Executive Summary

Q4 FY2024 delivered solid year-over-year growth and profitability: revenue $43.2M (+15% YoY), GAAP operating margin 18%, GAAP diluted EPS $0.18; non-GAAP operating income $15.0M (35% margin) and adjusted EBITDA $15.4M (36% margin) .
Management introduced FY2025 guidance: revenue $170–$180M and adjusted EBITDA margin 24–28%; near-term focus is organic growth, SaaS mix expansion, and cost discipline while investing in Check Fraud Defender (CFD) .
Identity portfolio showed progress with MiVIP and fraud capabilities; company targets $80–$85M run-rate in Identity for margin accretion; automation reduced identity direct cost per transaction >25% in FY2024 .
Deposits stable longer-term with check volumes offset by rising mobile adoption; CFD ACV >$10M (+~60% YoY), aiming to more than double ACV in FY2025, though some GAAP revenue could shift from term license to ratable SaaS .
Wall Street consensus from S&P Global was unavailable at time of request; beats/misses vs estimates cannot be assessed. Values retrieved from S&P Global were unavailable due to access limits.

What Went Well and What Went Wrong

What Went Well

Q4 revenue and profitability up strongly: revenue $43.2M (+15% YoY), GAAP operating income $7.7M (18% margin), adjusted EBITDA $15.4M (36% margin), non-GAAP net income $15.5M ($0.33 diluted) .
Cost actions and operating discipline: Q4 non-GAAP OpEx fell $5M sequentially (Q3: $27.1M → Q4: $22.1M) aided by bonus/vacation accrual reduction ($2.2M), outside accounting reduction ($1.4M), $0.6M allowance reversal, and lower marketing/travel ($0.5M) .
Strengthening fraud platform and MiVIP: CFD ACV grew ~60% to >$10M and MiVIP transactions more than doubled at several Tier 1 accounts; new Digital Fraud Defender launched to combat deepfakes, injection and template attacks .
- “Mitek is becoming a comprehensive solution for fighting fraud and mitigating identity-related cybersecurity risks including deepfake and GenAI fraud” — CEO Ed West .

What Went Wrong

Identity pricing pressure and legacy sunset: Mobile Verify document verification faced pricing pressure; sunsetting of ICAR hardware (-$1.2M FY impact) was a headwind; identity revenue grew <1% YoY in FY2024 .
Revenue timing volatility in Deposits: Some larger customers bought a second tranche in 2H FY2024, expected to normalize to single buys in FY2025; GAAP revenue recognition timing can create headwinds despite stable contract economics .
FY2025 margin dilution from CFD investment: Management expects mid-single-digit EBITDA margin impact from incremental CFD investments near term (viewed as attractive ROI) .

Financial Results

Consolidated Performance vs Prior Quarters

Metric	Q2 2024	Q3 2024	Q4 2024
Revenue ($M)	$46.968	$44.976	$43.222
GAAP Operating Margin	1%	2%	18%
GAAP Diluted EPS	$0.01	$0.00	$0.18
Non-GAAP Operating Income ($M)	$12.814	$11.574	$15.044
Non-GAAP Operating Margin	27%	26%	35%
Adjusted EBITDA ($M)	N/A	N/A	$15.419
Cash & Investments ($M, period-end)	$130.3 (Mar 31)	$133.2 (Jun 30)	$141.8 (Sep 30)

Segment and Revenue Type Breakdown

Revenue ($M)	Q2 2024	Q3 2024	Q4 2024
Deposits Software & Hardware	$22.494	$21.793	$15.773
Deposits Services	$7.010	$7.493	$7.911
Identity Software & Hardware	$2.395	$0.869	$2.568
Identity Services	$15.069	$14.821	$16.970
Total Deposits Revenue	$29.504	$29.286	$23.684
Total Identity Revenue	$17.464	$15.690	$19.538
Total Revenue	$46.968	$44.976	$43.222

KPIs and Notable Items

KPI	Value
FY2024 Free Cash Flow ($M)	$30.250
FY2024 SaaS Mix (% of revenue)	~37%
Q4 Share Repurchases	1.4M shares; $14.2M @ $9.94 avg
FY2024 Share Repurchases	2.2M shares; $24.2M @ $10.78 avg
CFD ACV (FY2024 end)	>$10M; ~60% YoY growth

Note: GAAP and non-GAAP reconciliations, gross margin details and stock-based comp are provided in the 8-K exhibits .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	FY2025	N/A	$170–$180M	Introduced
Adjusted EBITDA Margin	FY2025	N/A	24%–28%	Introduced
Guidance Metric Focus	FY2025	Non-GAAP Op. Income (historical emphasis)	Adjusted EBITDA margin (new emphasis)	Methodology shift
Revenue	FY2024 (as of Q2)	$180–$185M	Revised in Q3 to $169–$173M	Lowered
Non-GAAP Operating Margin	FY2024 (as of Q2)	30–31%	Revised in Q3 to 23–25%	Lowered

Additional phasing: FY2025 top line expected similar to FY2024 in 1H with heavier concentration in Q2, and 2H seasonality similar to FY2024 .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 & Q3)	Current Period (Q4)	Trend
AI/Tech & Identity platform	Emphasis on MiVIP, MiPass, ID R&D; identity demand but pricing pressure in Mobile Verify; reiterated innovation focus	“Becoming comprehensive solution” vs deepfake/GenAI fraud; DFD launch; multimodal biometrics; passive liveness; NIST/DHS recognition	Strengthening platform narrative
Identity profitability path	Not quantified earlier; identity challenges noted	Fulcrum for margin accretion at $80–$85M run-rate; >25% direct cost reduction via automation	Clearer milestones
Deposits & check market	Deposits led Q3; check volumes declining single digits; mobile adoption sustains transactions	Deposits expected flattish FY2025; timing-driven term license revenue; pursuit of pricing resiliency via MiVIP	Stable with timing nuances
Check Fraud Defender (CFD)	Growing acceptance; introduced earlier	ACV >$10M, +~60% YoY; plan to more than double in FY2025; consortium network effect; potential GAAP revenue shift to ratable SaaS	Accelerating
Operating discipline & transparency	Reiterated focus; non-GAAP reconciliations; share repurchase program in Q2	Q4 OpEx down $5M QoQ; detailed bridges and supplemental package; guidance methodology shift to EBITDA	Improved disclosure & cost control
Leadership transition	Interim CEO in Q2; search underway	New CEO Ed West appointed Oct 1; focus on organic growth and operational excellence	New leadership in place

Management Commentary

Ed West: “Mitek is becoming a comprehensive solution for fighting fraud and mitigating identity-related cybersecurity risks including deepfake and GenAI fraud... organic growth is our near-term focus and operational discipline for long-term value creation is our North Star.” .
Dave Lyle: “Fiscal Q4 came in $1.1M higher than the midpoint of the revenue guidance range... non-GAAP operating income... surpassed the midpoint... by just under $4M,” driven by accrual adjustments, allowance reversal, higher revenue, and OpEx efficiencies .
Ed West: Identity portfolio profitability fulcrum at $80–$85M run-rate; automation reduced identity direct cost per transaction >25% in 2024, shifting mix away from commoditized document verification .
Dave Lyle: FY2025 guidance to revenue $170–$180M and adjusted EBITDA margin 24–28%; deposits steady, CFD growth offsets mobile deposit timing; careful forecasting for biometrics; revenue phasing heavier in Q2 .

Q&A Highlights

Organic growth priorities and medium-term trajectory: Targeting return to double-digit growth, low-teens CAGR seen as reasonable post-foundation strengthening; leveraging bank relationships and innovation .
CFD economics and reporting: ACV $10M+, ~60% YoY growth; aiming to more than double in FY2025; moving to more ACV reporting; incremental CFD investment mid-single-digit EBITDA margin impact .
Identity profitability timeline: Margin accretive at $80–$85M run-rate; delta of ~$14M from FY2024 identity revenue ($68.5M) to reach fulcrum, likely into FY2026 .
OpEx outlook: FY2025 OpEx modestly above FY2024 at midpoint; Q1 FY2025 OpEx reset to ~$26M with accrual resets; incremental R&D/sales investments thereafter .
Deposits pricing and competitive dynamics: Dominant position with >7,000 U.S. banks; will align pricing to value proposition while continuing integrated application delivery .

Estimates Context

S&P Global consensus estimates for Q4 FY2024 and prior quarters were unavailable due to access limits; therefore, comparison to Wall Street consensus (EPS and revenue) cannot be assessed at this time. Values retrieved from S&P Global were unavailable at time of request.
Company guidance vs internal targets indicates Q4 revenue and non-GAAP operating income exceeded company’s guidance midpoints, but not comparable to Street consensus without data .

Key Takeaways for Investors

Q4 marked a clean execution quarter with strong YoY growth and margin expansion, aided by disciplined OpEx management and one-time accrual adjustments; cash and investments rose to $141.8M despite buybacks .
Strategic pivot to platform-led identity (MiVIP + DFD) and integrated fraud capabilities reduces reliance on commoditized document verification, supporting pricing resiliency and higher revenue per transaction .
CFD is a potential FY2025 growth and narrative driver (ACV scale, consortium network effects), though near-term EBITDA margin will absorb targeted investments; watch for ACV disclosures and SaaS mix shift .
FY2025 guidance embeds conservative biometrics assumptions and deposit timing normalization; revenue phasing suggests heavier Q2, with 2H similar to last year—position portfolios for seasonality and event catalysts .
Identity margin accretion milestone ($80–$85M run-rate) is a key 2026 objective; monitor automation mix, cost-to-serve improvements, and go-to-market optimization progress .
Enhanced transparency (supplemental package, reconciliation detail, metric shift to adjusted EBITDA) should improve investor confidence in reported quality and comparability over time .
Leadership change is a near-term catalyst: CEO Ed West’s operating discipline and network-effect strategy (CFD consortium) echo prior turnaround experience; execution updates (Needham conference participation) may shape sentiment .

MITEK SYSTEMS INC (MITK)·Q4 2024 Earnings Summary