MITEK SYSTEMS INC — Call Transcript 2025

Note: This event is being recorded. I would now like to turn the call over to Todd Kehrli of PondelWilkinson. Please go ahead. Thank you, Operator. Good afternoon and welcome to Mitek's Fiscal 2025 second quarter earnings conference call. With me on today's call are Mitek's CEO, Ed West, and CFO, Dave Lyle. Before I turn the call over to Ed, I'd like to cover a few quick items. Today, Mitek issued a press release announcing its financial results for its Fiscal 2025 second quarter ended March 31, 2025. That release is available on the company's website at miteksystems.com. This call is being broadcast live over the internet for all interested parties, and the webcast will be archived on the investor relations page of the company's website. I want to remind everyone that on today's call, management will discuss certain factors likely to influence the business going forward. Any factors discussed today that are not historical facts, particularly comments regarding our long-term prospects and market opportunities, should be considered forward-looking statements. These forward-looking statements may include comments about the company's plans and expectations for future performance. Forward-looking statements are subject to a number of risks and uncertainties, which could cause actual results to differ materially. We encourage all our listeners to review our SEC filings, including our most recent 10-Ks and 10-Qs, for a complete description of these risks. Our statements on this call are made as of today, May 8th, 2025, and the company undertakes no obligation to revise or update publicly any forward-looking statements contained herein whether as a result of new information, future events, changes in expectations, or otherwise. Additionally, throughout this call, we'll be discussing certain non-GAAP financial measures. Today's earnings release and the related current report on Form 8-K describe the differences between our GAAP and non-GAAP reporting and present the reconciliation between the two for the periods reported in the release. With that said, I'll now turn the call over to Mitek's CEO, Ed West. Thank you, Todd, and good afternoon, everyone. I would like to begin with a brief overview of Mitek: who we are, the problems we solve, and why our role is more critical than ever in today's digital world. Mitek is a global leader in identity verification and fraud prevention, trusted by over 7,000 organizations worldwide, including top banks, fintechs, telecoms, and marketplaces. We earned that trust by pioneering mobile check deposit, a technology that now enables about 1.2 billion mobile deposit transactions each year. That same technology was built to securely capture and process sensitive data using any camera-enabled device. It is what paved the way for our leadership in digital identity. Today, our capabilities have expanded to include payment fraud detection, powered by an industry-leading consortium of financial institutions, as well as identity verification and authentication, advanced biometrics, and detection of deepfakes and synthetic fraud. In high-assurance industries where precision, integrity, and regulatory compliance are essential, we help our customers stay ahead of evolving threats before they cause harm. The rise of generative AI is fundamentally reshaping the threat landscape, giving fraudsters access to powerful, low-cost tools that can mimic identities, forge documents, and bypass traditional defenses. It's never been easier or cheaper for bad actors to launch attacks. Fraud has essentially been democratized. That's why Mitek's mission to provide secure, real-time identity and fraud prevention is more relevant and more necessary than ever. As I noted earlier this year, our priorities this year have been to drive organic growth, increase the percentage of SaaS revenue, expand margins, and increase free cash flow conversion. With that context, here are four key takeaways from the second quarter, each aligned with the transformation framework we outlined on prior calls. First, we made tangible progress strengthening the foundation for scalable, profitable, organic growth by improving sales execution, our technology platform, and operational efficiency. Second, our identity portfolio continues to build momentum, reaching over $71 million in the last 12 months' revenue, driven by strong transaction growth. Third, Check Fraud Defender continues to expand rapidly. We now have data sets on 23% of U.S. checking accounts, up meaningfully from the last quarter. Fourth, we are enforcing financial discipline, lowering spend intensity while delivering meaningful EBITDA leverage and improving free cash flow, all under the umbrella of strict oversight of capital allocation. Now, let me discuss each of these, starting with our efforts to strengthen the foundation of our company. In the second quarter, we made meaningful progress in identity sales execution, notably without adding headcount. We have restructured compensation plans to focus on driving high-quality, recurring revenue, aligning frontline incentives with our strategic goals. This shift is already paying off, with growth driven by new customer wins, expansion with existing accounts, and increased adoption of newer identity and fraud-related products, all supported by tighter ideal customer profile alignment and a more focused go-to-market approach. On the R&D front, we are leveraging our AI and machine learning resources to help manage the business better. We launched a fully modernized document onboarding system, reducing document onboarding cycle times. When a government agency introduces a new document, such as a redesigned driver's license, our systems initially flag it as unclassified because it's unfamiliar. This triggers manual reviews, increasing operational burden and slowing the user experience. With the recent system upgrades, we've improved new document cycle times, reducing reliance on manual intervention and enabling faster, more scalable support for global document libraries. This rollout began in the U.S. and will soon expand to Europe and the U.K., improving automation rates and strengthening our product scalability in high-assurance markets. These efforts also complement our broader initiative to automate more transactions, enhance scalability, and streamline the customer experience. In addition, we strengthen our leadership team with the appointment of Garrett Davke as COO. A proven operator in identity and fraud prevention, Garrett will focus on scaling automation, product development, and data analytics, all core to our path toward durable, profitable growth. Now, turning to identity, we saw meaningful progress in the two key drivers of profitability: stronger transaction mix and a greater automation, resulting in the need for fewer manual review agents. We're tracking towards our $80-$85 million fulcrum point for identity, with the last 12 months' revenue at $71.4 million exiting the second quarter. As a reminder, improvements in unit economics, especially gross profit per transaction, could lower that break-even threshold over time. MiVIP continued to outpace the rest of the portfolio, further shifting the transaction mix. Over half of identity journeys now include multiple verification steps, such as face match, liveness, SMS, and deepfake detection, versus the single-step journeys typical of Mobile Verify. This richer signal set is driving higher revenue per journey and stronger unit-level profitability. On the automation front, improved AI models reduce manual reviews, driving down per-transaction cost and lifting our services gross margin by 230 basis points over last year, advancing us further along our path to scalable, sustainable profitability in identity. Another key milestone this quarter is the increasing traction with MiPass, our biometric authentication solution, which replaces credentials with biometric login tied to a verified identity, critical for high-assurance sectors. Finally, we began expanding our relationships with existing customers by adding real-time deepfake detections and other synthetic attacks through our Digital Fraud Defender solution. These advanced, signal-rich solutions position Mitek to lead in an increasingly AI-driven fraud landscape. To summarize, identity growth is being driven by two key trends, both directly aligned with our strategy. First, identity journeys are becoming more layered, with customers adding additional verification and authentication steps to strengthen security. This shift reflects the increasing complexity of digital identity and demonstrates that we are successfully executing on our strategy. Second, we believe usage of our platform will continue to expand beyond initial onboarding to include reauthentication throughout the customer lifecycle, such as during wire transfers or high-risk activities, where high-assurance businesses rely on Mitek's advanced capabilities like liveness detection and biometrics and authenticate against a verified identity. Now, turning to the third key takeaway, our Check Fraud Defender solution made good progress in Q2 across both direct and partner channels. ACV grew to nearly $13 million, and we now have data set coverage on approximately 23% of all U.S. checking accounts, up from 18% when we last updated the market. This coverage is a leading indicator of value for the consortium members as well as future growth. It allows us to engage with banks whose checks we already see through consortium operations. On the direct side, we closed two major relationships, including a top 10 and a top 50 U.S. bank. We also advanced our relationship with another top 10 bank currently using our on-premise solution. This institution is now running a full-volume pilot across mobile, branch, ATM, and inquiring channels, highlighting growing interest in our real-time cloud-based consortium model. On the partner side, which helps us serve the broader long-tail regional banks, Abrigo added multiple new clients during this quarter, and another new partner signed 30 new FIs. Our pipeline is solid, and we're in advanced conversations with additional potential partners. While sales cycles in banking remain long and complex, the payoff is high. Our solutions become mission-critical once deployed, generating strong lifetime value and long-term recurring revenue. That brings us to our fourth and final takeaway: continued progress towards a more durable, growing, and cash-generative business model. SaaS revenue grew 15% year-over-year in Q2 and now accounts for 40% of total last 12 months' revenue, up from 39% last quarter, evidence of our steady transition to a more recurring revenue model. We're also driving sharper financial discipline. Non-GAAP cash adjustments were down to a low single-digit percentage point of revenue from 9% a year ago, highlighting stronger execution and cost control. Over the last 12 months, we've generated $47 million in free cash flow on $56 million of adjusted EBITDA and 86% conversion rate. This cash strength gives us flexibility to prudently invest in innovation, strengthen our balance sheet, and return capital to shareholders. Dave will speak more about our capital allocation strategy a little later. Now, before I wrap up, I want to zoom out and speak briefly about the broader opportunity in digital identity and fraud prevention. As we strengthen our position in this market, it's important to reflect on how the landscape is evolving and why Mitek is well-positioned to lead. There are three primary ways to verify or authenticate someone's identity: something you know, such as a password or a PIN; something you have, such as a phone or an ID; or something that you are, such as biometrics and behavioral signals. Yet most of the world, including high-assurance industries, still relies on the first two. While these methods remain important, they are no longer sufficient on their own. In today's AI-driven threat environment, standalone authentication must give way to a layered, signal-rich approach. The gap between the sensitivity of digital transactions and the strength of protections is significant and widening. Mitek's view is that the identity must be verified directly by something you are and continuously, not just at login. That means layering biometrics, behavioral data, and proprietary identity signals to truly know who a user is. Even biometrics alone aren't enough. According to EDIAP Research Institute, the vast majority of systems today cannot detect deepfakes. Our technology is built specifically to mitigate that gap. Fraud today is global, scalable, and alarmingly accessible. What was once limited to skilled criminals is now powered by off-the-shelf toolkits and cheap generative AI, making advanced attacks available to anyone, anywhere, and at a low cost. Across my recent conversations with customers and prospects in North America, the U.K., and Europe, the message has been consistent: that the threat is real, growing, and reshaping enterprise priorities. At Mitek, we're building a unified platform that combines fraud prevention, identity verification, and biometric authentication to help organizations stay secure in an AI-driven world. This platform approach is driving broadening demand, deeper customer engagement, and turning our innovation into durable, profitable growth. With that, I'd like to turn it over to Dave for financial highlights and our outlook. Thanks, Ed. I'll start by walking through our results for the quarter, highlighting the drivers behind our performance. From there, I'll share some additional insights into how we're approaching the balance of the year. First, our fiscal Q2 2025 results. Total revenue reached a record $51.9 million, up 11% year-over-year in the second quarter. As expected, deposit products revenue increased 14% year-over-year, driven by strong Mobile Deposit renewal activity. Our identity products revenue increased by 4% year over year and was highlighted by strong 9% year-over-year growth in identity SaaS revenue and continued strength in our identity transaction volumes. Our non-GAAP gross profit for the quarter was $45.6 million, representing an 88% non-GAAP gross margin, and adjusted EBITDA came in at $20.2 million, representing a 39% margin. Both slightly exceeded our expectations due to the mixed benefits of revenue outperformance and our near 100% gross margin deposit software license business, combined with better-than-expected operating expenses due to the company-wide focus on cost controls. Turning now to the specifics of our revenue performance, let's start with deposit products. Deposits revenue grew 14% year-over-year to $33.7 million, primarily due to a 10% increase in our deposit software license revenue, relating specifically to our Mobile Deposit and Check Intelligence software products. This increase was consistent with expected renewal patterns as customers returned to repurchase Mobile Check Deposit transactions. As we've noted before, due to the lumpiness inherent to term license revenue, which makes up 70% of deposits products revenue, we encourage investors to focus on longer-term trends. To that end, deposit software license revenue for the last 12 months ending fiscal Q2 2025 was $73 million, up from $68 million for the last 12 months ending fiscal Q2 2024, and consistent with the longer-term average of $70 million. This stability reflects our consistent 1.2 billion transaction run rate, which continues to offset broader declines in check usage as mobile adoption grows. In addition to strong performance in license revenue, deposit maintenance revenue grew 10% year-over-year, reflecting a healthy cadence of contract renewals following continued strength in software licensing. While Check Fraud Defender remains in the early stages of monetization, we're encouraged by its growing traction with deposit SaaS revenue rising 64% year-over-year, driven by increased adoption of this solution. Overall, it was a strong quarter for our deposits products, supported by robust license renewals, solid maintenance growth, and accelerated SaaS momentum. Now turning to our identity product portfolio, which grew 4% year-over-year to $18.2 million, driven by a 9% increase in identity SaaS revenue. This growth was supported by continued strong transaction volumes across both MiVIP and Mobile Verify, consistent with trends we've seen in recent quarters. While Q1 benefited from unusually high overage activity at premium pricing tiers, we're pleased to see the underlying strength of the business continuing Q2. We're also seeing an increasingly diversified mix of verification steps attached to each identity transaction on MiVIP, such as face match, liveness, and SMS verifications. While these can carry lower per unit pricing, they boost engagement and volume, reflecting how our platform is being used in more complex workflows. Given the ongoing mixed shift towards lower-priced but higher volume verification steps, we view gross profit dollars as an informative indicator of our underlying unit economics. In Q2, gross profit from our services and other revenue category, which includes identity SaaS, increased nearly 18% year-over-year, more accurately reflecting the expanding contribution and improving efficiency of our identity offerings. Turning to total SaaS revenue, we continue to see strong performance across both our fraud and identity SaaS offerings, with total SaaS revenue growing 15% year-over-year. As Ed noted, we're making solid progress towards our goal of SaaS revenue representing a majority of our business. Last 12 months, or LTM SaaS revenue, now accounts for 40% of total revenue, up from 35% a year ago. Identity SaaS revenue may experience quarterly fluctuations based on customer overage activity as seen in Q1. Moving down the P&L, we maintain strong unit economics, achieving an 88% non-GAAP gross margin for the quarter. This was driven by our near 100% gross margins on our software license revenue, mostly Mobile Deposit, and a notable 75% gross margin on our services and other revenue, mostly Mobile Verify and MiVIP, reflecting continued improvement and up 230 basis points year-over-year. These results reflect the financial benefits of our efforts to increase automation, improve cost efficiencies, and drive cultural integration, particularly within our identity portfolio. Non-GAAP operating expense for the quarter totaled $25.7 million, a $1.7 million sequential increase from fiscal Q1. The increase was primarily driven by higher R&D, as well as continued investment in marketing and cloud-related initiatives. We are particularly pleased with our progress on G&A expenses. Non-GAAP G&A fell $1.8 million year-over-year to 15% of revenue, down from 21% a year ago. This improvement was widespread and reflects our ongoing efforts to build a more scalable and efficient G&A organization while maintaining strong controls and governance. This discipline is also evident in the declining gap between our non-GAAP and GAAP operating expenses, which reflects fewer non-recurring cash items. The $8.3 million difference between our non-GAAP and GAAP operating expenses in Q2 reflects $500,000 in cash adjustments and $7.8 million in non-cash accounting adjustments. This represents a significant improvement from Q2 fiscal year 2024, when cash adjustments totaled $4.4 million. The $3.9 million year-over-year reduction reflects lower non-recurring audit fees, legal costs, executive transition expenses, and restructuring charges. To tie this all together, adjusted EBITDA for Q2 2025 reached a record $20.2 million, reflecting a 52% increase year-over-year and representing a 39% adjusted EBITDA margin. After factoring in other income, interest expenses, and taxes, this equates to $16.7 million in non-GAAP net income, or $0.36 per diluted share based on 46.6 million diluted shares outstanding. Turning to our balance sheet and capital allocation strategy, over the last 12 months, we generated $47.1 million in free cash flow and returned $27.2 million to shareholders through share repurchases. These two factors account for most of the change in our cash and investments balance, which increased by $22.1 million over the past 12 months. Importantly, we ended the quarter in a near net cash position, with $152.4 million in cash and investments against $155.3 million in face value of convertible senior notes due in February 2026. Given the low 75 basis points coupon and the notes conversion feature is deep out of the money, we continue to earn a favorable spread by holding cash and plan to wait as long as practical before redeeming. To support this strategy and strengthen our overall capital allocation position, yesterday, we closed a $100 million senior credit facility with Silicon Valley Bank, a division of First Citizens Bank. This includes a $75 million delayed draw term loan available in tranches through February 2026 to retire our convertible notes and a $25 million revolver for general corporate purposes. Both mature in May 2030 and are structured with favorable terms, extended duration of five years, and ample flexibility to support our long-term growth and capital allocation plans. Our strong financial position supports a disciplined, opportunistic capital allocation strategy, enabling us to balance share repurchases when valuation is compelling with high-return investments and growth, all with a singular focus on maximizing free cash flow per share. Before turning to our outlook, a brief note on the macro environment. While the broader environment remains uncertain, we continue to see resilience in our business. As a software company today, we are largely insulated from trade-related disruptions, and security-related IT spending has historically remained steady even in constrained budget environments. Our global customer base also provides diversification against regional volatility, and we have not seen any cancellations tied to the macro backdrop. That said, given potential for evolving macroeconomic headwinds, we are approaching our fiscal 2025 outlook with appropriate discipline and caution. With regard to revenue, we are maintaining our full-year revenue guidance range of $170-$180 million. Based on the midpoint of our guidance and typical seasonal patterns, we expect Q3 revenue to modestly exceed Q4, reflecting normal customer buying behavior and the expected timing of several term-based license renewals. On the profitability front, we are raising our full-year adjusted EBITDA margin guidance range to 26%-29%, up from our prior range of 25%-28%. This increase reflects our strong first-half performance and the sustained impact of recent efficiency improvements while still preserving flexibility to invest strategically. For fiscal Q3, we expect non-GAAP operating expenses to be in the range of $26-$27 million, with depreciation expense around 70 basis points of revenue. While we continue to manage costs with discipline, we anticipate modest sequential increases in our non-GAAP operating expenses through year-end as we selectively ramp hiring, invest in go-to-market initiatives, and support innovation across our product portfolio. With that, I'll turn the call back over to the operator for questions. We will now begin the question-and-answer session. To ask a question, you may press Star then one on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press Star then two. At this time, we'll pause momentarily to assemble our roster. Our first question will come from Jake Roeberge with William Blair. You may now go ahead. Yeah, thanks for taking the questions and really nice results on both the top and bottom line. Ed, now that you've been at Mitek for a few quarters, can you talk about some things that have gone well thus far and maybe a few things that have been a bit more difficult for you? Obviously, some turbulent times in the market, so we'd love to get your take on what you're seeing from customers. Sounds like things have been largely stable, but it would be great to hear what you saw from some of your more usage or transactional-based businesses as you progressed through the month of April. Sure. Thanks, Jake. I appreciate the word. Frankly, it all goes to the employees across Mitek around the world who just did a terrific job this past quarter and, frankly, since I've been here for the six months. A lot was underway and a lot of execution has occurred, and we couldn't be more pleased with the results and the traction that we were able to see and realize this past quarter. Going to your question about what we're hearing from customers and prospects, frankly, it's one of the things I enjoy doing the most is getting and meeting with customers, prospects, whether it be here in North America, Canada, U.K., Europe, and, frankly, learning about what's working, what's not, the strategy, where we're going, and understanding their needs. Frankly, that's shaping a lot of the feedback, the comments that you heard on my prepared comments about where we're going, what we're seeing, the focus on fraud and identity and pulling that together across our platform. Our priorities are highly aligned to what we've heard in the market, what I've heard, and then just executing against that. One of the things that I've felt most encouraged about coming here is first and foremost the company's heritage and experience, the expertise, the trust earned over decades of working with financial institutions, over 7,000 FIs. Combining that with the technological capabilities, the various software applications, the people, the technical skills that we have, in particular on identity and the biometric side, combining those things together to address the evolution of fraud in the market is what really sets us apart from others. I've heard that loud and clear from customers and prospects, and it's how we're moving our technology. Think of us as around fraud and identity that's coming together from payments to verification to authentication across the platform. On the last part of your question, just to get about how are things progressing, still encouraging. As Dave mentioned, we haven't seen cancellations or something from the macro environment. Frankly, I think with fraud, it's moving in our direction, which is highly encouraging to us. I will say that we're still gaining our sea legs. History, one quarter, we're not going to ring the bell after one quarter, but it's a nice one to have behind us. Things will go up and down over time, but we really like the hand that we've been dealt and look forward to executing against that going forward. Okay, that's helpful. Then just on guidance, you obviously had a strong quarter and good to see the EBITDA raised, but on the maintained top line guide, can you talk about whether there were any kind of pull forwards that helped drive the strength in the quarter or whether that maintained top line guide is really just reflecting some added prudence related to the current macro environment? Yeah, I can take that. Yes, we did see one very large Mobile Deposit customer order earlier than we expected in Q2 rather than in Q3. That was probably the majority of the overachievement versus our expectations. There was another customer that actually ordered on the Mobile Deposit side more than we expected. That's a good thing. We were excited to see that happen too. Okay. If I can just sneak one more in, great to hear you now have data on, I think, 23% of checking accounts. I think the target was to reach $20 million ACV by the end of the year. Could you just talk about how you're progressing toward those targets? Sure. On the first part about that around the data sets on now 23%, and that's up significantly. The volumes that we're seeing going through our platform are ramping pretty substantially. More and more partners, as I mentioned, now both direct and indirect through partners coming in, more and more information. Those are all great leading indicators of what's ahead. We like the progress. Of course, I would say, and going back, Jake, one of your questions from several questions ago about one of the things to see that on the frustrating part, these things take time. The time. I like to tell time by a watch, not by a calendar. We need to, how do we accelerate the cycles and the process to bring some of these to recognize revenue sooner and close them out and get them up and running? We're in it for the long haul, so some of these things take longer. We like the direction. We like where we're headed and feel good about moving forward against our goals. Very helpful. Thanks for taking the questions and congrats on the solid results. Thanks, Jake. Our next question will come from Mike Grondahl with Northland Securities. You may now go ahead. Hey, guys. This is Luke on for Mike. Congrats on the quarter. Just wanted to touch on your earlier comments on the kind of modernized document onboarding system. Wondering if there's any sort of way to quantify just how much quicker this process is with this sort of automation and cycle times. Good afternoon, Luke. Thanks for the acknowledgment. It's, like I said, we've just done it in the U.S., and now we're moving to broaden that out over the U.K. and Europe. It's a meaningful acceleration, in particular, because of when it takes so long, when you're seeing it, our systems are seen as unclassified. We're having to then do a lot of this manually. It's taking longer for customers and the customer experience. The more we can accelerate and rapidly accelerate that, the better. I don't have data for you on exactly the percentage. Over time, we'll see it. I'm going to be premature on exactly what the number would be, but it's potentially meaningful from a cycle time. It goes back to align to what we talked about earlier. It's also another great acknowledgment for our terrific machine learning, AI resources, and R&D that, hey, looking at the business, how do we continue to improve profitability, scalability, automate different functions across the system? This is something the team jumped on and brought to life. We'll keep you apprised. Got it. Thanks for that. Just on SaaS revenue, up 15% year over year, now accounts for 40% of revenue mix. I think that was up from 39% last quarter. I guess just how do you kind of see this mix trending in the years to come, and where do you kind of expect that to normalize at the current business? What we outlined at the earlier part of the year is that our goal was to, going into 2026, as soon as we could, to see the majority of our revenue, so more than half of that coming from SaaS related. Clearly, what's driving this are our fraud platform, focusing on payments with checks, as well as all the identity, all the SaaS side on the identity verification, the biometric layered into the products that are all SaaS. It is really a combination of those that are driving that, and we just aspire to we want all sides of the P&L to go up, but we'd just like to see that SaaS become a majority to add more durability and consistency to our top side. Yeah. The reason we have optimism around it is those are the products that are kind of moving from their nascent stage and starting to really grow. That is where we have the most growth potential, and those are all SaaS products. Okay. Got it. Thanks for the color there, guys. I appreciate you taking the questions. Congrats on the quarter. Thanks, Luke. Bye. Again, if you have a question, please press Star then one. Our next question will come from Derek Greenberg with Maxim Group LLC. You may now go ahead. Hey, guys. Congrats on the quarter. My first question is just on second half seasonality. I know you outlined at the beginning of the year that you expected this to be similar to 2024, where 26% of revenue was in the third quarter and 25% was in the fourth quarter. I heard you talk about how some of that order volume was pulled into the second quarter, and there was also higher anticipated revenue from another customer. I was just wondering how the pacing of this has changed, if at all, going forward. No, typically, the answer is it's not changing much from what we've guided previously. Typically, we see Q1 and Q4 as our lower quarters. That's related to mostly related to Mobile Deposit software license revenue, which fluctuates, and it's just a deal timing issue more than anything else. I said in my remarks that we thought Q3 would be a little higher than Q4, which follows the same pattern that we drew before. Good. Got it. Thanks. That's helpful. Returning to your software as a service revenue goal of more than half of total revenue, is that for calendar 2026 or fiscal 2026? Could you just be more specific there? Yeah. That's a goal of ours. We didn't set necessarily for this year, but something that we do have line of sight, we believe, too. Okay. Got it. I noticed you guys had put out a press release earlier just talking about a submission to an opportunity with the Department of Homeland Security. I was wondering if you could just talk about this a little bit more. Actually, I think what you're referring to is something that we put out where the Department of Homeland Security ran an assessment looking at various liveness applications and biometric. Where we had submitted on that as well as others doing both active and passive liveness and assessing those relative to the market. The great news is our results were terrific. We led the industry in terms of responsiveness with the positives and picking up fraud as well as how fast it was and any potential latency from other systems. We came out ahead. It was done on a blind basis, so you only knew what your own results were. We teamed did a terrific job and really just recognizes our passive liveness capabilities and the need for those. That was a recognition from the market, from the DHS, looking at that, assessing that, and seeing that Mitek Solutions were leading the market. Okay. That makes sense. And then just my final question. In thinking of organic growth and your selling and marketing initiatives, I was wondering how much of growth we should expect to come from new business versus cross-sell and expansion with current clients? I would just say the answer is yes. I mean, it's a focus on organic. We want to continue to add new logos and new relationships like we have been and continue to expand with our existing relationships. We have terrific ones. We're rolling out new products, new solutions that are new to the market and obviously very timely with some of the need and the fraud that we're seeing, particularly around the biometrics, the liveness that we just talked about. Frankly, some of it's been out there, but now it's beginning to see its day is around authentication. That's authenticating back to biometrically back to a verified identity and something that we're fairly unique in and can offer. In my visits with customers and prospects, this is what we've been hearing and very encouraged about our position on that. Our focus as a company, as I outlined two quarters ago and as Dave and I have talked about, we're focused on organic growth and doing whatever's necessary to continue to accelerate that. Obviously, that's going to go up and down quarter to quarter. Some periods look better than others, but we're encouraged about the pace right now. Okay. Great. Thanks for the color. This concludes our question-and-answer session. I'd like to turn the conference back over to Todd Kehrli for any closing remarks. Thank you, operator. Thank you all for joining us today and for your continued support. As always, if you have any follow-up questions, please contact me and we can set up a follow-up call. Thanks and have a great rest of your day. Very good. Thank you. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.

Speaker 4: Note: This event is being recorded. I would now like to turn the call over to Todd Kehrli of PondelWilkinson. Please go ahead. Note: This event is being recorded. note this event is being recorded I would now like to turn the call over to Todd Kehrli of PondelWilkinson. i would now like to turn the call over to todd kehrli of pondelwilkinson Please go ahead. please go ahead

Speaker 3: Thank you, Operator. Good afternoon and welcome to Mitek's Fiscal 2025 second quarter earnings conference call. With me on today's call are Mitek's CEO, Ed West, and CFO, Dave Lyle. Before I turn the call over to Ed, I'd like to cover a few quick items. Today, Mitek issued a press release announcing its financial results for its Fiscal 2025 second quarter ended March 31, 2025. That release is available on the company's website at miteksystems.com. This call is being broadcast live over the internet for all interested parties, and the webcast will be archived on the investor relations page of the company's website. I want to remind everyone that on today's call, management will discuss certain factors likely to influence the business going forward. Any factors discussed today that are not historical facts, particularly comments regarding our long-term prospects and market opportunities, should be considered forward-looking statements. Thank you, Operator. thank you operator Good afternoon and welcome to Mitek's Fiscal 2025 second quarter earnings conference call. good afternoon and welcome to mitek's fiscal 2025 second quarter earnings conference call With me on today's call are Mitek's CEO, Ed West, and CFO, Dave Lyle. with me on today's call are mitek's ceo ed west and cfo dave lyle Before I turn the call over to Ed, I'd like to cover a few quick items. before i turn the call over to ed i'd like to cover a few quick items Today, Mitek issued a press release announcing its financial results for its Fiscal 2025 second quarter ended March 31, 2025. today mitek issued a press release announcing its financial results for its fiscal 2025 second quarter ended march 31 2025 That release is available on the company's website at miteksystems.com. that release is available on the company's website at miteksystems.com This call is being broadcast live over the internet for all interested parties, and the webcast will be archived on the investor relations page of the company's website. this call is being broadcast live over the internet for all interested parties and the webcast will be archived on the investor relations page of the company's website I want to remind everyone that on today's call, management will discuss certain factors likely to influence the business going forward. i want to remind everyone that on today's call management will discuss certain factors likely to influence the business going forward Any factors discussed today that are not historical facts, particularly comments regarding our long-term prospects and market opportunities, should be considered forward-looking statements. any factors discussed today that are not historical facts particularly comments regarding our long-term prospects and market opportunities should be considered forward-looking statements These forward-looking statements may include comments about the company's plans and expectations for future performance. Forward-looking statements are subject to a number of risks and uncertainties, which could cause actual results to differ materially. We encourage all our listeners to review our SEC filings, including our most recent 10-Ks and 10-Qs, for a complete description of these risks. Our statements on this call are made as of today, May 8th, 2025, and the company undertakes no obligation to revise or update publicly any forward-looking statements contained herein whether as a result of new information, future events, changes in expectations, or otherwise. Additionally, throughout this call, we'll be discussing certain non-GAAP financial measures. Today's earnings release and the related current report on Form 8-K describe the differences between our GAAP and non-GAAP reporting and present the reconciliation between the two for the periods reported in the release. These forward-looking statements may include comments about the company's plans and expectations for future performance. these forward-looking statements may include comments about the company's plans and expectations for future performance Forward-looking statements are subject to a number of risks and uncertainties, which could cause actual results to differ materially. forward-looking statements are subject to a number of risks and uncertainties which could cause actual results to differ materially We encourage all our listeners to review our SEC filings, including our most recent 10-Ks and 10-Qs, for a complete description of these risks. we encourage all our listeners to review our sec filings including our most recent 10-ks and 10-qs for a complete description of these risks Our statements on this call are made as of today, May 8th, 2025, and the company undertakes no obligation to revise or update publicly any forward-looking statements contained herein whether as a result of new information, future events, changes in expectations, or otherwise. our statements on this call are made as of today may 8th 2025 and the company undertakes no obligation to revise or update publicly any forward-looking statements contained herein whether as a result of new information future events changes in expectations or otherwise Additionally, throughout this call, we'll be discussing certain non-GAAP financial measures. additionally throughout this call we'll be discussing certain non-gaap financial measures Today's earnings release and the related current report on Form 8-K describe the differences between our GAAP and non-GAAP reporting and present the reconciliation between the two for the periods reported in the release. today's earnings release and the related current report on form 8-k describe the differences between our gaap and non-gaap reporting and present the reconciliation between the two for the periods reported in the release With that said, I'll now turn the call over to Mitek's CEO, Ed West. With that said, I'll now turn the call over to Mitek's CEO, Ed West. with that said i'll now turn the call over to mitek's ceo ed west

Speaker 1: Thank you, Todd, and good afternoon, everyone. I would like to begin with a brief overview of Mitek: who we are, the problems we solve, and why our role is more critical than ever in today's digital world. Mitek is a global leader in identity verification and fraud prevention, trusted by over 7,000 organizations worldwide, including top banks, fintechs, telecoms, and marketplaces. We earned that trust by pioneering mobile check deposit, a technology that now enables about 1.2 billion mobile deposit transactions each year. That same technology was built to securely capture and process sensitive data using any camera-enabled device. It is what paved the way for our leadership in digital identity. Today, our capabilities have expanded to include payment fraud detection, powered by an industry-leading consortium of financial institutions, as well as identity verification and authentication, advanced biometrics, and detection of deepfakes and synthetic fraud. Thank you, Todd, and good afternoon, everyone. thank you todd and good afternoon everyone I would like to begin with a brief overview of Mitek: who we are, the problems we solve, and why our role is more critical than ever in today's digital world. i would like to begin with a brief overview of mitek who we are the problems we solve and why our role is more critical than ever in today's digital world Mitek is a global leader in identity verification and fraud prevention, trusted by over 7,000 organizations worldwide, including top banks, fintechs, telecoms, and marketplaces. mitek is a global leader in identity verification and fraud prevention trusted by over 7,000 organizations worldwide including top banks fintechs telecoms and marketplaces We earned that trust by pioneering mobile check deposit, a technology that now enables about 1.2 billion mobile deposit transactions each year. we earned that trust by pioneering mobile check deposit a technology that now enables about 1.2 billion mobile deposit transactions each year That same technology was built to securely capture and process sensitive data using any camera-enabled device. that same technology was built to securely capture and process sensitive data using any camera-enabled device it is It is what paved the way for our leadership in digital identity. it is what paved the way for our leadership in digital identity Today, our capabilities have expanded to include payment fraud detection, powered by an industry-leading consortium of financial institutions, as well as identity verification and authentication, advanced biometrics, and detection of deepfakes and synthetic fraud. today our capabilities have expanded to include payment fraud detection powered by an industry-leading consortium of financial institutions as well as identity verification and authentication advanced biometrics and detection of deepfakes and synthetic fraud In high-assurance industries where precision, integrity, and regulatory compliance are essential, we help our customers stay ahead of evolving threats before they cause harm. The rise of generative AI is fundamentally reshaping the threat landscape, giving fraudsters access to powerful, low-cost tools that can mimic identities, forge documents, and bypass traditional defenses. It's never been easier or cheaper for bad actors to launch attacks. Fraud has essentially been democratized. That's why Mitek's mission to provide secure, real-time identity and fraud prevention is more relevant and more necessary than ever. As I noted earlier this year, our priorities this year have been to drive organic growth, increase the percentage of SaaS revenue, expand margins, and increase free cash flow conversion. With that context, here are four key takeaways from the second quarter, each aligned with the transformation framework we outlined on prior calls. In high-assurance industries where precision, integrity, and regulatory compliance are essential, we help our customers stay ahead of evolving threats before they cause harm. in high-assurance industries where precision integrity and regulatory compliance are essential we help our customers stay ahead of evolving threats before they cause harm The rise of generative AI is fundamentally reshaping the threat landscape, giving fraudsters access to powerful, low-cost tools that can mimic identities, forge documents, and bypass traditional defenses. the rise of generative ai is fundamentally reshaping the threat landscape giving fraudsters access to powerful low-cost tools that can mimic identities forge documents and bypass traditional defenses It's never been easier or cheaper for bad actors to launch attacks. it's never been easier or cheaper for bad actors to launch attacks Fraud has essentially been democratized. fraud has essentially been democratized That's why Mitek's mission to provide secure, real-time identity and fraud prevention is more relevant and more necessary than ever. that's why mitek's mission to provide secure real-time identity and fraud prevention is more relevant and more necessary than ever As I noted earlier this year, our priorities this year have been to drive organic growth, increase the percentage of SaaS revenue, expand margins, and increase free cash flow conversion. as i noted earlier this year our priorities this year have been to drive organic growth increase the percentage of saas revenue expand margins and increase free cash flow conversion With that context, here are four key takeaways from the second quarter, each aligned with the transformation framework we outlined on prior calls. with that context here are four key takeaways from the second quarter each aligned with the transformation framework we outlined on prior calls First, we made tangible progress strengthening the foundation for scalable, profitable, organic growth by improving sales execution, our technology platform, and operational efficiency. Second, our identity portfolio continues to build momentum, reaching over $71 million in the last 12 months' revenue, driven by strong transaction growth. Third, Check Fraud Defender continues to expand rapidly. We now have data sets on 23% of U.S. checking accounts, up meaningfully from the last quarter. Fourth, we are enforcing financial discipline, lowering spend intensity while delivering meaningful EBITDA leverage and improving free cash flow, all under the umbrella of strict oversight of capital allocation. Now, let me discuss each of these, starting with our efforts to strengthen the foundation of our company. In the second quarter, we made meaningful progress in identity sales execution, notably without adding headcount. First, we made tangible progress strengthening the foundation for scalable, profitable, organic growth by improving sales execution, our technology platform, and operational efficiency. first we made tangible progress strengthening the foundation for scalable profitable organic growth by improving sales execution our technology platform and operational efficiency Second, our identity portfolio continues to build momentum, reaching over $71 million in the last 12 months' revenue, driven by strong transaction growth. second our identity portfolio continues to build momentum reaching over $71 million in the last 12 months' revenue driven by strong transaction growth Third, Check Fraud Defender continues to expand rapidly. third check fraud defender continues to expand rapidly We now have data sets on 23% of U.S. checking accounts, up meaningfully from the last quarter. we now have data sets on 23% of u.s checking accounts up meaningfully from the last quarter Fourth, we are enforcing financial discipline, lowering spend intensity while delivering meaningful EBITDA leverage and improving free cash flow, all under the umbrella of strict oversight of capital allocation. fourth we are enforcing financial discipline lowering spend intensity while delivering meaningful ebitda leverage and improving free cash flow all under the umbrella of strict oversight of capital allocation Now, let me discuss each of these, starting with our efforts to strengthen the foundation of our company. now let me discuss each of these starting with our efforts to strengthen the foundation of our company In the second quarter, we made meaningful progress in identity sales execution, notably without adding headcount. in the second quarter we made meaningful progress in identity sales execution notably without adding headcount We have restructured compensation plans to focus on driving high-quality, recurring revenue, aligning frontline incentives with our strategic goals. This shift is already paying off, with growth driven by new customer wins, expansion with existing accounts, and increased adoption of newer identity and fraud-related products, all supported by tighter ideal customer profile alignment and a more focused go-to-market approach. On the R&D front, we are leveraging our AI and machine learning resources to help manage the business better. We launched a fully modernized document onboarding system, reducing document onboarding cycle times. When a government agency introduces a new document, such as a redesigned driver's license, our systems initially flag it as unclassified because it's unfamiliar. This triggers manual reviews, increasing operational burden and slowing the user experience. We have restructured compensation plans to focus on driving high-quality, recurring revenue, aligning frontline incentives with our strategic goals. we have restructured compensation plans to focus on driving high-quality recurring revenue aligning frontline incentives with our strategic goals This shift is already paying off, with growth driven by new customer wins, expansion with existing accounts, and increased adoption of newer identity and fraud-related products, all supported by tighter ideal customer profile alignment and a more focused go-to-market approach. this shift is already paying off with growth driven by new customer wins expansion with existing accounts and increased adoption of newer identity and fraud-related products all supported by tighter ideal customer profile alignment and a more focused go-to-market approach On the R&D front, we are leveraging our AI and machine learning resources to help manage the business better. on the r&d front we are leveraging our ai and machine learning resources to help manage the business better We launched a fully modernized document onboarding system, reducing document onboarding cycle times. we launched a fully modernized document onboarding system reducing document onboarding cycle times When a government agency introduces a new document, such as a redesigned driver's license, our systems initially flag it as unclassified because it's unfamiliar. when a government agency introduces a new document such as a redesigned driver's license our systems initially flag it as unclassified because it's unfamiliar This triggers manual reviews, increasing operational burden and slowing the user experience. this triggers manual reviews increasing operational burden and slowing the user experience With the recent system upgrades, we've improved new document cycle times, reducing reliance on manual intervention and enabling faster, more scalable support for global document libraries. This rollout began in the U.S. and will soon expand to Europe and the U.K., improving automation rates and strengthening our product scalability in high-assurance markets. These efforts also complement our broader initiative to automate more transactions, enhance scalability, and streamline the customer experience. In addition, we strengthen our leadership team with the appointment of Garrett Davke as COO. A proven operator in identity and fraud prevention, Garrett will focus on scaling automation, product development, and data analytics, all core to our path toward durable, profitable growth. Now, turning to identity, we saw meaningful progress in the two key drivers of profitability: stronger transaction mix and a greater automation, resulting in the need for fewer manual review agents. With the recent system upgrades, we've improved new document cycle times, reducing reliance on manual intervention and enabling faster, more scalable support for global document libraries. with the recent system upgrades we've improved new document cycle times reducing reliance on manual intervention and enabling faster more scalable support for global document libraries This rollout began in the U.S. and will soon expand to Europe and the U.K., improving automation rates and strengthening our product scalability in high-assurance markets. this rollout began in the u.s and will soon expand to europe and the u.k improving automation rates and strengthening our product scalability in high-assurance markets These efforts also complement our broader initiative to automate more transactions, enhance scalability, and streamline the customer experience. these efforts also complement our broader initiative to automate more transactions enhance scalability and streamline the customer experience In addition, we strengthen our leadership team with the appointment of Garrett Davke as COO. in addition we strengthen our leadership team with the appointment of garrett davke as coo A proven operator in identity and fraud prevention, Garrett will focus on scaling automation, product development, and data analytics, all core to our path toward durable, profitable growth. a proven operator in identity and fraud prevention garrett will focus on scaling automation product development and data analytics all core to our path toward durable profitable growth Now, turning to identity, we saw meaningful progress in the two key drivers of profitability: stronger transaction mix and a greater automation, resulting in the need for fewer manual review agents. now turning to identity we saw meaningful progress in the two key drivers of profitability stronger transaction mix and a greater automation resulting in the need for fewer manual review agents We're tracking towards our $80-$85 million fulcrum point for identity, with the last 12 months' revenue at $71.4 million exiting the second quarter. As a reminder, improvements in unit economics, especially gross profit per transaction, could lower that break-even threshold over time. MiVIP continued to outpace the rest of the portfolio, further shifting the transaction mix. Over half of identity journeys now include multiple verification steps, such as face match, liveness, SMS, and deepfake detection, versus the single-step journeys typical of Mobile Verify. This richer signal set is driving higher revenue per journey and stronger unit-level profitability. On the automation front, improved AI models reduce manual reviews, driving down per-transaction cost and lifting our services gross margin by 230 basis points over last year, advancing us further along our path to scalable, sustainable profitability in identity. We're tracking towards our $80-$85 million fulcrum point for identity, with the last 12 months' revenue at $71.4 million exiting the second quarter. we're tracking towards our $80-$85 million fulcrum point for identity with the last 12 months' revenue at $71.4 million exiting the second quarter As a reminder, improvements in unit economics, especially gross profit per transaction, could lower that break-even threshold over time. as a reminder improvements in unit economics especially gross profit per transaction could lower that break-even threshold over time MiVIP continued to outpace the rest of the portfolio, further shifting the transaction mix. mivip continued to outpace the rest of the portfolio further shifting the transaction mix Over half of identity journeys now include multiple verification steps, such as face match, liveness, SMS, and deepfake detection, versus the single-step journeys typical of Mobile Verify. over half of identity journeys now include multiple verification steps such as face match liveness sms and deepfake detection versus the single-step journeys typical of mobile verify This richer signal set is driving higher revenue per journey and stronger unit-level profitability. this richer signal set is driving higher revenue per journey and stronger unit-level profitability On the automation front, improved AI models reduce manual reviews, driving down per-transaction cost and lifting our services gross margin by 230 basis points over last year, advancing us further along our path to scalable, sustainable profitability in identity. on the automation front improved ai models reduce manual reviews driving down per-transaction cost and lifting our services gross margin by 230 basis points over last year advancing us further along our path to scalable sustainable profitability in identity Another key milestone this quarter is the increasing traction with MiPass, our biometric authentication solution, which replaces credentials with biometric login tied to a verified identity, critical for high-assurance sectors. Finally, we began expanding our relationships with existing customers by adding real-time deepfake detections and other synthetic attacks through our Digital Fraud Defender solution. These advanced, signal-rich solutions position Mitek to lead in an increasingly AI-driven fraud landscape. To summarize, identity growth is being driven by two key trends, both directly aligned with our strategy. First, identity journeys are becoming more layered, with customers adding additional verification and authentication steps to strengthen security. This shift reflects the increasing complexity of digital identity and demonstrates that we are successfully executing on our strategy. Another key milestone this quarter is the increasing traction with MiPass, our biometric authentication solution, which replaces credentials with biometric login tied to a verified identity, critical for high-assurance sectors. another key milestone this quarter is the increasing traction with mipass our biometric authentication solution which replaces credentials with biometric login tied to a verified identity critical for high-assurance sectors Finally, we began expanding our relationships with existing customers by adding real-time deepfake detections and other synthetic attacks through our Digital Fraud Defender solution. finally we began expanding our relationships with existing customers by adding real-time deepfake detections and other synthetic attacks through our digital fraud defender solution These advanced, signal-rich solutions position Mitek to lead in an increasingly AI-driven fraud landscape. these advanced signal-rich solutions position mitek to lead in an increasingly ai-driven fraud landscape To summarize, identity growth is being driven by two key trends, both directly aligned with our strategy. to summarize identity growth is being driven by two key trends both directly aligned with our strategy First, identity journeys are becoming more layered, with customers adding additional verification and authentication steps to strengthen security. first identity journeys are becoming more layered with customers adding additional verification and authentication steps to strengthen security This shift reflects the increasing complexity of digital identity and demonstrates that we are successfully executing on our strategy. this shift reflects the increasing complexity of digital identity and demonstrates that we are successfully executing on our strategy Second, we believe usage of our platform will continue to expand beyond initial onboarding to include reauthentication throughout the customer lifecycle, such as during wire transfers or high-risk activities, where high-assurance businesses rely on Mitek's advanced capabilities like liveness detection and biometrics and authenticate against a verified identity. Now, turning to the third key takeaway, our Check Fraud Defender solution made good progress in Q2 across both direct and partner channels. ACV grew to nearly $13 million, and we now have data set coverage on approximately 23% of all U.S. checking accounts, up from 18% when we last updated the market. This coverage is a leading indicator of value for the consortium members as well as future growth. It allows us to engage with banks whose checks we already see through consortium operations. Second, we believe usage of our platform will continue to expand beyond initial onboarding to include reauthentication throughout the customer lifecycle, such as during wire transfers or high-risk activities, where high-assurance businesses rely on Mitek's advanced capabilities like liveness detection and biometrics and authenticate against a verified identity. second we believe usage of our platform will continue to expand beyond initial onboarding to include reauthentication throughout the customer lifecycle such as during wire transfers or high-risk activities where high-assurance businesses rely on mitek's advanced capabilities like liveness detection and biometrics and authenticate against a verified identity Now, turning to the third key takeaway, our Check Fraud Defender solution made good progress in Q2 across both direct and partner channels. now turning to the third key takeaway our check fraud defender solution made good progress in q2 across both direct and partner channels ACV grew to nearly $13 million, and we now have data set coverage on approximately 23% of all U.S. checking accounts, up from 18% when we last updated the market. acv grew to nearly $13 million and we now have data set coverage on approximately 23% of all u.s checking accounts up from 18% when we last updated the market This coverage is a leading indicator of value for the consortium members as well as future growth. this coverage is a leading indicator of value for the consortium members as well as future growth It allows us to engage with banks whose checks we already see through consortium operations. it allows us to engage with banks whose checks we already see through consortium operations On the direct side, we closed two major relationships, including a top 10 and a top 50 U.S. bank. We also advanced our relationship with another top 10 bank currently using our on-premise solution. This institution is now running a full-volume pilot across mobile, branch, ATM, and inquiring channels, highlighting growing interest in our real-time cloud-based consortium model. On the partner side, which helps us serve the broader long-tail regional banks, Abrigo added multiple new clients during this quarter, and another new partner signed 30 new FIs. Our pipeline is solid, and we're in advanced conversations with additional potential partners. While sales cycles in banking remain long and complex, the payoff is high. Our solutions become mission-critical once deployed, generating strong lifetime value and long-term recurring revenue. That brings us to our fourth and final takeaway: continued progress towards a more durable, growing, and cash-generative business model. On the direct side, we closed two major relationships, including a top 10 and a top 50 U.S. bank. on the direct side we closed two major relationships including a top 10 and a top 50 u.s bank We also advanced our relationship with another top 10 bank currently using our on-premise solution. we also advanced our relationship with another top 10 bank currently using our on-premise solution This institution is now running a full-volume pilot across mobile, branch, ATM, and inquiring channels, highlighting growing interest in our real-time cloud-based consortium model. this institution is now running a full-volume pilot across mobile branch atm and inquiring channels highlighting growing interest in our real-time cloud-based consortium model On the partner side, which helps us serve the broader long-tail regional banks, Abrigo added multiple new clients during this quarter, and another new partner signed 30 new FIs. on the partner side which helps us serve the broader long-tail regional banks abrigo added multiple new clients during this quarter and another new partner signed 30 new fis Our pipeline is solid, and we're in advanced conversations with additional potential partners. our pipeline is solid and we're in advanced conversations with additional potential partners While sales cycles in banking remain long and complex, the payoff is high. while sales cycles in banking remain long and complex the payoff is high Our solutions become mission-critical once deployed, generating strong lifetime value and long-term recurring revenue. our solutions become mission-critical once deployed generating strong lifetime value and long-term recurring revenue That brings us to our fourth and final takeaway: continued progress towards a more durable, growing, and cash-generative business model. that brings us to our fourth and final takeaway continued progress towards a more durable growing and cash-generative business model SaaS revenue grew 15% year-over-year in Q2 and now accounts for 40% of total last 12 months' revenue, up from 39% last quarter, evidence of our steady transition to a more recurring revenue model. We're also driving sharper financial discipline. Non-GAAP cash adjustments were down to a low single-digit percentage point of revenue from 9% a year ago, highlighting stronger execution and cost control. Over the last 12 months, we've generated $47 million in free cash flow on $56 million of adjusted EBITDA and 86% conversion rate. This cash strength gives us flexibility to prudently invest in innovation, strengthen our balance sheet, and return capital to shareholders. Dave will speak more about our capital allocation strategy a little later. Now, before I wrap up, I want to zoom out and speak briefly about the broader opportunity in digital identity and fraud prevention. SaaS revenue grew 15% year- over- year in Q2 and now accounts for 40% of total last 12 months' revenue, up from 39% last quarter, evidence of our steady transition to a more recurring revenue model. saas revenue grew 15% year- over- year in q2 and now accounts for 40% of total last 12 months' revenue up from 39% last quarter evidence of our steady transition to a more recurring revenue model We're also driving sharper financial discipline. we're also driving sharper financial discipline Non-GAAP cash adjustments were down to a low single-digit percentage point of revenue from 9% a year ago, highlighting stronger execution and cost control. non-gaap cash adjustments were down to a low single-digit percentage point of revenue from 9% a year ago highlighting stronger execution and cost control Over the last 12 months, we've generated $47 million in free cash flow on $56 million of adjusted EBITDA and 86% conversion rate. over the last 12 months we've generated $47 million in free cash flow on $56 million of adjusted ebitda and 86% conversion rate This cash strength gives us flexibility to prudently invest in innovation, strengthen our balance sheet, and return capital to shareholders. this cash strength gives us flexibility to prudently invest in innovation strengthen our balance sheet and return capital to shareholders Dave will speak more about our capital allocation strategy a little later. dave will speak more about our capital allocation strategy a little later Now, before I wrap up, I want to zoom out and speak briefly about the broader opportunity in digital identity and fraud prevention. now before i wrap up i want to zoom out and speak briefly about the broader opportunity in digital identity and fraud prevention As we strengthen our position in this market, it's important to reflect on how the landscape is evolving and why Mitek is well-positioned to lead. There are three primary ways to verify or authenticate someone's identity: something you know, such as a password or a PIN; something you have, such as a phone or an ID; or something that you are, such as biometrics and behavioral signals. Yet most of the world, including high-assurance industries, still relies on the first two. While these methods remain important, they are no longer sufficient on their own. In today's AI-driven threat environment, standalone authentication must give way to a layered, signal-rich approach. The gap between the sensitivity of digital transactions and the strength of protections is significant and widening. Mitek's view is that the identity must be verified directly by something you are and continuously, not just at login. As we strengthen our position in this market, it's important to reflect on how the landscape is evolving and why Mitek is well-positioned to lead. as we strengthen our position in this market it's important to reflect on how the landscape is evolving and why mitek is well-positioned to lead There are three primary ways to verify or authenticate someone's identity: something you know, such as a password or a PIN; something you have, such as a phone or an ID; or something that you are, such as biometrics and behavioral signals. there are three primary ways to verify or authenticate someone's identity something you know such as a password or a pin something you have such as a phone or an id or something that you are such as biometrics and behavioral signals Yet most of the world, including high-assurance industries, still relies on the first two. yet most of the world including high-assurance industries still relies on the first two While these methods remain important, they are no longer sufficient on their own. while these methods remain important they are no longer sufficient on their own In today's AI-driven threat environment, standalone authentication must give way to a layered, signal-rich approach. in today's ai-driven threat environment standalone authentication must give way to a layered signal-rich approach The gap between the sensitivity of digital transactions and the strength of protections is significant and widening. the gap between the sensitivity of digital transactions and the strength of protections is significant and widening Mitek's view is that the identity must be verified directly by something you are and continuously, not just at login. mitek's view is that the identity must be verified directly by something you are and continuously not just at login That means layering biometrics, behavioral data, and proprietary identity signals to truly know who a user is. Even biometrics alone aren't enough. According to EDIAP Research Institute, the vast majority of systems today cannot detect deepfakes. Our technology is built specifically to mitigate that gap. Fraud today is global, scalable, and alarmingly accessible. What was once limited to skilled criminals is now powered by off-the-shelf toolkits and cheap generative AI, making advanced attacks available to anyone, anywhere, and at a low cost. Across my recent conversations with customers and prospects in North America, the U.K., and Europe, the message has been consistent: that the threat is real, growing, and reshaping enterprise priorities. At Mitek, we're building a unified platform that combines fraud prevention, identity verification, and biometric authentication to help organizations stay secure in an AI-driven world. That means layering biometrics, behavioral data, and proprietary identity signals to truly know who a user is. that means layering biometrics behavioral data and proprietary identity signals to truly know who a user is Even biometrics alone aren't enough. even biometrics alone aren't enough According to EDIAP Research Institute, the vast majority of systems today cannot detect deepfakes. according to ediap research institute the vast majority of systems today cannot detect deepfakes Our technology is built specifically to mitigate that gap. our technology is built specifically to mitigate that gap Fraud today is global, scalable, and alarmingly accessible. fraud today is global scalable and alarmingly accessible What was once limited to skilled criminals is now powered by off-the-shelf toolkits and cheap generative AI, making advanced attacks available to anyone, anywhere, and at a low cost. what was once limited to skilled criminals is now powered by off-the-shelf toolkits and cheap generative ai making advanced attacks available to anyone anywhere and at a low cost Across my recent conversations with customers and prospects in North America, the U.K., and Europe, the message has been consistent: that the threat is real, growing, and reshaping enterprise priorities. across my recent conversations with customers and prospects in north america the u.k and europe the message has been consistent that the threat is real growing and reshaping enterprise priorities At Mitek, we're building a unified platform that combines fraud prevention, identity verification, and biometric authentication to help organizations stay secure in an AI-driven world. at mitek we're building a unified platform that combines fraud prevention identity verification and biometric authentication to help organizations stay secure in an ai-driven world This platform approach is driving broadening demand, deeper customer engagement, and turning our innovation into durable, profitable growth. With that, I'd like to turn it over to Dave for financial highlights and our outlook. This platform approach is driving broadening demand, deeper customer engagement, and turning our innovation into durable, profitable growth. this platform approach is driving broadening demand deeper customer engagement and turning our innovation into durable profitable growth With that, I'd like to turn it over to Dave for financial highlights and our outlook. with that i'd like to turn it over to dave for financial highlights and our outlook

Speaker 2: Thanks, Ed. I'll start by walking through our results for the quarter, highlighting the drivers behind our performance. From there, I'll share some additional insights into how we're approaching the balance of the year. First, our fiscal Q2 2025 results. Total revenue reached a record $51.9 million, up 11% year-over-year in the second quarter. As expected, deposit products revenue increased 14% year-over-year, driven by strong Mobile Deposit renewal activity. Our identity products revenue increased by 4% year over year and was highlighted by strong 9% year-over-year growth in identity SaaS revenue and continued strength in our identity transaction volumes. Thanks, Ed. thanks ed I'll start by walking through our results for the quarter, highlighting the drivers behind our performance. i'll start by walking through our results for the quarter highlighting the drivers behind our performance From there, I'll share some additional insights into how we're approaching the balance of the year. from there i'll share some additional insights into how we're approaching the balance of the year First, our fiscal Q2 2025 results. first our fiscal q2 2025 results Total revenue reached a record $51.9 million, up 11% year- over- year in the second quarter. total revenue reached a record $51.9 million up 11% year- over- year in the second quarter As expected, deposit products revenue increased 14% year- over- year, driven by strong Mobile Deposit renewal activity. as expected deposit products revenue increased 14% year- over- year driven by strong mobile deposit renewal activity Our identity products revenue increased by 4% year over year and was highlighted by strong 9% year-over-year growth in identity SaaS revenue and continued strength in our identity transaction volumes. our identity products revenue increased by 4% year over year and was highlighted by strong 9% year-over-year growth in identity saas revenue and continued strength in our identity transaction volumes Our non-GAAP gross profit for the quarter was $45.6 million, representing an 88% non-GAAP gross margin, and adjusted EBITDA came in at $20.2 million, representing a 39% margin. Both slightly exceeded our expectations due to the mixed benefits of revenue outperformance and our near 100% gross margin deposit software license business, combined with better-than-expected operating expenses due to the company-wide focus on cost controls. Turning now to the specifics of our revenue performance, let's start with deposit products. Deposits revenue grew 14% year-over-year to $33.7 million, primarily due to a 10% increase in our deposit software license revenue, relating specifically to our Mobile Deposit and Check Intelligence software products. This increase was consistent with expected renewal patterns as customers returned to repurchase Mobile Check Deposit transactions. Our non-GAAP gross profit for the quarter was $45.6 million, representing an 88% non-GAAP gross margin, and adjusted EBITDA came in at $20.2 million, representing a 39% margin. our non-gaap gross profit for the quarter was $45.6 million representing an 88% non-gaap gross margin and adjusted ebitda came in at $20.2 million representing a 39% margin Both slightly exceeded our expectations due to the mixed benefits of revenue outperformance and our near 100% gross margin deposit software license business, combined with better-than-expected operating expenses due to the company-wide focus on cost controls. both slightly exceeded our expectations due to the mixed benefits of revenue outperformance and our near 100% gross margin deposit software license business combined with better-than-expected operating expenses due to the company-wide focus on cost controls Turning now to the specifics of our revenue performance, let's start with deposit products. turning now to the specifics of our revenue performance let's start with deposit products Deposits revenue grew 14% year- over- year to $33.7 million, primarily due to a 10% increase in our deposit software license revenue, relating specifically to our Mobile Deposit and Check Intelligence software products. deposits revenue grew 14% year- over- year to $33.7 million primarily due to a 10% increase in our deposit software license revenue relating specifically to our mobile deposit and check intelligence software products This increase was consistent with expected renewal patterns as customers returned to repurchase Mobile Check Deposit transactions. this increase was consistent with expected renewal patterns as customers returned to repurchase mobile check deposit transactions As we've noted before, due to the lumpiness inherent to term license revenue, which makes up 70% of deposits products revenue, we encourage investors to focus on longer-term trends. To that end, deposit software license revenue for the last 12 months ending fiscal Q2 2025 was $73 million, up from $68 million for the last 12 months ending fiscal Q2 2024, and consistent with the longer-term average of $70 million. This stability reflects our consistent 1.2 billion transaction run rate, which continues to offset broader declines in check usage as mobile adoption grows. In addition to strong performance in license revenue, deposit maintenance revenue grew 10% year-over-year, reflecting a healthy cadence of contract renewals following continued strength in software licensing. As we've noted before, due to the lumpiness inherent to term license revenue, which makes up 70% of deposits products revenue, we encourage investors to focus on longer-term trends. as we've noted before due to the lumpiness inherent to term license revenue which makes up 70% of deposits products revenue we encourage investors to focus on longer-term trends To that end, deposit software license revenue for the last 12 months ending fiscal Q2 2025 was $73 million, up from $68 million for the last 12 months ending fiscal Q2 2024, and consistent with the longer-term average of $70 million. to that end deposit software license revenue for the last 12 months ending fiscal q2 2025 was $73 million up from $68 million for the last 12 months ending fiscal q2 2024 and consistent with the longer-term average of $70 million This stability reflects our consistent 1.2 billion transaction run rate, which continues to offset broader declines in check usage as mobile adoption grows. this stability reflects our consistent 1.2 billion transaction run rate which continues to offset broader declines in check usage as mobile adoption grows In addition to strong performance in license revenue, deposit maintenance revenue grew 10% year- over- year, reflecting a healthy cadence of contract renewals following continued strength in software licensing. in addition to strong performance in license revenue deposit maintenance revenue grew 10% year- over- year reflecting a healthy cadence of contract renewals following continued strength in software licensing While Check Fraud Defender remains in the early stages of monetization, we're encouraged by its growing traction with deposit SaaS revenue rising 64% year-over-year, driven by increased adoption of this solution. Overall, it was a strong quarter for our deposits products, supported by robust license renewals, solid maintenance growth, and accelerated SaaS momentum. Now turning to our identity product portfolio, which grew 4% year-over-year to $18.2 million, driven by a 9% increase in identity SaaS revenue. This growth was supported by continued strong transaction volumes across both MiVIP and Mobile Verify, consistent with trends we've seen in recent quarters. While Q1 benefited from unusually high overage activity at premium pricing tiers, we're pleased to see the underlying strength of the business continuing Q2. While Check Fraud Defender remains in the early stages of monetization, we're encouraged by its growing traction with deposit SaaS revenue rising 64% year- over -year, driven by increased adoption of this solution. while check fraud defender remains in the early stages of monetization we're encouraged by its growing traction with deposit saas revenue rising 64% year- over -year driven by increased adoption of this solution Overall, it was a strong quarter for our deposits products, supported by robust license renewals, solid maintenance growth, and accelerated SaaS momentum. overall it was a strong quarter for our deposits products supported by robust license renewals solid maintenance growth and accelerated saas momentum Now turning to our identity product portfolio, which grew 4% year- over- year to $18.2 million, driven by a 9% increase in identity SaaS revenue. now turning to our identity product portfolio which grew 4% year- over- year to $18.2 million driven by a 9% increase in identity saas revenue This growth was supported by continued strong transaction volumes across both MiVIP and Mobile Verify, consistent with trends we've seen in recent quarters. this growth was supported by continued strong transaction volumes across both mivip and mobile verify consistent with trends we've seen in recent quarters While Q1 benefited from unusually high overage activity at premium pricing tiers, we're pleased to see the underlying strength of the business continuing Q2. while q1 benefited from unusually high overage activity at premium pricing tiers we're pleased to see the underlying strength of the business continuing q2 We're also seeing an increasingly diversified mix of verification steps attached to each identity transaction on MiVIP, such as face match, liveness, and SMS verifications. While these can carry lower per unit pricing, they boost engagement and volume, reflecting how our platform is being used in more complex workflows. Given the ongoing mixed shift towards lower-priced but higher volume verification steps, we view gross profit dollars as an informative indicator of our underlying unit economics. In Q2, gross profit from our services and other revenue category, which includes identity SaaS, increased nearly 18% year-over-year, more accurately reflecting the expanding contribution and improving efficiency of our identity offerings. Turning to total SaaS revenue, we continue to see strong performance across both our fraud and identity SaaS offerings, with total SaaS revenue growing 15% year-over-year. We're also seeing an increasingly diversified mix of verification steps attached to each identity transaction on MiVIP, such as face match, liveness, and SMS verifications. we're also seeing an increasingly diversified mix of verification steps attached to each identity transaction on mivip such as face match liveness and sms verifications While these can carry lower per unit pricing, they boost engagement and volume, reflecting how our platform is being used in more complex workflows. while these can carry lower per unit pricing they boost engagement and volume reflecting how our platform is being used in more complex workflows Given the ongoing mixed shift towards lower-priced but higher volume verification steps, we view gross profit dollars as an informative indicator of our underlying unit economics. given the ongoing mixed shift towards lower-priced but higher volume verification steps we view gross profit dollars as an informative indicator of our underlying unit economics In Q2, gross profit from our services and other revenue category, which includes identity SaaS, increased nearly 18% year- over- year, more accurately reflecting the expanding contribution and improving efficiency of our identity offerings. in q2 gross profit from our services and other revenue category which includes identity saas increased nearly 18% year- over- year more accurately reflecting the expanding contribution and improving efficiency of our identity offerings Turning to total SaaS revenue, we continue to see strong performance across both our fraud and identity SaaS offerings, with total SaaS revenue growing 15% year- over- year. turning to total saas revenue we continue to see strong performance across both our fraud and identity saas offerings with total saas revenue growing 15% year- over- year As Ed noted, we're making solid progress towards our goal of SaaS revenue representing a majority of our business. Last 12 months, or LTM SaaS revenue, now accounts for 40% of total revenue, up from 35% a year ago. Identity SaaS revenue may experience quarterly fluctuations based on customer overage activity as seen in Q1. Moving down the P&L, we maintain strong unit economics, achieving an 88% non-GAAP gross margin for the quarter. This was driven by our near 100% gross margins on our software license revenue, mostly Mobile Deposit, and a notable 75% gross margin on our services and other revenue, mostly Mobile Verify and MiVIP, reflecting continued improvement and up 230 basis points year-over-year. These results reflect the financial benefits of our efforts to increase automation, improve cost efficiencies, and drive cultural integration, particularly within our identity portfolio. As Ed noted, we're making solid progress towards our goal of SaaS revenue representing a majority of our business. as ed noted we're making solid progress towards our goal of saas revenue representing a majority of our business Last 12 months, or LTM SaaS revenue, now accounts for 40% of total revenue, up from 35% a year ago. last 12 months or ltm saas revenue now accounts for 40% of total revenue up from 35% a year ago Identity SaaS revenue may experience quarterly fluctuations based on customer overage activity as seen in Q1. identity saas revenue may experience quarterly fluctuations based on customer overage activity as seen in q1 Moving down the P&L, we maintain strong unit economics, achieving an 88% non-GAAP gross margin for the quarter. moving down the p&l we maintain strong unit economics achieving an 88% non-gaap gross margin for the quarter This was driven by our near 100% gross margins on our software license revenue, mostly Mobile Deposit, and a notable 75% gross margin on our services and other revenue, mostly Mobile Verify and MiVIP, reflecting continued improvement and up 230 basis points year- over- year. this was driven by our near 100% gross margins on our software license revenue mostly mobile deposit and a notable 75% gross margin on our services and other revenue mostly mobile verify and mivip reflecting continued improvement and up 230 basis points year- over- year These results reflect the financial benefits of our efforts to increase automation, improve cost efficiencies, and drive cultural integration, particularly within our identity portfolio. these results reflect the financial benefits of our efforts to increase automation improve cost efficiencies and drive cultural integration particularly within our identity portfolio Non-GAAP operating expense for the quarter totaled $25.7 million, a $1.7 million sequential increase from fiscal Q1. The increase was primarily driven by higher R&D, as well as continued investment in marketing and cloud-related initiatives. We are particularly pleased with our progress on G&A expenses. Non-GAAP G&A fell $1.8 million year-over-year to 15% of revenue, down from 21% a year ago. This improvement was widespread and reflects our ongoing efforts to build a more scalable and efficient G&A organization while maintaining strong controls and governance. This discipline is also evident in the declining gap between our non-GAAP and GAAP operating expenses, which reflects fewer non-recurring cash items. The $8.3 million difference between our non-GAAP and GAAP operating expenses in Q2 reflects $500,000 in cash adjustments and $7.8 million in non-cash accounting adjustments. Non-GAAP operating expense for the quarter totaled $25.7 million, a $1.7 million sequential increase from fiscal Q1. non-gaap operating expense for the quarter totaled $25.7 million a $1.7 million sequential increase from fiscal q1 The increase was primarily driven by higher R&D, as well as continued investment in marketing and cloud-related initiatives. the increase was primarily driven by higher r&d as well as continued investment in marketing and cloud-related initiatives We are particularly pleased with our progress on G&A expenses. we are particularly pleased with our progress on g&a expenses Non-GAAP G&A fell $1.8 million year- over- year to 15% of revenue, down from 21% a year ago. non-gaap g&a fell $1.8 million year- over- year to 15% of revenue down from 21% a year ago This improvement was widespread and reflects our ongoing efforts to build a more scalable and efficient G&A organization while maintaining strong controls and governance. this improvement was widespread and reflects our ongoing efforts to build a more scalable and efficient g&a organization while maintaining strong controls and governance This discipline is also evident in the declining gap between our non-GAAP and GAAP operating expenses, which reflects fewer non-recurring cash items. this discipline is also evident in the declining gap between our non-gaap and gaap operating expenses which reflects fewer non-recurring cash items The $8.3 million difference between our non-GAAP and GAAP operating expenses in Q2 reflects $500,000 in cash adjustments and $7.8 million in non-cash accounting adjustments. the $8.3 million difference between our non-gaap and gaap operating expenses in q2 reflects $500,000 in cash adjustments and $7.8 million in non-cash accounting adjustments This represents a significant improvement from Q2 fiscal year 2024, when cash adjustments totaled $4.4 million. The $3.9 million year-over-year reduction reflects lower non-recurring audit fees, legal costs, executive transition expenses, and restructuring charges. To tie this all together, adjusted EBITDA for Q2 2025 reached a record $20.2 million, reflecting a 52% increase year-over-year and representing a 39% adjusted EBITDA margin. After factoring in other income, interest expenses, and taxes, this equates to $16.7 million in non-GAAP net income, or $0.36 per diluted share based on 46.6 million diluted shares outstanding. Turning to our balance sheet and capital allocation strategy, over the last 12 months, we generated $47.1 million in free cash flow and returned $27.2 million to shareholders through share repurchases. These two factors account for most of the change in our cash and investments balance, which increased by $22.1 million over the past 12 months. This represents a significant improvement from Q2 fiscal year 2024, when cash adjustments totaled $4.4 million. this represents a significant improvement from q2 fiscal year 2024 when cash adjustments totaled $4.4 million The $3.9 million year-over-year reduction reflects lower non-recurring audit fees, legal costs, executive transition expenses, and restructuring charges. the $3.9 million year-over-year reduction reflects lower non-recurring audit fees legal costs executive transition expenses and restructuring charges To tie this all together, adjusted EBITDA for Q2 2025 reached a record $20.2 million, reflecting a 52% increase year- over- year and representing a 39% adjusted EBITDA margin. to tie this all together adjusted ebitda for q2 2025 reached a record $20.2 million reflecting a 52% increase year- over- year and representing a 39% adjusted ebitda margin After factoring in other income, interest expenses, and taxes, this equates to $16.7 million in non-GAAP net income, or $0.36 per diluted share based on 46.6 million diluted shares outstanding. after factoring in other income interest expenses and taxes this equates to $16.7 million in non-gaap net income or $0.36 per diluted share based on 46.6 million diluted shares outstanding Turning to our balance sheet and capital allocation strategy, over the last 12 months, we generated $47.1 million in free cash flow and returned $27.2 million to shareholders through share repurchases. turning to our balance sheet and capital allocation strategy over the last 12 months we generated $47.1 million in free cash flow and returned $27.2 million to shareholders through share repurchases These two factors account for most of the change in our cash and investments balance, which increased by $22.1 million over the past 12 months. these two factors account for most of the change in our cash and investments balance which increased by $22.1 million over the past 12 months Importantly, we ended the quarter in a near net cash position, with $152.4 million in cash and investments against $155.3 million in face value of convertible senior notes due in February 2026. Given the low 75 basis points coupon and the notes conversion feature is deep out of the money, we continue to earn a favorable spread by holding cash and plan to wait as long as practical before redeeming. To support this strategy and strengthen our overall capital allocation position, yesterday, we closed a $100 million senior credit facility with Silicon Valley Bank, a division of First Citizens Bank. This includes a $75 million delayed draw term loan available in tranches through February 2026 to retire our convertible notes and a $25 million revolver for general corporate purposes. Importantly, we ended the quarter in a near net cash position, with $152.4 million in cash and investments against $155.3 million in face value of convertible senior notes due in February 2026. importantly we ended the quarter in a near net cash position with $152.4 million in cash and investments against $155.3 million in face value of convertible senior notes due in february 2026 Given the low 75 basis points coupon and the notes conversion feature is deep out of the money, we continue to earn a favorable spread by holding cash and plan to wait as long as practical before redeeming. given the low 75 basis points coupon and the notes conversion feature is deep out of the money we continue to earn a favorable spread by holding cash and plan to wait as long as practical before redeeming To support this strategy and strengthen our overall capital allocation position, yesterday, we closed a $100 million senior credit facility with Silicon Valley Bank, a division of First Citizens Bank. to support this strategy and strengthen our overall capital allocation position yesterday we closed a $100 million senior credit facility with silicon valley bank a division of first citizens bank This includes a $75 million delayed draw term loan available in tranches through February 2026 to retire our convertible notes and a $25 million revolver for general corporate purposes. this includes a $75 million delayed draw term loan available in tranches through february 2026 to retire our convertible notes and a $25 million revolver for general corporate purposes Both mature in May 2030 and are structured with favorable terms, extended duration of five years, and ample flexibility to support our long-term growth and capital allocation plans. Our strong financial position supports a disciplined, opportunistic capital allocation strategy, enabling us to balance share repurchases when valuation is compelling with high-return investments and growth, all with a singular focus on maximizing free cash flow per share. Before turning to our outlook, a brief note on the macro environment. While the broader environment remains uncertain, we continue to see resilience in our business. As a software company today, we are largely insulated from trade-related disruptions, and security-related IT spending has historically remained steady even in constrained budget environments. Our global customer base also provides diversification against regional volatility, and we have not seen any cancellations tied to the macro backdrop. Both mature in May 2030 and are structured with favorable terms, extended duration of five years, and ample flexibility to support our long-term growth and capital allocation plans. both mature in may 2030 and are structured with favorable terms extended duration of five years and ample flexibility to support our long-term growth and capital allocation plans Our strong financial position supports a disciplined, opportunistic capital allocation strategy, enabling us to balance share repurchases when valuation is compelling with high-return investments and growth, all with a singular focus on maximizing free cash flow per share. our strong financial position supports a disciplined opportunistic capital allocation strategy enabling us to balance share repurchases when valuation is compelling with high-return investments and growth all with a singular focus on maximizing free cash flow per share Before turning to our outlook, a brief note on the macro environment. before turning to our outlook a brief note on the macro environment While the broader environment remains uncertain, we continue to see resilience in our business. while the broader environment remains uncertain we continue to see resilience in our business As a software company today, we are largely insulated from trade-related disruptions, and security-related IT spending has historically remained steady even in constrained budget environments. as a software company today we are largely insulated from trade-related disruptions and security-related it spending has historically remained steady even in constrained budget environments Our global customer base also provides diversification against regional volatility, and we have not seen any cancellations tied to the macro backdrop. our global customer base also provides diversification against regional volatility and we have not seen any cancellations tied to the macro backdrop That said, given potential for evolving macroeconomic headwinds, we are approaching our fiscal 2025 outlook with appropriate discipline and caution. With regard to revenue, we are maintaining our full-year revenue guidance range of $170-$180 million. Based on the midpoint of our guidance and typical seasonal patterns, we expect Q3 revenue to modestly exceed Q4, reflecting normal customer buying behavior and the expected timing of several term-based license renewals. On the profitability front, we are raising our full-year adjusted EBITDA margin guidance range to 26%-29%, up from our prior range of 25%-28%. This increase reflects our strong first-half performance and the sustained impact of recent efficiency improvements while still preserving flexibility to invest strategically. For fiscal Q3, we expect non-GAAP operating expenses to be in the range of $26-$27 million, with depreciation expense around 70 basis points of revenue. That said, given potential for evolving macroeconomic headwinds, we are approaching our fiscal 2025 outlook with appropriate discipline and caution. that said given potential for evolving macroeconomic headwinds we are approaching our fiscal 2025 outlook with appropriate discipline and caution With regard to revenue, we are maintaining our full-year revenue guidance range of $170-$180 million. with regard to revenue we are maintaining our full-year revenue guidance range of $170-$180 million Based on the midpoint of our guidance and typical seasonal patterns, we expect Q3 revenue to modestly exceed Q4, reflecting normal customer buying behavior and the expected timing of several term-based license renewals. based on the midpoint of our guidance and typical seasonal patterns we expect q3 revenue to modestly exceed q4 reflecting normal customer buying behavior and the expected timing of several term-based license renewals On the profitability front, we are raising our full-year adjusted EBITDA margin guidance range to 26%-29%, up from our prior range of 25%-28%. on the profitability front we are raising our full-year adjusted ebitda margin guidance range to 26%-29% up from our prior range of 25%-28% This increase reflects our strong first-half performance and the sustained impact of recent efficiency improvements while still preserving flexibility to invest strategically. this increase reflects our strong first-half performance and the sustained impact of recent efficiency improvements while still preserving flexibility to invest strategically For fiscal Q3, we expect non-GAAP operating expenses to be in the range of $26-$27 million, with depreciation expense around 70 basis points of revenue. for fiscal q3 we expect non-gaap operating expenses to be in the range of $26-$27 million with depreciation expense around 70 basis points of revenue While we continue to manage costs with discipline, we anticipate modest sequential increases in our non-GAAP operating expenses through year-end as we selectively ramp hiring, invest in go-to-market initiatives, and support innovation across our product portfolio. With that, I'll turn the call back over to the operator for questions. While we continue to manage costs with discipline, we anticipate modest sequential increases in our non-GAAP operating expenses through year-end as we selectively ramp hiring, invest in go-to-market initiatives, and support innovation across our product portfolio. while we continue to manage costs with discipline we anticipate modest sequential increases in our non-gaap operating expenses through year-end as we selectively ramp hiring invest in go-to-market initiatives and support innovation across our product portfolio With that, I'll turn the call back over to the operator for questions. with that i'll turn the call back over to the operator for questions

Speaker 4: We will now begin the question-and-answer session. To ask a question, you may press Star then one on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press Star then two. At this time, we'll pause momentarily to assemble our roster. Our first question will come from Jake Roeberge with William Blair. You may now go ahead. We will now begin the question- and- answer session. we will now begin the question- and- answer session To ask a question, you may press Star then one on your telephone keypad. to ask a question you may press star then one on your telephone keypad If you're using a speakerphone, please pick up your handset before pressing the keys. if you're using a speakerphone please pick up your handset before pressing the keys To withdraw your question, please press Star then two. to withdraw your question please press star then two At this time, we'll pause momentarily to assemble our roster. at this time we'll pause momentarily to assemble our roster Our first question will come from Jake Roeberge with William Blair. our first question will come from jake roeberge with william blair You may now go ahead. you may now go ahead

Speaker 7: Yeah, thanks for taking the questions and really nice results on both the top and bottom line. Ed, now that you've been at Mitek for a few quarters, can you talk about some things that have gone well thus far and maybe a few things that have been a bit more difficult for you? Obviously, some turbulent times in the market, so we'd love to get your take on what you're seeing from customers. Sounds like things have been largely stable, but it would be great to hear what you saw from some of your more usage or transactional-based businesses as you progressed through the month of April. Yeah, thanks for taking the questions and really nice results on both the top and bottom line. yeah thanks for taking the questions and really nice results on both the top and bottom line Ed, now that you've been at Mitek for a few quarters, can you talk about some things that have gone well thus far and maybe a few things that have been a bit more difficult for you? ed now that you've been at mitek for a few quarters can you talk about some things that have gone well thus far and maybe a few things that have been a bit more difficult for you Obviously, some turbulent times in the market, so we'd love to get your take on what you're seeing from customers. obviously some turbulent times in the market so we'd love to get your take on what you're seeing from customers Sounds like things have been largely stable, but it would be great to hear what you saw from some of your more usage or transactional-based businesses as you progressed through the month of April. sounds like things have been largely stable but it would be great to hear what you saw from some of your more usage or transactional-based businesses as you progressed through the month of april

Speaker 1: Sure. Thanks, Jake. I appreciate the word. Frankly, it all goes to the employees across Mitek around the world who just did a terrific job this past quarter and, frankly, since I've been here for the six months. A lot was underway and a lot of execution has occurred, and we couldn't be more pleased with the results and the traction that we were able to see and realize this past quarter. Going to your question about what we're hearing from customers and prospects, frankly, it's one of the things I enjoy doing the most is getting and meeting with customers, prospects, whether it be here in North America, Canada, U.K., Europe, and, frankly, learning about what's working, what's not, the strategy, where we're going, and understanding their needs. Sure. sure Thanks, Jake. thanks jake I appreciate the word. i appreciate the word Frankly, it all goes to the employees across Mitek around the world who just did a terrific job this past quarter and, frankly, since I've been here for the six months. frankly it all goes to the employees across mitek around the world who just did a terrific job this past quarter and frankly since i've been here for the six months A lot was underway and a lot of execution has occurred, and we couldn't be more pleased with the results and the traction that we were able to see and realize this past quarter. a lot was underway and a lot of execution has occurred and we couldn't be more pleased with the results and the traction that we were able to see and realize this past quarter Going to your question about what we're hearing from customers and prospects, frankly, it's one of the things I enjoy doing the most is getting and meeting with customers, prospects, whether it be here in North America, Canada, U.K., Europe, and, frankly, learning about what's working, what's not, the strategy, where we're going, and understanding their needs. going to your question about what we're hearing from customers and prospects frankly it's one of the things i enjoy doing the most is getting and meeting with customers prospects whether it be here in north america canada u.k europe and frankly learning about what's working what's not the strategy where we're going and understanding their needs Frankly, that's shaping a lot of the feedback, the comments that you heard on my prepared comments about where we're going, what we're seeing, the focus on fraud and identity and pulling that together across our platform. Our priorities are highly aligned to what we've heard in the market, what I've heard, and then just executing against that. One of the things that I've felt most encouraged about coming here is first and foremost the company's heritage and experience, the expertise, the trust earned over decades of working with financial institutions, over 7,000 FIs. Combining that with the technological capabilities, the various software applications, the people, the technical skills that we have, in particular on identity and the biometric side, combining those things together to address the evolution of fraud in the market is what really sets us apart from others. Frankly, that's shaping a lot of the feedback, the comments that you heard on my prepared comments about where we're going, what we're seeing, the focus on fraud and identity and pulling that together across our platform. frankly that's shaping a lot of the feedback the comments that you heard on my prepared comments about where we're going what we're seeing the focus on fraud and identity and pulling that together across our platform Our priorities are highly aligned to what we've heard in the market, what I've heard, and then just executing against that. our priorities are highly aligned to what we've heard in the market what i've heard and then just executing against that One of the things that I've felt most encouraged about coming here is first and foremost the company's heritage and experience, the expertise, the trust earned over decades of working with financial institutions, over 7,000 FIs. one of the things that i've felt most encouraged about coming here is first and foremost the company's heritage and experience the expertise the trust earned over decades of working with financial institutions over 7,000 fis Combining that with the technological capabilities, the various software applications, the people, the technical skills that we have, in particular on identity and the biometric side, combining those things together to address the evolution of fraud in the market is what really sets us apart from others. combining that with the technological capabilities the various software applications the people the technical skills that we have in particular on identity and the biometric side combining those things together to address the evolution of fraud in the market is what really sets us apart from others I've heard that loud and clear from customers and prospects, and it's how we're moving our technology. Think of us as around fraud and identity that's coming together from payments to verification to authentication across the platform. On the last part of your question, just to get about how are things progressing, still encouraging. As Dave mentioned, we haven't seen cancellations or something from the macro environment. Frankly, I think with fraud, it's moving in our direction, which is highly encouraging to us. I will say that we're still gaining our sea legs. History, one quarter, we're not going to ring the bell after one quarter, but it's a nice one to have behind us. Things will go up and down over time, but we really like the hand that we've been dealt and look forward to executing against that going forward. I've heard that loud and clear from customers and prospects, and it's how we're moving our technology. i've heard that loud and clear from customers and prospects and it's how we're moving our technology Think of us as around fraud and identity that's coming together from payments to verification to authentication across the platform. think of us as around fraud and identity that's coming together from payments to verification to authentication across the platform On the last part of your question, just to get about how are things progressing, still encouraging. on the last part of your question just to get about how are things progressing still encouraging As Dave mentioned, we haven't seen cancellations or something from the macro environment. as dave mentioned we haven't seen cancellations or something from the macro environment Frankly, I think with fraud, it's moving in our direction, which is highly encouraging to us. frankly i think with fraud it's moving in our direction which is highly encouraging to us I will say that we're still gaining our sea legs. i will say that we're still gaining our sea legs History, one quarter, we're not going to ring the bell after one quarter, but it's a nice one to have behind us. history one quarter we're not going to ring the bell after one quarter but it's a nice one to have behind us Things will go up and down over time, but we really like the hand that we've been dealt and look forward to executing against that going forward. things will go up and down over time but we really like the hand that we've been dealt and look forward to executing against that going forward

Speaker 7: Okay, that's helpful. Then just on guidance, you obviously had a strong quarter and good to see the EBITDA raised, but on the maintained top line guide, can you talk about whether there were any kind of pull forwards that helped drive the strength in the quarter or whether that maintained top line guide is really just reflecting some added prudence related to the current macro environment? Okay, that's helpful. okay that's helpful Then just on guidance, you obviously had a strong quarter and good to see the EBITDA raised, but on the maintained top line guide, can you talk about whether there were any kind of pull forwards that helped drive the strength in the quarter or whether that maintained top line guide is really just reflecting some added prudence related to the current macro environment? then just on guidance you obviously had a strong quarter and good to see the ebitda raised but on the maintained top line guide can you talk about whether there were any kind of pull forwards that helped drive the strength in the quarter or whether that maintained top line guide is really just reflecting some added prudence related to the current macro environment

Speaker 2: Yeah, I can take that. Yes, we did see one very large Mobile Deposit customer order earlier than we expected in Q2 rather than in Q3. That was probably the majority of the overachievement versus our expectations. There was another customer that actually ordered on the Mobile Deposit side more than we expected. That's a good thing. We were excited to see that happen too. Yeah, I can take that. yeah i can take that Yes, we did see one very large Mobile Deposit customer order earlier than we expected in Q2 rather than in Q3. yes we did see one very large mobile deposit customer order earlier than we expected in q2 rather than in q3 That was probably the majority of the overachievement versus our expectations. that was probably the majority of the overachievement versus our expectations There was another customer that actually ordered on the Mobile Deposit side more than we expected. there was another customer that actually ordered on the mobile deposit side more than we expected That's a good thing. that's a good thing We were excited to see that happen too. we were excited to see that happen too

Speaker 7: Okay. If I can just sneak one more in, great to hear you now have data on, I think, 23% of checking accounts. I think the target was to reach $20 million ACV by the end of the year. Could you just talk about how you're progressing toward those targets? Okay. okay If I can just sneak one more in, great to hear you now have data on, I think, 23% of checking accounts. if i can just sneak one more in great to hear you now have data on i think 23% of checking accounts I think the target was to reach $20 million ACV by the end of the year. i think the target was to reach $20 million acv by the end of the year Could you just talk about how you're progressing toward those targets? could you just talk about how you're progressing toward those targets

Speaker 1: Sure. On the first part about that around the data sets on now 23%, and that's up significantly. The volumes that we're seeing going through our platform are ramping pretty substantially. More and more partners, as I mentioned, now both direct and indirect through partners coming in, more and more information. Those are all great leading indicators of what's ahead. We like the progress. Of course, I would say, and going back, Jake, one of your questions from several questions ago about one of the things to see that on the frustrating part, these things take time. The time. I like to tell time by a watch, not by a calendar. We need to, how do we accelerate the cycles and the process to bring some of these to recognize revenue sooner and close them out and get them up and running? Sure. sure On the first part about that around the data sets on now 23%, and that's up significantly. on the first part about that around the data sets on now 23% and that's up significantly The volumes that we're seeing going through our platform are ramping pretty substantially. the volumes that we're seeing going through our platform are ramping pretty substantially More and more partners, as I mentioned, now both direct and indirect through partners coming in, more and more information. more and more partners as i mentioned now both direct and indirect through partners coming in more and more information Those are all great leading indicators of what's ahead. those are all great leading indicators of what's ahead We like the progress. we like the progress Of course, I would say, and going back, Jake, one of your questions from several questions ago about one of the things to see that on the frustrating part, these things take time. of course i would say and going back jake one of your questions from several questions ago about one of the things to see that on the frustrating part these things take time The time. the time I like to tell time by a watch, not by a calendar. i like to tell time by a watch not by a calendar We need to, how do we accelerate the cycles and the process to bring some of these to recognize revenue sooner and close them out and get them up and running? we need to how do we accelerate the cycles and the process to bring some of these to recognize revenue sooner and close them out and get them up and running We're in it for the long haul, so some of these things take longer. We like the direction. We like where we're headed and feel good about moving forward against our goals. We're in it for the long haul, so some of these things take longer. we're in it for the long haul so some of these things take longer We like the direction. we like the direction We like where we're headed and feel good about moving forward against our goals. we like where we're headed and feel good about moving forward against our goals

Speaker 7: Very helpful. Thanks for taking the questions and congrats on the solid results. Very helpful. very helpful Thanks for taking the questions and congrats on the solid results. thanks for taking the questions and congrats on the solid results

Speaker 1: Thanks, Jake. Thanks, Jake. thanks jake

Speaker 4: Our next question will come from Mike Grondahl with Northland Securities. You may now go ahead. Our next question will come from Mike Grondahl with Northland Securities. our next question will come from mike grondahl with northland securities You may now go ahead. you may now go ahead

Speaker 5: Hey, guys. This is Luke on for Mike. Congrats on the quarter. Just wanted to touch on your earlier comments on the kind of modernized document onboarding system. Wondering if there's any sort of way to quantify just how much quicker this process is with this sort of automation and cycle times. Hey, guys. hey guys This is Luke on for Mike. this is luke on for mike Congrats on the quarter. congrats on the quarter Just wanted to touch on your earlier comments on the kind of modernized document onboarding system. just wanted to touch on your earlier comments on the kind of modernized document onboarding system Wondering if there's any sort of way to quantify just how much quicker this process is with this sort of automation and cycle times. wondering if there's any sort of way to quantify just how much quicker this process is with this sort of automation and cycle times

Speaker 1: Good afternoon, Luke. Thanks for the acknowledgment. It's, like I said, we've just done it in the U.S., and now we're moving to broaden that out over the U.K. and Europe. It's a meaningful acceleration, in particular, because of when it takes so long, when you're seeing it, our systems are seen as unclassified. We're having to then do a lot of this manually. It's taking longer for customers and the customer experience. The more we can accelerate and rapidly accelerate that, the better. I don't have data for you on exactly the percentage. Over time, we'll see it. I'm going to be premature on exactly what the number would be, but it's potentially meaningful from a cycle time. It goes back to align to what we talked about earlier. Good afternoon, Luke. good afternoon luke Thanks for the acknowledgment. thanks for the acknowledgment It's, like I said, we've just done it in the U.S., and now we're moving to broaden that out over the U.K. and Europe. it's like i said we've just done it in the u.s and now we're moving to broaden that out over the u.k and europe It's a meaningful acceleration, in particular, because of when it takes so long, when you're seeing it, our systems are seen as unclassified. it's a meaningful acceleration in particular because of when it takes so long when you're seeing it our systems are seen as unclassified We're having to then do a lot of this manually. we're having to then do a lot of this manually It's taking longer for customers and the customer experience. it's taking longer for customers and the customer experience The more we can accelerate and rapidly accelerate that, the better. the more we can accelerate and rapidly accelerate that the better I don't have data for you on exactly the percentage. i don't have data for you on exactly the percentage Over time, we'll see it. over time we'll see it I'm going to be premature on exactly what the number would be, but it's potentially meaningful from a cycle time. i'm going to be premature on exactly what the number would be but it's potentially meaningful from a cycle time It goes back to align to what we talked about earlier. it goes back to align to what we talked about earlier It's also another great acknowledgment for our terrific machine learning, AI resources, and R&D that, hey, looking at the business, how do we continue to improve profitability, scalability, automate different functions across the system? This is something the team jumped on and brought to life. We'll keep you apprised. It's also another great acknowledgment for our terrific machine learning, AI resources, and R&D that, hey, looking at the business, how do we continue to improve profitability, scalability, automate different functions across the system? it's also another great acknowledgment for our terrific machine learning ai resources and r&d that hey looking at the business how do we continue to improve profitability scalability automate different functions across the system This is something the team jumped on and brought to life. this is something the team jumped on and brought to life We'll keep you apprised. we'll keep you apprised

Speaker 5: Got it. Thanks for that. Just on SaaS revenue, up 15% year over year, now accounts for 40% of revenue mix. I think that was up from 39% last quarter. I guess just how do you kind of see this mix trending in the years to come, and where do you kind of expect that to normalize at the current business? Got it. got it Thanks for that. thanks for that Just on SaaS revenue, up 15% year over year, now accounts for 40% of revenue mix. just on saas revenue up 15% year over year now accounts for 40% of revenue mix I think that was up from 39% last quarter. i think that was up from 39% last quarter I guess just how do you kind of see this mix trending in the years to come, and where do you kind of expect that to normalize at the current business? i guess just how do you kind of see this mix trending in the years to come and where do you kind of expect that to normalize at the current business

Speaker 1: What we outlined at the earlier part of the year is that our goal was to, going into 2026, as soon as we could, to see the majority of our revenue, so more than half of that coming from SaaS related. Clearly, what's driving this are our fraud platform, focusing on payments with checks, as well as all the identity, all the SaaS side on the identity verification, the biometric layered into the products that are all SaaS. It is really a combination of those that are driving that, and we just aspire to we want all sides of the P&L to go up, but we'd just like to see that SaaS become a majority to add more durability and consistency to our top side. What we outlined at the earlier part of the year is that our goal was to, going into 2026, as soon as we could, to see the majority of our revenue, so more than half of that coming from SaaS related. what we outlined at the earlier part of the year is that our goal was to going into 2026 as soon as we could to see the majority of our revenue so more than half of that coming from saas related Clearly, what's driving this are our fraud platform, focusing on payments with checks, as well as all the identity, all the SaaS side on the identity verification, the biometric layered into the products that are all SaaS. clearly what's driving this are our fraud platform focusing on payments with checks as well as all the identity all the saas side on the identity verification the biometric layered into the products that are all saas It is really a combination of those that are driving that, and we just aspire to we want all sides of the P&L to go up, but we'd just like to see that SaaS become a majority to add more durability and consistency to our top side. it is really a combination of those that are driving that and we just aspire to we want all sides of the p&l to go up but we'd just like to see that saas become a majority to add more durability and consistency to our top side

Speaker 2: Yeah. The reason we have optimism around it is those are the products that are kind of moving from their nascent stage and starting to really grow. That is where we have the most growth potential, and those are all SaaS products. Yeah. yeah The reason we have optimism around it is those are the products that are kind of moving from their nascent stage and starting to really grow. the reason we have optimism around it is those are the products that are kind of moving from their nascent stage and starting to really grow That is where we have the most growth potential, and those are all SaaS products. that is where we have the most growth potential and those are all saas products

Speaker 5: Okay. Got it. Thanks for the color there, guys. I appreciate you taking the questions. Congrats on the quarter. Okay. okay Got it. got it Thanks for the color there, guys. thanks for the color there guys I appreciate you taking the questions. i appreciate you taking the questions Congrats on the quarter. congrats on the quarter

Speaker 1: Thanks, Luke. Thanks, Luke. thanks luke Bye. Bye. bye

Speaker 3: Again, if you have a question, please press Star then one. Our next question will come from Derek Greenberg with Maxim Group LLC. You may now go ahead. Again, if you have a question, please press Star then one. again if you have a question please press star then one Our next question will come from Derek Greenberg with Maxim Group LLC. our next question will come from derek greenberg with maxim group llc You may now go ahead. you may now go ahead

Speaker 6: Hey, guys. Congrats on the quarter. My first question is just on second half seasonality. I know you outlined at the beginning of the year that you expected this to be similar to 2024, where 26% of revenue was in the third quarter and 25% was in the fourth quarter. I heard you talk about how some of that order volume was pulled into the second quarter, and there was also higher anticipated revenue from another customer. I was just wondering how the pacing of this has changed, if at all, going forward. Hey, guys. hey guys Congrats on the quarter. congrats on the quarter My first question is just on second half seasonality. my first question is just on second half seasonality I know you outlined at the beginning of the year that you expected this to be similar to 2024, where 26% of revenue was in the third quarter and 25% was in the fourth quarter. i know you outlined at the beginning of the year that you expected this to be similar to 2024 where 26% of revenue was in the third quarter and 25% was in the fourth quarter I heard you talk about how some of that order volume was pulled into the second quarter, and there was also higher anticipated revenue from another customer. i heard you talk about how some of that order volume was pulled into the second quarter and there was also higher anticipated revenue from another customer I was just wondering how the pacing of this has changed, if at all, going forward. i was just wondering how the pacing of this has changed if at all going forward

Speaker 2: No, typically, the answer is it's not changing much from what we've guided previously. Typically, we see Q1 and Q4 as our lower quarters. That's related to mostly related to Mobile Deposit software license revenue, which fluctuates, and it's just a deal timing issue more than anything else. I said in my remarks that we thought Q3 would be a little higher than Q4, which follows the same pattern that we drew before. No, typically, the answer is it's not changing much from what we've guided previously. no typically the answer is it's not changing much from what we've guided previously Typically, we see Q1 and Q4 as our lower quarters. typically we see q1 and q4 as our lower quarters That's related to mostly related to Mobile Deposit software license revenue, which fluctuates, and it's just a deal timing issue more than anything else. that's related to mostly related to mobile deposit software license revenue which fluctuates and it's just a deal timing issue more than anything else I said in my remarks that we thought Q3 would be a little higher than Q4, which follows the same pattern that we drew before. i said in my remarks that we thought q3 would be a little higher than q4 which follows the same pattern that we drew before

Speaker 6: Good. Got it. Thanks. That's helpful. Returning to your software as a service revenue goal of more than half of total revenue, is that for calendar 2026 or fiscal 2026? Could you just be more specific there? Good. good Got it. got it Thanks. thanks That's helpful. that's helpful Returning to your software as a service revenue goal of more than half of total revenue, is that for calendar 2026 or fiscal 2026? returning to your software as a service revenue goal of more than half of total revenue is that for calendar 2026 or fiscal 2026 Could you just be more specific there? could you just be more specific there

Speaker 2: Yeah. That's a goal of ours. We didn't set necessarily for this year, but something that we do have line of sight, we believe, too. Yeah. yeah That's a goal of ours. that's a goal of ours We didn't set necessarily for this year, but something that we do have line of sight, we believe, too. we didn't set necessarily for this year but something that we do have line of sight we believe too

Speaker 6: Okay. Got it. I noticed you guys had put out a press release earlier just talking about a submission to an opportunity with the Department of Homeland Security. I was wondering if you could just talk about this a little bit more. Okay. okay Got it. got it I noticed you guys had put out a press release earlier just talking about a submission to an opportunity with the Department of Homeland Security. i noticed you guys had put out a press release earlier just talking about a submission to an opportunity with the department of homeland security I was wondering if you could just talk about this a little bit more. i was wondering if you could just talk about this a little bit more

Speaker 1: Actually, I think what you're referring to is something that we put out where the Department of Homeland Security ran an assessment looking at various liveness applications and biometric. Where we had submitted on that as well as others doing both active and passive liveness and assessing those relative to the market. The great news is our results were terrific. We led the industry in terms of responsiveness with the positives and picking up fraud as well as how fast it was and any potential latency from other systems. We came out ahead. It was done on a blind basis, so you only knew what your own results were. We teamed did a terrific job and really just recognizes our passive liveness capabilities and the need for those. Actually, I think what you're referring to is something that we put out where the Department of Homeland Security ran an assessment looking at various liveness applications and biometric. actually i think what you're referring to is something that we put out where the department of homeland security ran an assessment looking at various liveness applications and biometric Where we had submitted on that as well as others doing both active and passive liveness and assessing those relative to the market. where we had submitted on that as well as others doing both active and passive liveness and assessing those relative to the market The great news is our results were terrific. the great news is our results were terrific We led the industry in terms of responsiveness with the positives and picking up fraud as well as how fast it was and any potential latency from other systems. we led the industry in terms of responsiveness with the positives and picking up fraud as well as how fast it was and any potential latency from other systems We came out ahead. we came out ahead It was done on a blind basis, so you only knew what your own results were. it was done on a blind basis so you only knew what your own results were We teamed did a terrific job and really just recognizes our passive liveness capabilities and the need for those. we teamed did a terrific job and really just recognizes our passive liveness capabilities and the need for those That was a recognition from the market, from the DHS, looking at that, assessing that, and seeing that Mitek Solutions were leading the market. That was a recognition from the market, from the DHS , looking at that, assessing that, and seeing that Mitek Solutions were leading the market. that was a recognition from the market, from the dhs looking at that assessing that and seeing that mitek solutions were leading the market

Speaker 6: Okay. That makes sense. And then just my final question. In thinking of organic growth and your selling and marketing initiatives, I was wondering how much of growth we should expect to come from new business versus cross-sell and expansion with current clients? Okay. okay That makes sense. that makes sense And then just my final question. and then just my final question In thinking of organic growth and your selling and marketing initiatives, I was wondering how much of growth we should expect to come from new business versus cross-sell and expansion with current clients? in thinking of organic growth and your selling and marketing initiatives i was wondering how much of growth we should expect to come from new business versus cross-sell and expansion with current clients

Speaker 1: I would just say the answer is yes. I mean, it's a focus on organic. We want to continue to add new logos and new relationships like we have been and continue to expand with our existing relationships. We have terrific ones. We're rolling out new products, new solutions that are new to the market and obviously very timely with some of the need and the fraud that we're seeing, particularly around the biometrics, the liveness that we just talked about. Frankly, some of it's been out there, but now it's beginning to see its day is around authentication. That's authenticating back to biometrically back to a verified identity and something that we're fairly unique in and can offer. In my visits with customers and prospects, this is what we've been hearing and very encouraged about our position on that. I would just say the answer is yes. i would just say the answer is yes I mean, it's a focus on organic. i mean it's a focus on organic We want to continue to add new logos and new relationships like we have been and continue to expand with our existing relationships. we want to continue to add new logos and new relationships like we have been and continue to expand with our existing relationships We have terrific ones. we have terrific ones We're rolling out new products, new solutions that are new to the market and obviously very timely with some of the need and the fraud that we're seeing, particularly around the biometrics, the liveness that we just talked about. we're rolling out new products new solutions that are new to the market and obviously very timely with some of the need and the fraud that we're seeing particularly around the biometrics the liveness that we just talked about Frankly, some of it's been out there, but now it's beginning to see its day is around authentication. frankly some of it's been out there but now it's beginning to see its day is around authentication That's authenticating back to biometrically back to a verified identity and something that we're fairly unique in and can offer. that's authenticating back to biometrically back to a verified identity and something that we're fairly unique in and can offer In my visits with customers and prospects, this is what we've been hearing and very encouraged about our position on that. in my visits with customers and prospects this is what we've been hearing and very encouraged about our position on that Our focus as a company, as I outlined two quarters ago and as Dave and I have talked about, we're focused on organic growth and doing whatever's necessary to continue to accelerate that. Obviously, that's going to go up and down quarter to quarter. Some periods look better than others, but we're encouraged about the pace right now. Our focus as a company, as I outlined two quarters ago and as Dave and I have talked about, we're focused on organic growth and doing whatever's necessary to continue to accelerate that. our focus as a company as i outlined two quarters ago and as dave and i have talked about we're focused on organic growth and doing whatever's necessary to continue to accelerate that Obviously, that's going to go up and down quarter to quarter. obviously that's going to go up and down quarter to quarter Some periods look better than others, but we're encouraged about the pace right now. some periods look better than others but we're encouraged about the pace right now

Speaker 6: Okay. Great. Thanks for the color. Okay. okay Great. great Thanks for the color. thanks for the color

Speaker 4: This concludes our question-and-answer session. I'd like to turn the conference back over to Todd Kehrli for any closing remarks. This concludes our question- and- answer session. this concludes our question- and- answer session I'd like to turn the conference back over to Todd Kehrli for any closing remarks. i'd like to turn the conference back over to todd kehrli for any closing remarks

Speaker 3: Thank you, operator. Thank you all for joining us today and for your continued support. As always, if you have any follow-up questions, please contact me and we can set up a follow-up call. Thanks and have a great rest of your day. Thank you, operator. thank you operator Thank you all for joining us today and for your continued support. thank you all for joining us today and for your continued support As always, if you have any follow-up questions, please contact me and we can set up a follow-up call. as always if you have any follow-up questions please contact me and we can set up a follow-up call Thanks and have a great rest of your day. thanks and have a great rest of your day

Speaker 1: Very good. Thank you. Very good. very good Thank you. thank you

Speaker 4: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect. The conference is now concluded. the conference is now concluded Thank you for attending today's presentation. thank you for attending today's presentation You may now disconnect. you may now disconnect