025 | no prior guidance [n/a] | Approximately $26 million, plus or minus $1 million | no prior guidance |
Depreciation Expense Guidance | Q2 2025 | no prior guidance [n/a] | Around 70 basis points of revenue | no prior guidance |
Non-GAAP Operating Expense Trend | FY 2025 | no prior guidance [n/a] | Anticipated to modestly increase sequentially throughout the remainder of the year as investments are made in R&D and sales | no prior guidance |
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Revenue Guidance
Q: Were pull-forwards included in guidance?
A: Management noted one large mobile deposit order moved forward into Q2, contributing to stronger-than-expected revenue, reflecting diligent deal execution. -
Check Fraud Progress
Q: How are checking accounts and ACV targets progressing?
A: The team reported data set coverage now at 23% of U.S. checking accounts, indicating healthy progress toward the $20M ACV target, even as conversion takes time. -
SaaS Trend
Q: How is SaaS mix trending going forward?
A: Management emphasized that SaaS revenue is growing 15% year-over-year and now makes up 40% of total revenue, with plans to see it eventually become the majority of their business. -
Organic Growth
Q: What is the new versus expansion mix?
A: They explained that organic growth is driven by both new customer wins and expanding existing relationships, with the mix varying quarter-to-quarter. -
SaaS Timing
Q: What is the timeline for majority SaaS revenue?
A: While aiming for SaaS to constitute over half of revenue, management did not peg a specific calendar or fiscal year for this goal, indicating a longer-term focus. -
DHS Submission
Q: What happened with the DHS liveness submission?
A: Management highlighted that their submission in the DHS blind assessment delivered industry-leading responsiveness and fraud detection, validating their technology’s competitiveness. -
Seasonality
Q: Has Q3/Q4 seasonality shifted?
A: They expect seasonality to remain similar to previous years, with Q3 trending slightly higher than Q4 due to mobile deposit renewal patterns. -
Onboarding Cycle
Q: How much faster is document onboarding?
A: The new automated system has appreciably accelerated onboarding cycle times, though management did not provide specific numerical improvements. -
Customer Feedback
Q: What feedback did customers provide?
A: Executives noted that customers expressed strong appreciation for the company’s execution and technology, reinforcing positive sentiment across diverse regions.