Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Sep. 30, 2018 | Dec. 07, 2018 | Mar. 31, 2018 | |
Document And Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Sep. 30, 2018 | ||
Document Fiscal Year Focus | 2,018 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | MITK | ||
Entity Registrant Name | MITEK SYSTEMS INC | ||
Entity Central Index Key | 807,863 | ||
Current Fiscal Year End Date | --09-30 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Common Stock, Shares Outstanding | 38,555,903 | ||
Entity Public Float | $ 252,304,880 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2018 | Sep. 30, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 9,028 | $ 12,289 |
Short-term investments | 8,448 | 30,279 |
Accounts receivable, net | 16,821 | 7,099 |
Prepaid expenses | 2,278 | 911 |
Other current assets | 1,053 | 298 |
Total current assets | 37,628 | 50,876 |
Long-term investments | 0 | 3,780 |
Property and equipment, net | 4,665 | 613 |
Intangible assets, net | 32,947 | 2,297 |
Goodwill | 34,407 | 3,014 |
Deferred income taxes, net | 15,356 | 11,065 |
Other non-current assets | 2,147 | 74 |
Total assets | 127,150 | 71,719 |
Current liabilities: | ||
Accounts payable | 3,573 | 1,918 |
Accrued payroll and related taxes | 7,915 | 3,709 |
Deferred revenue, current portion | 4,792 | 3,305 |
Acquisition-related contingent consideration | 1,849 | 0 |
Other current liabilities | 2,278 | 602 |
Total current liabilities | 20,407 | 9,534 |
Deferred revenue, non-current portion | 485 | 85 |
Deferred income tax liabilities | 8,162 | 0 |
Other non-current liabilities | 2,702 | 692 |
Total liabilities | 31,756 | 10,311 |
Stockholders’ equity | ||
Preferred stock, $0.001 par value, 1,000,000 shares authorized, none issued and outstanding, as of September 30, 2018 and 2017 | 0 | 0 |
Common stock, $0.001 par value, 60,000,000 shares authorized, 37,961,224 and 33,724,392 issued and outstanding, as of September 30, 2018 and 2017, respectively | 38 | 34 |
Additional paid-in capital | 116,944 | 78,677 |
Accumulated other comprehensive income (loss) | (586) | 147 |
Accumulated deficit | (21,002) | (17,450) |
Total stockholders’ equity | 95,394 | 61,408 |
Total liabilities and stockholders’ equity | $ 127,150 | $ 71,719 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2018 | Sep. 30, 2017 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 1,000,000 | 1,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 60,000,000 | 60,000,000 |
Common stock, shares issued (in shares) | 37,961,224 | 33,724,392 |
Common stock, shares outstanding (in shares) | 37,961,224 | 33,724,392 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE INCOME (LOSS) - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Revenue | $ 63,559 | $ 45,390 | $ 34,701 |
Operating costs and expenses | |||
Selling and marketing | 21,700 | 14,484 | 10,937 |
Research and development | 15,673 | 10,430 | 7,794 |
General and administrative | 17,067 | 11,310 | 8,575 |
Acquisition-related costs and expenses | 8,239 | 2,356 | 2,176 |
Total operating costs and expenses | 71,365 | 42,621 | 32,877 |
Operating income (loss) | (7,806) | 2,769 | 1,824 |
Other income (expense), net | (935) | 402 | 134 |
Income (loss) before income taxes | (8,741) | 3,171 | 1,958 |
Income tax benefit (provision) | (3,066) | 10,921 | 1 |
Net income (loss) | $ (11,807) | $ 14,092 | $ 1,959 |
Net income (loss) per share—basic (in dollars per share) | $ (0.33) | $ 0.43 | $ 0.06 |
Net income (loss) per share—diluted (in dollars per share) | $ (0.33) | $ 0.40 | $ 0.06 |
Shares used in calculating net income (loss) per share—basic (in shares) | 35,811 | 33,083 | 31,587 |
Shares used in calculating net income (loss) per share—diluted (in shares) | 35,811 | 35,537 | 33,819 |
Other comprehensive income (loss) | |||
Foreign currency translation adjustment | $ (723) | $ 208 | $ (46) |
Unrealized gain (loss) on investments | (10) | (19) | 7 |
Other comprehensive income (loss) | (12,540) | 14,281 | 1,920 |
Software and hardware | |||
Revenue | 40,698 | 29,647 | 22,586 |
Operating costs and expenses | |||
Cost of revenue | 3,064 | 1,112 | 953 |
SaaS, maintenance, and consulting | |||
Revenue | 22,861 | 15,743 | 12,115 |
Operating costs and expenses | |||
Cost of revenue | $ 5,622 | $ 2,929 | $ 2,442 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Total | CommonStock | AdditionalPaid-InCapital | AccumulatedDeficit | AccumulatedOtherComprehensiveIncome (Loss) |
Beginning Balance (in shares) at Sep. 30, 2015 | 31,721,000 | ||||
Beginning Balance at Sep. 30, 2015 | $ 30,433 | $ 32 | $ 63,905 | $ (33,501) | $ (3) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Exercise of stock options (in shares) | 661,663 | 662,000 | |||
Exercise of stock options | $ 1,755 | $ 1 | 1,754 | ||
Settlement of restricted stock units (in shares) | 262,000 | ||||
Settlement of restricted stock units | 0 | ||||
Acquisition-related shares issued (in shares) | 137,000 | ||||
Acquisition-related shares issued | 0 | ||||
Stock-based compensation expense | 4,079 | 4,079 | |||
Amortization of closing shares and earnout shares | 1,298 | 1,298 | |||
Components of other comprehensive income (loss): | |||||
Net income (loss) | 1,959 | 1,959 | |||
Currency translation adjustment | (46) | (46) | |||
Change in unrealized gain (loss) on investments | 7 | 7 | |||
Other comprehensive income (loss) | 1,920 | ||||
Ending Balance (in shares) at Sep. 30, 2016 | 32,782,000 | ||||
Ending Balance at Sep. 30, 2016 | $ 39,485 | $ 33 | 71,036 | (31,542) | (42) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Exercise of stock options (in shares) | 235,514 | 235,000 | |||
Exercise of stock options | $ 687 | 687 | |||
Settlement of restricted stock units (in shares) | 707,000 | ||||
Settlement of restricted stock units | 0 | $ 1 | (1) | ||
Stock-based compensation expense | 5,478 | 5,478 | |||
Amortization of closing shares and earnout shares | 1,477 | 1,477 | |||
Components of other comprehensive income (loss): | |||||
Net income (loss) | 14,092 | 14,092 | |||
Currency translation adjustment | 208 | 208 | |||
Change in unrealized gain (loss) on investments | (19) | (19) | |||
Other comprehensive income (loss) | $ 14,281 | ||||
Ending Balance (in shares) at Sep. 30, 2017 | 33,724,392 | 33,724,000 | |||
Ending Balance at Sep. 30, 2017 | $ 61,408 | $ 34 | 78,677 | (17,450) | 147 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Cumulative-effect adjustment from the adoption of ASU 2016-09 | ASU 2016-09 | $ 8,255 | 8,255 | |||
Exercise of stock options (in shares) | 250,823 | 251,000 | |||
Exercise of stock options | $ 743 | 743 | |||
Settlement of restricted stock units (in shares) | 745,000 | ||||
Settlement of restricted stock units | 0 | $ 1 | (1) | ||
Issuance of common stock under employee stock purchase plan (in shares) | 61,000 | ||||
Issuance of common stock under employee stock purchase plan | 382 | 382 | |||
Acquisition-related shares issued (in shares) | 3,180,000 | ||||
Acquisition-related shares issued | 27,486 | $ 3 | 27,483 | ||
Stock-based compensation expense | 8,950 | 8,950 | |||
Amortization of closing shares and earnout shares | 710 | 710 | |||
Components of other comprehensive income (loss): | |||||
Net income (loss) | (11,807) | (11,807) | |||
Currency translation adjustment | (723) | (723) | |||
Change in unrealized gain (loss) on investments | (10) | (10) | |||
Other comprehensive income (loss) | $ (12,540) | ||||
Ending Balance (in shares) at Sep. 30, 2018 | 37,961,224 | 37,961,000 | |||
Ending Balance at Sep. 30, 2018 | $ 95,394 | $ 38 | $ 116,944 | $ (21,002) | $ (586) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Operating activities | |||
Net income (loss) | $ (11,807) | $ 14,092 | $ 1,959 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||
Stock-based compensation expense | 8,950 | 5,478 | 4,079 |
Amortization of closing shares and earnout shares | 355 | 1,579 | 1,503 |
Amortization of acquisition-related intangible assets | 4,023 | 591 | 598 |
Depreciation and other amortization | 615 | 322 | 790 |
Accretion and amortization on debt securities and other | (14) | 30 | 149 |
Net change in the estimated fair value of acquisition-related contingent consideration | 1,750 | 0 | 0 |
Deferred income taxes | 3,636 | (11,065) | (127) |
Changes in assets and liabilities: | |||
Accounts receivable | (5,673) | (2,101) | (1,002) |
Other assets | (1,676) | 249 | (586) |
Accounts payable | 309 | 593 | (222) |
Accrued payroll and related taxes | 2,553 | 429 | 1,197 |
Deferred revenue | 1,670 | (269) | (67) |
Other liabilities | 935 | 517 | (417) |
Net cash provided by operating activities | 5,626 | 10,445 | 7,854 |
Investing activities | |||
Purchases of investments | (15,391) | (39,939) | (33,658) |
Sales and maturities of investments | 41,018 | 32,650 | 30,623 |
Payments for business acquisitions, net of cash acquired | (29,744) | 0 | 0 |
Purchases of property and equipment | (4,307) | (488) | (250) |
Net cash used in investing activities | (8,424) | (7,777) | (3,285) |
Financing activities | |||
Proceeds from the issuance of equity plan common stock | 1,125 | 687 | 1,755 |
Payment for aquisition-related contingent consideration | (1,284) | 0 | 0 |
Principal payments on capital lease obligations | 0 | 0 | (22) |
Principal payments on other borrowings | (270) | 0 | 0 |
Net cash provided by (used in) financing activities | (429) | 687 | 1,733 |
Foreign currency effect on cash and cash equivalents | (34) | (76) | (45) |
Net increase (decrease) in cash and cash equivalents | (3,261) | 3,279 | 6,257 |
Cash and cash equivalents at beginning of period | 12,289 | 9,010 | 2,753 |
Cash and cash equivalents at end of period | 9,028 | 12,289 | 9,010 |
Supplemental disclosures of cash flow information: | |||
Cash paid for interest | 29 | 0 | 1 |
Cash paid for income taxes | 402 | 113 | 17 |
Supplemental disclosures of non-cash investing and financing activities: | |||
Unrealized holding gain (loss) on available for sale investments | $ (10) | $ (19) | $ 7 |
NATURE OF OPERATIONS AND SUMMAR
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Operations Mitek Systems, Inc. ("Mitek" or the "Company") is a leading innovator of mobile capture and digital identity verification solutions. We are a software development company with expertise in artificial intelligence and machine learning. The Company is currently serving more than 6,100 financial services organizations and leading marketplace and financial technology ("fintech") brands across the globe. The Company's solutions are embedded in native mobile apps and mobile optimized websites to facilitate better mobile user experiences, fraud detection and reduction, and compliant transactions. Mitek's Mobile Deposit® solution is used today by millions of consumers in the United States ("U.S.") and Canada for mobile check deposit. Mitek’s Mobile Verify™ is an important technology used to verify people’s identities at the point of onboarding via web or mobile device. Scanning an identity document enables an enterprise to identify the person with whom they are conducting business, comply with growing governmental Know Your Customer ("KYC") and Anti-Money Laundering ("AML") regulatory requirements, and to improve the overall customer experience for digital onboarding. To be sure the person submitting the identity document is who they say they are, Mitek's Mobile Verify Face Comparison provides an incremental layer of verification and compares the face on the identity document with the selfie photo of the user. Mitek's Mobile Verify Face Comparison technology uses advanced liveness detection so it cannot be spoofed. The identification capture process provided by Mitek can also provide prefill of much of the data obtained from the identity document into an application, requiring far fewer key strokes, reducing keying errors, and improving both operational efficiency and the customer experience. Today, the financial services verticals (banks, credit unions, lenders, payments processors, card issuers, fintech companies, etc.) represent the greatest percentage of use of The Company's solutions, but there is accelerated adoption by marketplaces, sharing economy, telecommunications, healthcare, travel, and retail sectors. Similarly, websites that must verify the customer’s age (or other consumer information) prior to selling goods can do so by verifying identity documents. Mitek uses machine learning to constantly improve the product performance of Mobile Verify™ and applies artificial intelligence to increase automation and speed of approvals of identification documents. The core of the Company's user experience is Mitek MiSnap™, a touch-free automated capture technology, which can be incorporated across product lines. It provides a simple and superior user-experience, making transactions on mobile devices fast, accurate, and easy for the consumer while helping organizations drive revenue from the increasingly popular mobile channel. Mobile Fill™, Mitek's mobile identity capture solution, enables the camera to serve as a keyboard. Using Mobile Fill™, consumers can quickly prefill any form with personal data by simply snapping a picture of their driver's license, credit card, or other similar identity document. Mobile Deposit® is the category leading product that allows individuals and businesses to remotely deposit checks using their camera-equipped smartphone or tablet. The Company's Mobile Deposit® solution has now processed over two billion check deposits. Mitek began selling Mobile Deposit® in the second fiscal quarter of 2008, and received our first patent issued for this product in August 2010. As of September 30, 2018, the Company has been granted 49 patents and it has an additional 21 patent applications pending. CheckReader ™ , which the Company acquired through the acquisition of A2iA (as defined below), enables financial institutions to automatically extract data from a check image received across all deposit channels – branch, ATM, RDC, and mobile. Through the automatic recognition of all fields on checks, whether handwritten or machine print, CheckReader ™ speeds the time to deposit for banks and customers and reduces costs formerly incurred before images could be exchanged. The Company markets and sells its products and services worldwide through internal, direct sales teams located in the U.S., Europe, and Latin America as well as through channel partners. The Company's partner sales strategy includes channel partners who are financial services technology providers and identity verification providers. These partners integrate the Company's products into their solutions to meet the needs of their customers. Basis of Presentation The financial statements are prepared under the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 105-10, Generally Accepted Accounting Principles , in accordance with accounting principles generally accepted in the U.S. (“GAAP”). Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. Foreign Currency The Company has foreign subsidiaries that operate and sell products and services in various countries and jurisdictions around the world. As a result, the Company is exposed to foreign currency exchange risks. For those subsidiaries whose functional currency is not the U.S. dollar, assets and liabilities are translated into U.S. dollars equivalents at the exchange rate in effect on the balance sheet date and revenues and expenses are translated into U.S. dollars using the average exchange rate over the period. Resulting currency translation adjustments are recorded in accumulated other comprehensive income (loss) in the consolidated balance sheet. The Company recorded net losses resulting from foreign exchange translation of $0.7 million for the fiscal year ended September 30, 2018, net gains resulting from foreign exchange translation of $0.2 million for the fiscal year ended September 30, 2017, and net losses resulting from foreign exchange translation of $46,000 for the fiscal year ended September 30, 2016. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses, deferred taxes, and related disclosure of contingent assets and liabilities. On an ongoing basis, management reviews its estimates based upon currently available information. Actual results could differ materially from those estimates. These estimates include, but are not limited to, assessing the collectability of accounts receivable, estimation of the value of stock-based compensation awards, fair value of assets and liabilities acquired, impairment of goodwill and intangible assets, useful lives of intangible assets, vendor specific objective evidence (“VSOE”) of fair value related to revenue recognition, and income taxes. Revenue Recognition Revenue from sales of software licenses sold through direct and indirect channels is recognized upon shipment of the related product, if the requirements of FASB ASC Topic 985-605, Software Revenue Recognition (“ASC 985-605”) are met, including evidence of an arrangement, delivery, fixed or determinable fee, collectability, and VSOE of the fair value of the undelivered element. If the requirements of ASC 985-605 are not met at the date of shipment, revenue is not recognized until such elements are known or resolved. Revenue from customer support services, or maintenance revenue, includes post-contract support and the rights to unspecified upgrades and enhancements. VSOE of fair value for customer support services is determined by reference to the price the customer pays for such element when sold separately; that is, the renewal rate offered to customers. In those instances when objective and reliable evidence of fair value exists for the undelivered items but not for the delivered items, the residual method is used to allocate the arrangement consideration. Under the residual method, the amount of arrangement consideration allocated to the delivered items equals the total arrangement consideration less the aggregate fair value of the undelivered items. Revenue from post-contract customer support is recognized ratably over the term of the contract. Certain customers have agreements that provide for usage fees above fixed minimums. Usage fees above fixed minimums are recognized as revenue when such amounts are reasonably estimable and billable. Revenue from professional services is recognized when such services are delivered. When a software sales arrangement requires professional services related to significant production, modification, or customization of software, or when a customer considers professional services essential to the functionality of the software product, revenue is recognized based on predetermined milestone objectives required to complete the project, as those milestone objectives are deemed to be substantive in relation to the work performed. Any expected losses on contracts in progress are recorded in the period in which the losses become probable and reasonably estimable. The Company provides hosting services that give customers access to software that resides on its servers. The Company’s model typically includes an up-front fee and a periodic commitment from the customer that commences upon completion of the implementation through the remainder of the customer life. The up-front fee is the initial setup fee, or the implementation fee. The periodic commitment includes, but is not limited to, a fixed periodic fee or a transactional fee based on system usage that exceeds committed minimums. If the up-front fee does not have standalone value, revenue is deferred until the date the customer commences use of the Company’s services, at which point the up-front fees are recognized ratably over the life of the customer arrangement. The Company does not view the signing of the contract or the provision of initial setup services as discrete earnings events that have stand-alone value. As a result of the acquisition of ICAR Vision Systems, S.L. ("ICAR"), the Company also generates revenues from the sale of hardware scanner boxes and servers. Revenue allocated to the delivered hardware and the related essential software is recognized at the time of sale provided the conditions for recognition of revenue have been met. Revenue allocated to post contract support is deferred and recognized on a straight-line basis over the estimated term of the support period. Net Income (Loss) Per Share The Company calculates net income (loss) per share in accordance with FASB ASC Topic 260, Earnings per Share . Basic net income (loss) per share is based on the weighted-average number of common shares outstanding during the period. Diluted net income (loss) per share also gives effect to all potentially dilutive securities outstanding during the period, such as restricted stock units (“RSUs”), stock options, and Employee Stock Purchase Plan ("ESPP") shares, if dilutive. In a period with a net loss position, potentially dilutive securities are not included in the computation of diluted net loss because to do so would be antidilutive, and the number of shares used to calculate basic and diluted net loss is the same. For the fiscal years ended September 30, 2018, 2017 and 2016, the following potentially dilutive common shares were excluded from the net income (loss) per share calculation, as they would have been antidilutive (amounts in thousands) : 2018 2017 2016 Stock options 2,806 569 1,259 RSUs 2,580 83 624 ESPP common stock equivalents 71 — — IDchecker closing shares — — 349 IDchecker earnout shares — 24 — Total potentially dilutive common shares outstanding 5,457 676 2,232 The computation of basic and diluted net income (loss) per share for the fiscal years ended September 30, 2018, 2017, and 2016 is as follows (amounts in thousands, except per share data): 2018 2017 2016 Net income (loss) $ (11,807) $ 14,092 $ 1,959 Weighted-average shares outstanding—basic 35,811 33,083 31,587 Common stock equivalents — 2,454 2,232 Weighted-average shares outstanding—diluted 35,811 35,537 33,819 Net income (loss) per share: Basic $ (0.33) $ 0.43 $ 0.06 Diluted $ (0.33) $ 0.40 $ 0.06 Cash and Cash Equivalents Cash and cash equivalents are defined as highly liquid financial instruments with original maturities of three months or less. The Company's cash and cash equivalents are composed of interest and non-interest-bearing deposits and money market funds. Investments Investments consist of corporate notes and bonds, commercial paper, and U.S. Treasury securities. The Company classifies investments as available-for-sale at the time of purchase and reevaluates such classification as of each balance sheet date. All investments are recorded at estimated fair value. Unrealized gains and losses for available-for-sale securities are included in accumulated other comprehensive income (loss), a component of stockholders’ equity. The Company evaluates its investments to assess whether those with unrealized loss positions are other-than-temporarily impaired. Impairments are considered to be other-than-temporary if they are related to deterioration in credit risk or if it is likely that the Company will sell the securities before the recovery of its cost basis. Realized gains and losses and declines in value judged to be other-than-temporary are determined based on the specific identification method and are reported in other income (expense), net in the consolidated statements of operations and other comprehensive income (loss). No other-than-temporary impairment charges were recognized in the fiscal years ended September 30, 2018, 2017, and 2016. All investments whose maturity or sale is expected within one year are classified as “current” on the consolidated balance sheet. All other securities are classified as “long-term” on the consolidated balance sheet. Fair Value Measurements The carrying amounts of cash equivalents, investments, accounts receivable, accounts payable, and other accrued liabilities are considered representative of their respective fair values because of the short-term nature of those instruments. Accounts Receivable and Allowance for Doubtful Accounts Trade accounts receivable are recorded at the net invoice value and are not interest bearing. The Company considers receivables past due based on the contractual payment terms. Allowances for doubtful accounts are established based on various factors including credit profiles of the Company’s customers, contractual terms and conditions, historical payments, and current economic trends. The Company reviews its allowances by assessing individual accounts receivable over a specific aging and amount. Accounts receivable are written off on a case-by-case basis, net of any amounts that may be collected. The Company had no write-offs of the allowance for doubtful accounts for the fiscal years ended September 30, 2018, 2017, and 2016, respectively. The Company maintained an allowance for doubtful accounts of $262,000 and $31,000 as of September 30, 2018 and 2017, respectively. Deferred Maintenance Fees Deferred maintenance fees consist of capitalized costs associated with software maintenance fees paid to vendors who supply licenses and maintenance for software embedded in the Company’s products that it sells to customers. These software maintenance fees, which are included in prepaid expenses on the consolidated balance sheets, are typically billed annually to the Company and are amortized to cost of revenue-maintenance and professional services in the consolidated statements of operations and other comprehensive income (loss) over the maintenance period, which is typically one year. Property and Equipment Property and equipment are carried at cost. The following is a summary of property and equipment as of September 30, 2018 and 2017 (amounts shown in thousands): 2018 2017 Property and equipment—at cost: Leasehold improvements $ 3,825 $ 1,128 Equipment 2,604 1,801 Capitalized internal-use software development costs 916 — Furniture and fixtures 425 257 7,770 3,186 Less: accumulated depreciation and amortization (3,105) (2,573) Total property and equipment, net $ 4,665 $ 613 Depreciation and amortization of property and equipment are provided using the straight-line method over estimated useful lives ranging from three to ten years. Leasehold improvements are amortized over the shorter of the lease term or estimated useful life of the assets. Depreciation and amortization of property and equipment totaled $0.6 million, $0.3 million, and $0.8 million for the fiscal years ended September 30, 2018, 2017, and 2016, respectively. Expenditures for repairs and maintenance are charged to operations. Total repairs and maintenance expenses were $0.1 million, $0.2 million and $0.2 million for the fiscal years ended September 30, 2018, 2017, and 2016, respectively. Long-Lived Assets The Company evaluates the carrying value of long-lived assets, including license agreements and other intangible assets, when events and circumstances indicate that these assets may be impaired or in order to determine whether any revision to the related amortization periods should be made. This evaluation is based on management’s projections of the undiscounted future cash flows associated with each product or asset. If management’s evaluation indicates that the carrying values of these intangible assets were impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. The Company did not record any impairment of long-lived assets for the fiscal years ended September 30, 2018, 2017, and 2016. Capitalized Software Development Costs Costs incurred for the development of software that will be sold, leased, or otherwise marketed are capitalized when technological feasibility has been established. Software development costs consist primarily of compensation of development personnel and related overhead incurred to develop new products and upgrade and enhance the Company’s current products, as well as fees paid to outside consultants. Capitalization of software development costs ceases and amortization of capitalized software development costs commences when the products are available for general release. For the fiscal years ended September 30, 2018 and 2017, no software development costs were capitalized because the time period and cost incurred between technological feasibility and general release for all software product releases were not material. The Company had no amortization expense from capitalized software costs during the years ended September 30, 2018, 2017, or 2016. Costs related to software acquired, developed, or modified solely to meet our internal requirements, with no substantive plans to market such software at the time of development, are capitalized. Costs incurred during the preliminary planning and evaluation stage of the project and during post implementation operational stage are expensed as incurred. Costs incurred during the application development stage of the project are capitalized. The Company defines the design, configuration, and coding process as the application development stage. The Company capitalized $0.9 million of costs related to computer software developed for internal use during the year ended September 30, 2018. The Company did not capitalize any costs related to computer software developed for internal use during the year ended September 30, 2017. The Company recognized $0.1 million of amortization expense from internal use software during the year ended September 30, 2018. The Company had no amortization expense from internal use software during the years ended September 30, 2017 and 2016. Goodwill and Purchased Intangible Assets The Company’s goodwill resulted from prior acquisitions. Goodwill and intangible assets with indefinite useful lives are not amortized, but are tested for impairment at least annually or as circumstances indicate that their value may no longer be recoverable. In accordance with ASC Topic 350, Intangibles—Goodwill and Other (“ASC Topic 350”), the Company reviews its goodwill and indefinite-lived intangible asset for impairment at least annually in its fiscal fourth quarter and more frequently if events or changes in circumstances occur that indicate a potential reduction in the fair value of its reporting unit and/or its indefinite-lived intangible asset below their respective carrying values. Examples of such events or circumstances include: a significant adverse change in legal factors or in the business climate, a significant decline in the Company’s stock price, a significant decline in the Company’s projected revenue or cash flows, an adverse action or assessment by a regulator, unanticipated competition, a loss of key personnel, or the presence of other indicators that would indicate a reduction in the fair value of a reporting unit. The Company’s goodwill is considered to be impaired if management determines that the carrying value of the reporting unit to which the goodwill has been assigned exceeds management’s estimate of its fair value. Based on the guidance provided by ASC Topic 350 and ASC Topic 280, Segment Reporting (“ASC Topic 280”), management has determined that the Company operates in one segment and consists of one reporting unit given the similarities in economic characteristics between its operations and the common nature of its products, services and customers. Because the Company has only one reporting unit, and because the Company is publicly traded, the Company determines the fair value of the reporting unit based on its market capitalization as it believe this represents the best evidence of fair value. In the fourth quarter of fiscal 2018, management completed its annual goodwill impairment test and concluded that the Company’s goodwill was not impaired. The Company’s conclusion that goodwill was not impaired was based on a comparison of its net assets to its market capitalization. Because the Company determines the fair value of its reporting unit based on its market capitalization, the Company’s future reviews of goodwill for impairment may be impacted by changes in the price of its common stock, par value $0.001 per share ("Common Stock"). For example, a significant decline in the price of the Company’s Common Stock may cause the fair value of its goodwill to fall below its carrying value. Therefore, the Company cannot provide assurance that when it completes its future reviews of goodwill for impairment, a material impairment charge will not be recorded. Intangible assets are amortized over their useful lives. Each period, the Company evaluates the estimated remaining useful life of its intangible assets and whether events or changes in circumstances warrant a revision to the remaining period of amortization. The carrying amounts of these assets are periodically reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of these assets may not be recoverable. Recoverability of these assets is measured by comparing the carrying amount of each asset to the future undiscounted cash flows the asset is expected to generate. The carrying amount of such assets is reduced to fair value if the undiscounted cash flows used in the test for recoverability are less than the carrying amount of such assets. No impairment charge related to the impairment of intangible assets was recorded during the years ended September 30, 2018, 2017, and 2016. Deferred Revenue Deferred revenues represent advance payments or billings for software licenses, professional services, and maintenance billed in advance of the time revenue is recognized. Deferred maintenance revenue represents customer billings, paid up front, generally annually at the beginning of each maintenance period, with revenue recognized ratably over such period. For certain other licensing arrangements, revenue attributable to undelivered elements, including post-contract customer support which typically includes telephone support and the right to receive unspecified upgrades and enhancements of software on a when-and-if-available basis, is based upon the sales price of those elements when sold separately and is recognized ratably on a straight-line basis over the term of the arrangement. Guarantees In the ordinary course of business, the Company is not subject to potential obligations under guarantees that fall within the scope of FASB ASC Topic 460, Guarantees (“ASC 460”), except for standard indemnification and warranty provisions that are contained within many of the Company’s customer license and service agreements and certain supplier agreements, and give rise only to the disclosure requirements prescribed by ASC 460. Indemnification and warranty provisions contained within the Company’s customer license and service agreements and certain supplier agreements are generally consistent with those prevalent in the Company’s industry. The Company has not historically incurred significant obligations under customer indemnification or warranty provisions and does not expect to incur significant obligations in the future. Accordingly, the Company does not maintain accruals for potential customer indemnification or warranty-related obligations. Loss Contingencies The Company records its best estimates of a loss contingency when it is considered probable and the amount can be reasonably estimated. When a range of loss can be reasonably estimated with no best estimate in the range, the Company records the minimum estimated liability related to the claim. As additional information becomes available, the Company assesses the potential liability related to the Company’s pending loss contingency and revises its estimates. The Company discloses contingencies if there is at least a reasonable possibility that a material loss or a material additional loss may have been incurred. The Company’s legal costs are expensed as incurred. Other Borrowings The Company has certain loan agreements with Spanish government agencies which were assumed when the Company acquired ICAR. These agreements are have repayment periods of five Income Taxes The Company accounts for income taxes in accordance with FASB ASC Topic 740, Income Taxes (“ASC 740”). Deferred tax assets and liabilities arise from temporary differences between the tax bases of assets and liabilities and their reported amounts in the financial statements that will result in taxable or deductible amounts in future years. Management evaluates the available evidence about future taxable income and other possible sources of realization of deferred tax assets. The valuation allowance reduces deferred tax assets to an amount that represents management’s best estimate of the amount of such deferred tax assets that more likely than not will be realized. See Note 6 of the consolidated financial statements for additional details. The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the tax authorities, based on the technical merits of the position. The tax benefit is measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. The Company recognizes interest and penalties related to income tax matters in income tax expense. See Note 6 of the consolidated financial statements for additional details. The Tax Cuts and Jobs Act of 2017 (the "Tax Act") significantly changes existing U.S. tax law and includes numerous provisions that affect the Company. See Note 6 of the consolidated financial statements for further discussion. Stock-Based Compensation The Company issues RSUs, stock options, and Senior Executive Long-Term Incentive Restricted Stock Units (“Senior Executive Performance RSUs”) as awards to its employees. Additionally, eligible employees may participate in the Company’s ESPP. Employee stock awards are measured at fair value on the date of grant and expense is recognized using the straight-line single-option method in accordance with FASB ASC Topic 718, Compensation—Stock Compensation (“ASC 718”). Forfeitures are recorded as they occur. The Company assigns fair value to RSUs based on the closing stock price of its Common Stock on the date of grant. The Company estimates the fair value of stock options and ESPP shares using the Black-Scholes option pricing model. The Black-Scholes option pricing model requires subjective assumptions, including future stock price volatility and expected time to exercise, which greatly affect the calculated values. The expected term of options granted is derived from historical data on employee exercises and post-vesting employment termination behavior. The risk-free rate selected to value any particular grant is based on the U.S. Treasury rate that corresponds to the expected life of the grant effective as of the date of the grant. The expected volatility is based on the historical volatility of the Company’s stock price. These factors could change in the future, affecting the determination of stock-based compensation expense in future periods. The Company estimates the fair value of Senior Executive Performance RSUs and similar awards using the Monte-Carlo simulation. The Monte-Carlo simulation requires subjective assumptions, including the Company’s valuation date stock price, the annual risk-free interest rate, expected volatility, the probability of reaching the performance targets, and a 20-trading-day average stock price. Advertising Expense Advertising costs are expensed as incurred and totaled $0.5 million, $0.3 million and $0.2 million during the fiscal years ended September 30, 2018, 2017, and 2016, respectively. Research and Development Research and development costs are expensed in the period incurred. Leases Leases are reviewed and classified as capital or operating at their inception. For leases that contain rent escalations, the Company records the total rent payable on a straight-line basis over the term of the lease. The difference between rent payments and straight-line rent expense is recorded as deferred rent. Segment Reporting FASB ASC Topic 280, Segment Reporting , requires the use of a management approach in identifying segments of an enterprise. During the fiscal year ended September 30, 2018, management determined that the Company has only one operating segment: the development, sale, and service of proprietary software solutions related to mobile imaging. Comprehensive Income (Loss) Comprehensive income (loss) consists of net income (loss), unrealized gains and losses on available-for-sale securities, and foreign currency translation adjustments. Included on the consolidated balance sheet is an accumulated other comprehensive income (loss) of $(0.6) million and $0.1 million at September 30, 2018 and 2017, respectively. Recently Adopted Accounting Pronouncements In March 2016, the FASB issued Accounting Standards Update (“ASU”) No. 2016-09, Compensation—Stock Compensation (Topic 718) (“ASU 2016-09”) which simplified certain aspects of the accounting for share-based payment transactions, including income taxes, classification of awards and classification in the statement of cash flows. The new standard requires excess tax benefits and tax deficiencies to be recorded in the consolidated statements of operations and other comprehensive income (loss) as a component of the provision for income taxes when stock awards vest or are settled. In addition, it eliminates the requirement to reclassify cash flows related to excess tax benefits from operating activities to financing activities on the consolidated statements of cash flows. The standard also provides an accounting policy election to account for forfeitures as they occur and clarifies that all cash payments made to tax authorities on an employee’s behalf for withheld shares should be presented as a financing activity on the cash flows statement. The Company adopted ASU 2016-09 prospectively as of October 1, 2017, resulting in net cumulative-effect adjustment to increase retained earnings by $8.3 million, primarily related to the recognition of the previously unrecognized excess tax benefits using the modified retrospective method. The previously unrecognized excess tax effect wa |
BUSINESS COMBINATIONS
BUSINESS COMBINATIONS | 12 Months Ended |
Sep. 30, 2018 | |
Business Combinations [Abstract] | |
BUSINESS COMBINATIONS | BUSINESS COMBINATIONS A2iA Group II, S.A.S. On May 23, 2018, the Company acquired all of the issued and outstanding shares of A2iA Group II, S.A.S. ("A2iA"), a simplified joint stock company formed under the laws of France, pursuant to a share purchase agreement, by and among the Company, each of the holders of outstanding shares of A2iA and Andera Partners, S.C.A., as representative of the sellers (the “A2iA Acquisition”). A2iA is a software development organization focused on delivering specialized and highly intelligent data extraction tools that enable customers to optimize their data capture, document processing, and workflow automation capabilities. Upon completion of the A2iA Acquisition, A2iA became a direct wholly owned subsidiary of the Company. The A2iA Acquisition extends Mitek’s global leadership position in both mobile check deposit and digital identity verification and combines the two market leaders in document recognition and processing. As consideration for the A2iA Acquisition, the Company (i) made a cash payment of $26.8 million, net of cash acquired; (ii) issued 2,514,588 shares, or $21.9 million, of the Company’s Common Stock; and (iii) incurred transaction related liabilities of $0.2 million. The Company incurred $2.1 million of expense in connection with the A2iA Acquisition primarily related to legal fees, outside service costs, and travel expense, which are included in acquisition-related costs and expenses in the consolidated statements of operations and other comprehensive income (loss). On May 23, 2018, the Company deposited $0.7 million of the cash payment and 508,479 shares, or $4.4 million, of Common Stock into an escrow fund to serve as collateral and partial security for certain indemnification rights of the Company. The escrow fund will be maintained for up to 24 months following the completion of the A2iA Acquisition or until such earlier time as the escrow fund is exhausted. The Company used cash on hand for the cash paid on May 23, 2018. ICAR Vision Systems, S.L. On October 16, 2017, Mitek Holding B.V., a company incorporated under the laws of The Netherlands and a wholly owned subsidiary of the Company (“Mitek Holding B.V.”), acquired all of the issued and outstanding shares of ICAR, a company incorporated under the laws of Spain (the “ICAR Acquisition”), and each of its subsidiaries, pursuant to a Share Purchase Agreement (the “Purchase Agreement”), by and among, the Company, Mitek Holding B.V., and each of the shareholders of ICAR (the “Sellers”). ICAR is a technology provider of identity fraud proofing and document management solutions for web, desktop, and mobile platforms. Upon completion of the ICAR Acquisition, ICAR became a direct wholly owned subsidiary of Mitek Holding B.V. and an indirect wholly owned subsidiary of the Company. ICAR is a leading provider of consumer identity verification solutions in Spain and Latin America. The ICAR Acquisition strengthens the Company’s position as a global digital identity verification powerhouse in the Consumer Identity and Access Management solutions market. As consideration for the ICAR Acquisition, the Company agreed to an aggregate purchase price of up to $13.9 million, net of cash acquired. On October 16, 2017, the Company: (i) made a cash payment to Sellers of $3.0 million, net of cash acquired and subject to adjustments for transaction expenses, escrow amounts, indebtedness, and working capital adjustments; and (ii) issued to Sellers 584,291 shares, or $5.6 million, of Common Stock. In addition to the foregoing, the Sellers may be entitled to additional cash consideration upon achievement of certain milestones as follows: (a) subject to achievement of the revenue target for the fourth quarter of calendar 2017, the Company will pay to Sellers up to $1.5 million (the “Q4 Consideration”), which amount shall be deposited (as additional funds) into the escrow fund described below; and (b) subject to achievement of certain revenue and net income targets for ICAR for the twelve-month period ending on September 30, 2018, and the twelve-month period ending on September 30, 2019, the Company will pay to Sellers up to $3.8 million in additional cash consideration (the “Earnout Consideration”); provided that if the revenue target set forth in clause (a) is not met, then the Q4 Consideration will instead be added to the Earnout Consideration payable upon (and subject to) achievement of the revenue and net income targets for the twelve-month period ending on September 30, 2018. The Company estimated the fair value of the total Q4 Consideration and Earnout Consideration to be $2.9 million on October 16, 2017, which was determined using a discounted cash flow methodology based on financial forecasts determined by management that included assumptions about revenue growth and discount rates. Each quarter the Company revises the estimated fair value of the Earnout Consideration. Accordingly, an additional $1.8 million of expense was recognized in acquisition-related costs and expenses in the consolidated statements of operations and other comprehensive income (loss) during the year ended September 30, 2018. In October 2018, the Company had determined that ICAR had achieved its revenue and net income targets for twelve-month period ending on September 30, 2018. As such the Company will pay $1.8 million in earnout consideration during the first quarter of Fiscal 2019. The Company incurred $0.5 million of expense in connection with the ICAR Acquisition primarily related to legal fees, outside service costs, and travel expense, which are included in acquisition-related costs and expenses in the consolidated statements of operations and other comprehensive income (loss). On October 16, 2017, the Company deposited $1.5 million of cash into an escrow fund to serve as collateral and partial security for working capital adjustments and certain indemnification rights. In April 2018, the Q4 Consideration of $1.5 million was deposited into the escrow fund. The escrow fund will be maintained for up to 24 months following the completion of the ICAR Acquisition or until such earlier time as the escrow fund is exhausted. The Company used cash on hand for cash paid on October 16, 2017, and under the terms of the Purchase Agreement, the Company has agreed to guarantee the obligations of Mitek Holding B.V. thereunder. Acquisitions are accounted for using the purchase method of accounting in accordance with ASC Topic 805, Business Combinations . Accordingly, the results of operations of A2iA and ICAR have been included in the accompanying consolidated financial statements since the date of each acquisition. The purchase price for both the A2iA Acquisition and the ICAR Acquisition have been allocated to the tangible and intangible assets acquired and liabilities assumed based upon the respective estimates of fair value as of the date of each acquisition, and are based on assumptions that the Company’s management believes are reasonable given the information currently available. The purchase accounting for the A2iA Acquisition remains preliminary as of September 30, 2018. The Company is in the process of completing its valuation of certain intangible assets and the valuation of the acquired deferred income taxes. The final allocations of each such purchase price to intangible assets and deferred income taxes may differ materially from the information presented in these unaudited consolidated financial statements. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed during the year ended September 30, 2018 ( amounts shown in thousands ): A2iA ICAR Total Current assets $ 3,929 $ 2,036 $ 5,965 Property, plant, and equipment 307 83 390 Intangible assets 28,610 6,407 35,017 Goodwill 24,867 6,936 31,803 Other non-current assets 1,177 87 1,264 Current liabilities (2,564) (1,652) (4,216) Deferred income tax liabilities (7,503) (1,602) (9,105) Other non-current liabilities (7) (828) (835) Net assets acquired $ 48,816 $ 11,467 $ 60,283 The goodwill recognized is due to expected synergies and other factors and is not expected to be deductible for income tax purposes. The Company estimated the fair value of identifiable acquisition-related intangible assets with definite lives primarily based on discounted cash flow projections that will arise from these assets. The Company exercised significant judgment with regard to assumptions used in the determination of fair value such as with respect to discount rates and the determination of the estimated useful lives of the intangible assets. The following table summarizes the estimated fair values and estimated useful lives of intangible assets with definite lives acquired during the year ended September 30, 2018 ( amounts shown in thousands, except for years ): Amortization Period Amount assigned A2iA Completed technologies 7.0 years $ 13,015 Customer relationships 5.0 years 15,360 Trade names 5.0 years 235 Total intangible assets acquired from A2iA $ 28,610 ICAR Completed technologies 5.0 years $ 4,956 Customer relationships 2.0 years 1,298 Trade names 3.0 years 153 Total intangible assets acquired from ICAR $ 6,407 The following unaudited pro forma financial information is presented as if the acquisitions had taken place at the beginning of the periods presented and should not be taken as representative of the Company’s future consolidated results of operations. The following unaudited pro forma information includes adjustments for the amortization expense related to the identified intangible assets. The following table summarizes the Company’s unaudited pro forma financial information is presented as if the acquisitions occurred on October 1, 2016 ( amounts shown in thousands ): For the years ended September 30, 2018 2017 Pro forma revenue $ 78,130 $ 60,802 Pro forma net income (loss) $ (12,268) $ 6,855 For the year ended September 30, 2018, revenue of $9.1 million and a net loss of $5.3 million related to the A2iA and ICAR businesses since the respective acquisition dates are included in the Company's consolidated statements of operations. |
INVESTMENTS
INVESTMENTS | 12 Months Ended |
Sep. 30, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
INVESTMENTS | INVESTMENTS The Company determines the appropriate designation of investments at the time of purchase and reevaluates such designation as of each balance sheet date. All of the Company’s investments are designated as available-for-sale debt securities. As of September 30, 2018 and 2017, the Company’s short-term investments have maturity dates of less than one year from the balance sheet date. The Company’s long-term investments have maturity dates of greater than one year from the balance sheet date. Available-for-sale marketable securities are carried at fair value as determined by quoted market prices for identical or similar assets, with unrealized gains and losses, net of taxes, and reported as a separate component of stockholders’ equity. Management reviews the fair value of the portfolio at least monthly and evaluates individual securities with fair value below amortized cost at the balance sheet date. For debt securities, in order to determine whether impairment is other-than-temporary, management must conclude whether the Company intends to sell the impaired security and whether it is more likely than not that the Company will be required to sell the security before recovering its amortized cost basis. If management intends to sell an impaired debt security or it is more likely than not the Company will be required to sell the security prior to recovering its amortized cost basis, an other-than-temporary impairment is deemed to have occurred. The amount of an other-than-temporary impairment related to a credit loss, or securities that management intends to sell before recovery, is recognized in earnings. The amount of an other-than-temporary impairment on debt securities related to other factors is recorded consistent with changes in the fair value of all other available-for-sale securities as a component of stockholders’ equity in other comprehensive income. No other-than-temporary impairment charges were recognized in the fiscal years ended September 30, 2018, 2017, and 2016. The Company recorded a net realized loss from the sale of available-for-sale securities of $49,000 during the year ended September 30, 2018. There were no realized gains or losses from the sale of available-for-sale securities during the years ended September 30, 2017 and 2016. The cost of securities sold is based on the specific identification method. Amortization of premiums, accretion of discounts, interest, dividend income, and realized gains and losses are included in investment income. The following tables summarize investments by type of security as of September 30, 2018 and 2017, respectively (amounts shown in thousands): September 30, 2018: Cost Gross Unrealized Gains Gross Unrealized Losses Fair Market Value Available-for-sale securities: U.S. Treasury, short-term $ 3,693 $ — $ (10) $ 3,683 Corporate debt securities, short-term 4,779 — (14) 4,765 Total $ 8,472 $ — $ (24) $ 8,448 September 30, 2017: Cost Gross Unrealized Gains Gross Unrealized Losses Fair Market Value Available-for-sale securities: U.S. Treasury, short-term $ 3,897 $ — $ (3) $ 3,894 Corporate debt securities, short-term 26,393 — (8) 26,385 Corporate debt securities, long-term 3,785 — (5) 3,780 Total $ 34,075 $ — $ (16) $ 34,059 Fair Value Measurements and Disclosures FASB ASC Topic 820, Fair Value Measurements (“ASC 820”) defines fair value, establishes a framework for measuring fair value under GAAP and enhances disclosures about fair value measurements. Fair value is defined under ASC 820 as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value under ASC 820 must maximize the use of observable inputs and minimize the use of unobservable inputs. ASC 820 describes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value which consists of the following: • Level 1—Quoted prices in active markets for identical assets or liabilities; • Level 2—Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and • Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The following tables represent the fair value hierarchy of the Company’s investments and acquisition-related contingent consideration as of September 30, 2018 and 2017 (amounts shown in thousands): September 30, 2018: Balance Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Short-term investments: U.S. Treasury $ 3,683 $ 3,683 $ — $ — Corporate debt securities Financial 2,847 — 2,847 — Industrial 1,918 — 1,918 — Total assets at fair value $ 8,448 $ 3,683 $ 4,765 $ — Liabilities: Acquisition-related contingent consideration 3,051 — — 3,051 Total liabilities at fair value $ 3,051 $ — $ — $ 3,051 September 30, 2017: Balance Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Short-term investments: U.S. Treasury $ 3,894 $ 3,894 $ — $ — Corporate debt securities Financial 3,041 — 3,041 — Industrial 9,503 — 9,503 — Commercial paper Financial 10,850 — 10,850 — Industrial 2,991 — 2,991 — Total short-term investments at fair value 30,279 3,894 26,385 — Long-term investments: Corporate debt securities Financial 1,858 — 1,858 — Industrial 1,922 — 1,922 — Total assets at fair value $ 34,059 $ 3,894 $ 30,165 $ — Liabilities: Acquisition-related contingent consideration 354 — — 354 Total liabilities at fair value $ 354 $ — $ — $ 354 As of September 30, 2018, total acquisition-related contingent consideration related to the ICAR Acquisition of $1.8 million and $1.2 million is recorded in acquisition-related contingent consideration and other non-current liabilities, respectively, in the consolidated balance sheets. The following table includes a summary of the contingent consideration measured at fair value using significant unobservable inputs (Level 3) during the year ended September 30, 2018 (amounts shown in thousands): Balance at September 30, 2017 $ 354 Issuance of contingent consideration 2,867 Expenses recorded due to changes in fair value 2,105 Payment of contingent consideration (1,489) Issuance of common stock (710) Foreign currency effect on contingent consideration (76) Balance at September 30, 2018 $ 3,051 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 12 Months Ended |
Sep. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | GOODWILL AND INTANGIBLE ASSETS Goodwill The Company has goodwill balances of $34.4 million and $3.0 million at September 30, 2018 and 2017, respectively, representing the excess of costs over fair value of net assets of businesses acquired. Goodwill acquired in a business combination and determined to have an indefinite useful life is not amortized, but instead is tested for impairment at least annually in accordance with ASC Topic 350. The following table summarizes changes in the balance of goodwill during the year ended September 30, 2018 ( amounts shown in thousands ): Balance at September 30, 2017 $ 3,014 Acquisition of ICAR 6,936 Acquisition of A2iA 24,867 Foreign currency effect on goodwill (410) Balance at September 30, 2018 $ 34,407 Intangible assets Intangible assets include the value assigned to completed technologies, customer relationships, and trade names. The estimated useful lives for all of these intangible assets, range from two to seven years. Intangible assets as of September 30, 2018 and 2017 are summarized as follows (amounts shown in thousands, except for years): September 30, 2018: Weighted Average Amortization Period Cost Accumulated Amortization Net Completed technologies 6.4 years $ 20,341 $ 3,070 $ 17,271 Customer relationships 4.8 years 17,628 2,351 15,277 Trade names 4.5 years 618 219 399 Total intangible assets $ 38,587 $ 5,640 $ 32,947 September 30, 2017: Weighted Average Amortization Period Cost Accumulated Amortization Net Completed technologies 6.0 years $ 2,370 $ 833 $ 1,537 Customer relationships 6.0 years 970 341 629 Trade names 5.0 years 230 99 131 Total intangible assets $ 3,570 $ 1,273 $ 2,297 Amortization expense related to acquired intangible assets was $4.0 million, $0.6 million, and $0.6 million for fiscal years ended September 30, 2018, 2017, and 2016, respectively and is recorded in acquisition-related costs and expenses in the consolidated statements of operations. The estimated future amortization expense related to intangible assets for each of the five succeeding fiscal years is expected to be as follows (amounts shown in thousands): Estimated Future Amortization Expense 2019 $ 7,219 2020 6,594 2021 6,318 2022 5,909 2023 3,879 Thereafter 3,028 Total $ 32,947 |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 12 Months Ended |
Sep. 30, 2018 | |
Equity [Abstract] | |
STOCKHOLDERS' EQUITY | STOCKHOLDERS’ EQUITY Stock-based Compensation The following table summarizes stock-based compensation expense related to RSUs, stock options, and ESPP shares for the fiscal years ended September 30, 2018, 2017, and 2016, which were allocated as follows (amounts shown in thousands): 2018 2017 2016 Cost of revenue $ 78 $ 52 $ 39 Selling and marketing 2,656 1,577 1,099 Research and development 1,801 1,028 660 General and administrative 4,415 2,821 2,281 Stock-based compensation expense included in expenses $ 8,950 $ 5,478 $ 4,079 The fair value calculations for stock-based compensation awards to employees for the fiscal years ended September 30, 2018, 2017, and 2016 were based on the following assumptions: 2018 2017 2016 Risk-free interest rate 2.04% 1.68% – 1.92% 1.43% – 1.66% Expected life (years) 5.15 5.25 5.90 Expected volatility 60% 74% 83% Expected dividends — — — The expected life of options granted is derived using assumed exercise rates based on historical exercise patterns and vesting terms, and represents the period of time that options granted are expected to be outstanding. Expected stock price volatility is based upon implied volatility and other factors, including historical volatility. After assessing all available information on either historical volatility, or implied volatility, or both, the Company concluded that a combination of both historical and implied volatility provides the best estimate of expected volatility. As of September 30, 2018, the Company had $14.7 million of unrecognized compensation expense related to outstanding RSUs, stock options, and ESPP shares expected to be recognized over a weighted-average period of approximately 2.3 years. 2012 Incentive Plan In January 2012, the Company’s board of directors (the “Board”) adopted the Mitek Systems, Inc. 2012 Incentive Plan (the “2012 Plan”), upon the recommendation of the compensation committee of the Board. On March 10, 2017, the Company’s stockholders approved the amendment and restatement of the 2012 Plan. The total number of shares of Common Stock reserved for issuance under the 2012 Plan is 9,500,000 shares plus that number of shares of Common Stock that would otherwise return to the available pool of unissued shares reserved for awards under its 1999 Stock Option Plan, 2000 Stock Option Plan, 2002 Stock Option Plan, 2006 Stock Option Plan, and 2010 Stock Option Plan (collectively, the “Prior Plans”). As of September 30, 2018, (i) stock options to purchase 1,776,798 shares of Common Stock, 2,137,338 RSUs, and 2,042,817 Senior Executive Performance RSUs were outstanding under the 2012 Plan, and 2,745,093 shares of Common Stock were reserved for future grants under the 2012 Plan and (ii) stock options to purchase an aggregate of 1,029,566 shares of Common Stock were outstanding under the Prior Plans. Employee Stock Purchase Plan In January 2018, the Board adopted the Mitek ESPP. On March 7, 2018, the Company’s stockholders approved the ESPP. The total number of shares of Common Stock reserved for issuance thereunder is 1,000,000 shares. As of September 30, 2018, (i) 60,751 shares have been issued under the ESPP and (ii) 939,249 shares of Common Stock were reserved for future purchases under the ESPP. The Company commenced the initial offering period on April 2, 2018. The ESPP enables eligible employees to purchase shares of Common Stock at a discount from the market price through payroll deductions, subject to limitations. Eligible employees may elect to participate in the ESPP only during an open enrollment period. The offering period immediately follows the open enrollment window, at which time ESPP contributions are withheld from the participant's regular paycheck. The ESPP provides for a 15% discount on the market value of the stock at the lower of the grant date price (first day of the offering period) and the purchase date price (last day of the offering period). The Company recognized $0.2 million in stock-based compensation expense related to the ESPP during the year ended September 30, 2018. Director Restricted Stock Unit Plan In January 2011, the Board adopted the Mitek Systems, Inc. Director Restricted Stock Unit Plan, as amended and restated (the “Director Plan”). On March 10, 2017, the Company's stockholders approved an amendment to the Director Plan. The total number of shares of Common Stock reserved for issuance thereunder is 1,500,000 shares. As of September 30, 2018, (i) 442,838 RSUs were outstanding under the Director Plan and (ii) 445,733 shares of Common Stock were reserved for future grants under the Director Plan. Stock Options The following table summarizes stock option activity under the Company’s stock option plans during the fiscal years ended September 30, 2018, 2017, and 2016: Number of Shares Weighted- Average Exercise Price Per Share Weighted- Average Remaining Contractual Term (in Years) Outstanding at September 30, 2015 3,647,705 $ 3.70 7.2 Granted 98,500 $ 4.51 Exercised (661,663) $ 2.67 Canceled (69,168) $ 4.51 Outstanding at September 30, 2016 3,015,374 $ 3.95 6.4 Granted 147,800 $ 7.06 Exercised (235,514) $ 2.92 Canceled (81,794) $ 3.59 Outstanding at September 30, 2017 2,845,866 $ 4.21 5.4 Granted 299,397 $ 8.60 Exercised (250,823) $ 2.96 Canceled (88,076) $ 5.23 Outstanding at September 30, 2018 2,806,364 $ 4.75 4.6 The Company recognized $1.4 million, $1.0 million, and $1.3 million in stock-based compensation expense related to outstanding stock options in the fiscal years ended September 30, 2018, 2017, and 2016, respectively. As of September 30, 2018, the Company had $1.0 million of unrecognized compensation expense related to outstanding stock options expected to be recognized over a weighted-average period of approximately 2.5 years. Aggregate intrinsic value represents the value of the Company’s closing stock price on the last trading day of the fiscal period in excess of the weighted-average exercise price, multiplied by the number of options outstanding and exercisable. The total intrinsic value of options exercised during the fiscal years ended September 30, 2018, 2017, and 2016 was $1.4 million, $1.4 million, and $3.3 million, respectively. The per-share weighted-average fair value of options granted during the fiscal years ended September 30, 2018, 2017, and 2016 was $4.56, $4.28, and $3.29, respectively. The aggregate intrinsic value of options outstanding as of September 30, 2018 and 2017, was $8.7 million and $15.6 million, respectively. Restricted Stock Units The following table summarizes RSU activity in the fiscal years ended September 30, 2018, 2017, and 2016: Number of Shares Weighted- Average Fair Value Per Share Outstanding at September 30, 2015 802,917 $ 4.49 Granted 1,536,000 $ 4.82 Settled (261,621) $ 4.77 Canceled (31,127) $ 4.19 Outstanding at September 30, 2016 2,046,169 $ 4.90 Granted 1,249,224 $ 6.61 Settled (707,174) $ 4.81 Canceled (231,198) $ 4.93 Outstanding at September 30, 2017 2,357,021 $ 5.65 Granted 1,184,906 $ 8.54 Settled (745,197) $ 5.26 Canceled (216,554) $ 7.39 Outstanding at September 30, 2018 2,580,176 $ 6.92 The cost of RSUs is determined using the fair value of the Company’s Common Stock on the award date, and the compensation expense is recognized ratably over the vesting period. The Company recognized $5.9 million, $4.0 million, and $2.7 million in stock-based compensation expense related to outstanding RSUs in the fiscal years ended September 30, 2018, 2017, and 2016, respectively. As of September 30, 2018, the Company had approximately $11.7 million of unrecognized compensation expense related to outstanding RSUs expected to be recognized over a weighted-average period of approximately 2.3 years. Senior Executive Performance RSUs There were 2,042,817 Senior Executive Performance RSUs outstanding as of September 30, 2018. The Company recognized $1.5 million and $0.4 million in stock-based compensation expense related to outstanding Senior Executive Performance RSUs in the years ended September 30, 2018 and 2017, respectively. As of September 30, 2018, the Company had $1.9 million of unrecognized compensation expense related to outstanding RSUs expected to be recognized over a weighted-average period of approximately 2.1 years. Closing Shares On June 17, 2015, the Company completed the acquisition of IDchecker NL B.V., a company incorporated under the laws of The Netherlands (“IDC NL”), and ID Checker, Inc., a California corporation and wholly owned subsidiary of IDC NL (“IDC Inc.” and together with IDC NL, “IDchecker”). In connection with the closing of this acquisition, the Company issued to the Sellers 712,790 shares of Common Stock (the "Closing Shares"). Vesting of these shares is subject to the continued employment of the founders of IDchecker and occurs over a period of 27 months (the “Service Period”) from the date of issuance. The cost of the Closing Shares was determined using the fair value of Common Stock on the award date, and the stock-based compensation is recognized ratably over the vesting period. Stock-based compensation expense related to the Closing Shares is recorded within acquisition-related costs and expenses on the consolidated statements of operations and other comprehensive income (loss). The Company recognized no stock-based compensation expense related to the Closing Shares in the year ended September 30, 2018. The Company recognized $1.2 million in stock-based compensation expense related to the Closing Shares for each of the years ended September 30, 2017 and 2016. Earnout Shares In connection with the acquisition of IDchecker, the Company issued 137,306 shares of Common Stock (the "Earnout Shares") to the Sellers for achievement by IDchecker of certain revenue targets for the nine-month period ended September 30, 2015. Additionally, 81,182 Earnout Shares were earned by the Sellers for achievement by IDchecker of certain revenue targets for the twelve-month period ended September 30, 2016. The Company estimated the fair value of the Earnout Shares using the Monte-Carlo simulation (using the Company’s valuation date stock price, the annual risk-free interest rate, expected volatility, the probability of reaching the performance targets, and a 10 trading day average stock price). In November 2017, a contingency triggered the immediate vesting of all Earnout Shares, resulting in an acceleration of all stock-based compensation related to the earnout shares. Stock-based compensation expense related to the Earnout Shares is recorded within acquisition-related costs and expenses on the consolidated statements of operations and other comprehensive income (loss). The Company recognized $0.4 million, $0.4 million, and $0.3 million in stock-based compensation expense related to the Earnout Shares for the years ended September 30, 2018, 2017, and 2016, respectively. Rights Agreement On October 23, 2018, the Company entered into the Rights Agreement and issued a dividend of one preferred share purchase right (a “Right”) for each share of Common Stock payable on November 2, 2018 to the stockholders of record of such shares on that date. Each Right entitles the registered holder, under certain circumstances, to purchase from the Company one one-thousandth of a share of Series B Junior Preferred Stock, par value $0.001 per share (the “Preferred Shares”), of the Company, at a price of $35.00 per one one-thousandth of a Preferred Share represented by a Right (the “Purchase Price”), subject to adjustment. The description and terms of the Rights are set forth in the Rights Agreement. The Rights are not exercisable until the Distribution Date (as defined in the Rights Agreement). Until a Right is exercised, the holder thereof, as such, will have no rights as a stockholder of the Company, including, without limitation, the right to vote or to receive dividends. At any time prior to the time any Person becomes an Acquiring Person (as defined in the Rights Agreement), the Board may redeem the Rights in whole, but not in part, at a price of $0.0001 per Right (the “Redemption Price”). The redemption of the Rights may be made effective at such time, on such basis and with such conditions as the Board in its sole discretion may establish. Immediately upon any redemption of the Rights, the right to exercise the Rights will terminate and the only right of the holders of Rights will be to receive the Redemption Price. The Rights will expire on the earlier of (i) the close of business on October 22, 2021, (ii) the time at which the Rights are redeemed, (iii) the time at which the Rights are exchanged, and (iv) if the Rights Agreement has not been approved by the stockholders prior to the conclusion of the Company’s 2019 Annual Meeting of Stockholders, the close of business on such date. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES Recent Tax Legislation The Tax Act was enacted on December 22, 2017. The Act includes a number of changes to existing U.S. tax laws that impact the Company, most notably a reduction of the U.S. federal corporate tax rate from a maximum of 35% to a flat 21%, effective January 1, 2018. In conjunction with the tax law changes, the Securities and Exchange Commission staff issued Staff Accounting Bulletin 118 ("SAB 118") to address the application of U.S. GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Tax Act. In these instances, an entity can record provisional amounts in its financial statements for the income tax effects for which a reasonable estimate can be determined. For items for which a reasonable estimate cannot be determined, an entity should continue to apply ASC 740 based on the provisions of the tax laws that were in effect immediately prior to the Tax Act being enacted. In accordance with SAB 118, the Company has determined that the re-measurement of deferred tax assets and liabilities were provisional amounts and reasonable estimates at September 30, 2018. Due to the Company’s fiscal year end, the Company is subject to transitional tax rate rules. Therefore, the blended rate of 24.3% was computed as effective for the fiscal year ended September 30, 2018. Also, as a result of the Tax Act, the Company has remeasured its deferred tax assets based on the rates at which they are expected to reverse in the future, resulting in a reduction in the net deferred tax asset balance of $4.9 million. The decrease in the Company’s tax rate is primarily due to the impact of the Tax Act. Provision for Income Taxes Income (loss) before income taxes for the years ended September 30, 2018, 2017, and 2016 is comprised of the following ( amounts shown in thousands ): 2018 2017 2016 Domestic $ (1,584) $ 4,057 $ 2,732 Foreign (7,157) (886) (774) Total $ (8,741) $ 3,171 $ 1,958 For the years ended September 30, 2018, 2017, and 2016 the income tax benefit (provision) was as follows (amounts shown in thousands): 2018 2017 2016 Federal—current $ (87) $ (127) $ (129) Federal—deferred (4,537) 8,291 — State—current (26) (20) (16) State—deferred 773 2,748 — Foreign—current (270) 29 146 Foreign—deferred 1,081 — — Total $ (3,066) $ 10,921 $ 1 Deferred Income Tax Assets and Liabilities Significant components of the Company’s net deferred tax assets and liabilities as of September 30, 2018 and 2017 are as follows (amounts shown in thousands): 2018 2017 Deferred tax assets: Stock-based compensation $ 3,067 $ 3,671 Net operating loss carryforwards 8,568 3,453 Research credit carryforwards 3,890 3,171 AMT credit carryforwards — 392 Foreign net operating losses — 386 Other, net 354 770 Total deferred assets 15,879 11,843 Deferred tax liabilities: Intangibles (181) (393) Foreign deferred liabilities (8,032) (280) Net deferred tax asset 7,666 11,170 Valuation allowance for net deferred tax assets (472) (105) Net deferred tax asset $ 7,194 $ 11,065 The net change in the total valuation allowance for the fiscal years ended September 30, 2018 and 2017 was an increase of $0.4 million and a decrease of $10.1 million, respectively. In assessing the realizability of deferred tax assets, the Company considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during periods in which those temporary differences become deductible. The Company considers projected future taxable income and planning strategies in making this assessment. Based on the level of historical operating results and the projections for future taxable income, the Company has determined that it is more likely than not that the deferred tax assets may be realized for all deferred tax assets with the exception of the net foreign deferred tax assets at Mitek Systems B.V. As of September 30, 2018, the Company has available net operating loss carryforwards of $27.6 million for federal income tax purposes, which will start to expire in 2032. The net operating losses for state purposes are $30.2 million and will begin to expire in 2028. As of September 30, 2018, the Company has available federal research and development credit carryforwards, net of reserves, of $2.2 million. The federal research and development credits will start to expire in 2022. As of September 30, 2018, the Company has available California research and development credit carryforwards, net of reserves, of $1.9 million, which do not expire. Sections 382 and 383 of the Internal Revenue Code of 1986, as amended (the "IRC") limit the utilization of tax attribute carryforwards that arise prior to certain cumulative changes in a corporation’s ownership. The Company has completed an IRC Section 382/383 analysis through March 31, 2017 and any identified ownership changes had no impact to the utilization of tax attribute carryforwards. Any future ownership changes may have an impact on the utilization of the tax attribute carryforwards. The Company adopted ASU 2016-09 prospectively as of October 1, 2017, resulting in net cumulative-effect adjustment to increase retained earnings by $8.3 million, primarily related to the recognition of the previously unrecognized excess tax benefits using the modified retrospective method. The previously unrecognized excess tax effects were recorded as an increase to deferred income taxes in the consolidated balance sheets. Income Tax Provision Reconciliation The difference between the income tax benefit (provision) and income taxes computed using the U.S. federal income tax rate was as follows for the years ended September 30, 2018, 2017, and 2016 (amounts shown in thousands): 2018 2017 2016 Amount computed using statutory rate $ 2,122 $ (1,078) $ (666) Net change in valuation allowance for net deferred tax assets (367) 10,058 1,889 AMT and other (191) 20 (148) Foreign rate differential 22 (169) (70) Non-deductible items (276) (370) (1,136) State income tax 50 (34) (15) Foreign net operating loss — — 147 Impact of tax reform on deferred taxes (4,901) — — Research and development credits 475 2,494 — Income tax benefit (provision) $ (3,066) $ 10,921 $ 1 Uncertain Tax Positions In accordance with authoritative guidance, the impact of an uncertain income tax position on the income tax return must be recognized at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. The following table reconciles the beginning and ending amount of unrecognized tax benefits for the fiscal years ended September 30, 2018, 2017, and 2016 (amounts shown in thousands): 2018 2017 2016 Gross unrecognized tax benefits at the beginning of the year $ 1,181 $ — $ — Additions from tax positions taken in the current year 140 140 — Additions from tax positions taken in prior years — 1,041 — Reductions from tax positions taken in prior years — — — Tax settlements — — — Gross unrecognized tax benefits at end of the year $ 1,321 $ 1,181 $ — Of the total unrecognized tax benefits at September 30, 2018, $1.3 million will impact the Company's effective tax rate. The Company does not anticipate that there will be a substantial change in unrecognized tax benefits within the next 12 months. The Company's practice is to recognize interest and/or penalties related to income tax matters in income tax expense. As of September 30, 2018, no accrued interest or penalties related to uncertain tax positions are recorded in the consolidated financial statements. The Company is subject to income taxation in the U. S. at the Federal and state levels. All tax years are subject to examination by U.S., California, and other state tax authorities due to the carryforward of unutilized net operating losses and tax credits. The Company is also subject to foreign income taxes in the countries in which it operates. The Company is not currently under examination by any taxing authorities. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Claim Against ICAR On June 11, 2018, a claim was filed before the Juzgado de Primera Instancia number 5 of Barcelona, Spain, the first instance court in the Spanish civil procedure system, against ICAR. The claim, also directed to Mr. Xavier Codó Grasa, former controlling shareholder of ICAR and its current General Manager, was brought by the Spanish company Global Equity & Corporate Consulting, S.L. for the alleged breach by ICAR of a services agreement entered into in the context of the sale of the shares in ICAR to Mitek Holding B.V. ICAR responded to the claim on September 7, 2018 and the court process is ongoing. The amount claimed is €0.8 million (or $0.9 million), plus the interests accrued during the court proceedings. Pursuant and subject to the terms of the sale and purchase agreement concerning the acquisition of the shares in ICAR, Mitek Holding B.V. is to be indemnified in respect of any damages suffered by ICAR and/or Mitek Holding B.V. in respect of this claim. Other Legal Matters In addition to the foregoing, the Company is subject to various claims and legal proceedings arising in the ordinary course of its business. The Company accrues for such liabilities when it is both (i) probable that a loss has occurred and (ii) the amount of the loss can be reasonably estimated in accordance with ASC 450, Contingencies . While any legal proceeding has an element of uncertainty, the Company believes that the disposition of such matters, in the aggregate, will not have a material effect on the Company’s financial condition or results of operations. Employee 401(k) Plan The Company has a 401(k) plan that allows participating employees to contribute a percentage of their salary, subject to Internal Revenue Service annual limits. In 2015, the Company implemented a company match to the plan. The Company's contributions are made in an amount equal to 25% of the first 6% of an employee's designated deferral of their eligible compensation. The Company's total cost related to the 401(k) plan was $123,000, $121,000, and $91,000 for the fiscal years ended September 30, 2018, 2017, and 2016, respectively. Facility Lease The Company’s principal executive offices, as well as its research and development facility, are located in approximately 29,000 square feet of office space in San Diego, California and the term of the lease for the Company’s offices continues through June 30, 2024. The average annual base rent under this lease is approximately $1.0 million per year. In connection with this lease, the Company received tenant improvement allowances totaling approximately $1.0 million. These lease incentives are being amortized as a reduction of rent expense over the term of the lease. As of September 30, 2018, the unamortized balance of the lease incentives was $0.8 million, of which $0.1 million has been included in other current liabilities and $0.7 million has been included in other non-current liabilities. The offices of A2iA are located in Paris, France and New York, New York and the terms of each lease continue through July 31, 2021 and September 30, 2019, respectively, with annual base rent of approximately €0.4 million (or approximately $0.4 million) and approximately $0.3 million per year, respectively. The offices of Mitek Systems B.V. are located in Amsterdam, The Netherlands and the term of such lease continues through December 31, 2022 with annual base rent of approximately €0.2 million (or approximately $0.2 million) per year. The Company has a sales office in London, UK. The term of this lease continues through May 31, 2020. The annual base rent under this lease is approximately £63,000 (or approximately $82,000) per year. The offices of ICAR are located in Barcelona, Spain and the term of such lease continues through May 31, 2023 with annual base rent of approximately €0.1 million (or approximately $0.1 million) per year. The Company believes its existing properties are in good condition and are sufficient and suitable for the conduct of its business. Future annual minimum rental payments payable under the facility and other operating leases are as follows (shown in thousands): Years ended September 30: 2019 $ 2,061 2020 1,509 2021 1,964 2022 1,567 2023 1,363 Thereafter 942 Total $ 9,406 Rent expense for the Company’s operating leases for its facilities for the years ended September 30, 2018, 2017, and 2016 totaled $1.7 million, $0.6 million and $0.3 million, respectively. Revolving Credit Facility On May 3, 2018, the Company and IDchecker, Inc. (together, the “Co-Borrowers”) entered into a Loan and Security Agreement (the “Loan Agreement”) with Silicon Valley Bank (“SVB”). Pursuant to the Loan Agreement, the Company arranged for a $10.0 million secured revolving credit facility (the “Revolver”) with a floating per annum interest rate equal to the greater of the Wall Street Journal prime rate, plus 0.25%, or 4.5%. The Co-Borrowers must maintain, at all times when any amounts are outstanding under the Revolver: (i) minimum unrestricted cash at SVB and unused availability on the Revolver of at least $15.0 million and (ii) Adjusted Quick Ratio (as defined in the Loan Agreement) of 1.75:1.00. The Revolver has a maturity date of May 3, 2019. There were no borrowings outstanding under the Revolver as of September 30, 2018. |
REVENUE AND VENDOR CONCENTRATIO
REVENUE AND VENDOR CONCENTRATIONS | 12 Months Ended |
Sep. 30, 2018 | |
Risks and Uncertainties [Abstract] | |
REVENUE AND VENDOR CONCENTRATIONS | REVENUE AND VENDOR CONCENTRATIONS Revenue Concentration For the year ended September 30, 2018, the Company derived revenue of $20.0 million from two customers, with such customers accounting for 22% and 10%, respectively, of the Company’s total revenue. For year ended September 30, 2017, the Company derived revenue of $10.4 million from one customer, with such customer accounting for 23% of the Company's total revenue. For the year ended September 30, 2016, the Company derived revenue of $6.3 million from one customer, with such customer accounting for 18% of the Company’s total revenue. The corresponding accounts receivable balances of customers from which revenues were in excess of 10% of total revenue were $5.7 million, $1.3 million, and $1.0 million at September 30, 2018, 2017 and 2016, respectively. The Company’s revenue is derived primarily from the sale by the Company to channel partners, including systems integrators and resellers, and end-users of licenses to sell products covered by the Company’s patented technologies. In most cases, the channel partners purchase the license from the Company after they receive an order from an end-user. The channel partners receive orders from various individual end-users; therefore, the sale of a license to a channel partner may represent sales to multiple end-users. End-users can purchase the Company’s products through more than one channel partner. Revenues can fluctuate based on the timing of license renewals by channel partners. When a channel partner purchases or renews a license, the Company receives a license fee in consideration for the grant of a license to sell the Company’s products and there are no future payment obligations related to such agreement; therefore, the license fee the Company receives with respect to a particular license renewal in one period does not have a correlation with revenue in future periods. During the last few years, sales of licenses to one or more channel partners have comprised a significant part of the Company’s revenue. This is attributable to the timing of renewals or purchases of licenses and does not represent a dependence on any single channel partner. The Company believes that it is not dependent upon any single channel partner, even those from which revenues were in excess of 10% of the Company’s total revenue in a specific reporting period, and that the loss or termination of the Company’s relationship with any such channel partner would not have a material adverse effect on the Company’s future operations because either the Company or another channel partner could sell the Company’s products to the end-user that had purchased from the channel partner the Company lost. International sales accounted for approximately 27%, 14%, and 15% of the Company’s total revenue for the years ended September 30, 2018, 2017, and 2016, respectively. Vendor Concentration The Company purchases its integrated software components from multiple third-party software providers at competitive prices. For the years ended September 30, 2018, 2017, and 2016, the Company did not make purchases from any one vendor comprising 10% or more of the Company’s total purchases. The Company has entered into contractual relationships with some of its vendors; however, the Company does not believe it is substantially dependent upon nor exposed to any significant concentration risk related to purchases from any of its vendors, given the availability of alternative sources for its necessary integrated software components. |
QUARTERLY INFORMATION (UNAUDITE
QUARTERLY INFORMATION (UNAUDITED) | 12 Months Ended |
Sep. 30, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
QUARTERLY INFORMATION (UNAUDITED) | QUARTERLY INFORMATION (UNAUDITED) The following table sets forth selected quarterly financial data for 2018, 2017, and 2016 (shown in thousands except per share data): 2018 1 2 3 4 Revenue $ 12,136 $ 14,277 $ 16,109 $ 21,037 Cost of revenue 1,617 1,717 2,678 2,674 Operating expenses 12,831 13,825 16,294 19,729 Operating loss (2,312) (1,265) (2,863) (1,366) Other income (expense), net 190 204 (1,351) 22 Income tax benefit (provision) (3,614) (99) 1,430 (783) Net loss $ (5,736) $ (1,160) $ (2,784) $ (2,127) Net loss per share: Net loss per share—basic $ (0.17) $ (0.03) $ (0.08) $ (0.06) Shares used in calculating net loss per share—basic 34,207 34,976 36,190 37,858 Net loss per share—diluted $ (0.17) $ (0.03) $ (0.08) $ (0.06) Shares used in calculating net loss per share—diluted 34,207 34,976 36,190 37,858 2017 1 2 3 4 Revenue $ 9,269 $ 11,419 $ 11,798 $ 12,904 Cost of revenue 891 830 1,182 1,138 Operating expenses 9,050 9,365 10,132 10,033 Operating income (loss) (672) 1,224 484 1,733 Other income, net 65 67 149 121 Income tax benefit (provision) — (74) (17) 11,012 Net income (loss) $ (607) $ 1,217 $ 616 $ 12,866 Net income (loss) per share: Net income (loss) per share—basic $ (0.02) $ 0.04 $ 0.02 $ 0.38 Shares used in calculating net income (loss) per share—basic 32,377 32,786 33,024 33,522 Net income (loss) per share—diluted $ (0.02) $ 0.03 $ 0.02 $ 0.35 Shares used in calculating net income (loss) per share—diluted 32,377 34,815 35,610 36,251 2016 1 2 3 4 Revenue $ 7,404 $ 8,522 $ 9,105 $ 9,670 Cost of revenue 942 720 793 940 Operating expenses 6,804 7,171 7,618 7,889 Operating income (loss) (342) 631 694 841 Other income, net 36 30 45 23 Income tax benefit (provision) (16) (79) — 96 Net income (loss) $ (322) $ 582 $ 739 $ 960 Net income (loss) per share: Net income (loss) per share—basic $ (0.01) $ 0.02 $ 0.02 $ 0.03 Shares used in calculating net income (loss) per share—basic 31,094 31,326 31,823 32,086 Net income (loss) per share—diluted $ (0.01) $ 0.02 $ 0.02 $ 0.03 Shares used in calculating net income (loss) per share—diluted 31,094 33,134 34,532 34,860 |
NATURE OF OPERATIONS AND SUMM_2
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Operations | Nature of Operations Mitek Systems, Inc. ("Mitek" or the "Company") is a leading innovator of mobile capture and digital identity verification solutions. We are a software development company with expertise in artificial intelligence and machine learning. The Company is currently serving more than 6,100 financial services organizations and leading marketplace and financial technology ("fintech") brands across the globe. The Company's solutions are embedded in native mobile apps and mobile optimized websites to facilitate better mobile user experiences, fraud detection and reduction, and compliant transactions. Mitek's Mobile Deposit® solution is used today by millions of consumers in the United States ("U.S.") and Canada for mobile check deposit. Mitek’s Mobile Verify™ is an important technology used to verify people’s identities at the point of onboarding via web or mobile device. Scanning an identity document enables an enterprise to identify the person with whom they are conducting business, comply with growing governmental Know Your Customer ("KYC") and Anti-Money Laundering ("AML") regulatory requirements, and to improve the overall customer experience for digital onboarding. To be sure the person submitting the identity document is who they say they are, Mitek's Mobile Verify Face Comparison provides an incremental layer of verification and compares the face on the identity document with the selfie photo of the user. Mitek's Mobile Verify Face Comparison technology uses advanced liveness detection so it cannot be spoofed. The identification capture process provided by Mitek can also provide prefill of much of the data obtained from the identity document into an application, requiring far fewer key strokes, reducing keying errors, and improving both operational efficiency and the customer experience. Today, the financial services verticals (banks, credit unions, lenders, payments processors, card issuers, fintech companies, etc.) represent the greatest percentage of use of The Company's solutions, but there is accelerated adoption by marketplaces, sharing economy, telecommunications, healthcare, travel, and retail sectors. Similarly, websites that must verify the customer’s age (or other consumer information) prior to selling goods can do so by verifying identity documents. Mitek uses machine learning to constantly improve the product performance of Mobile Verify™ and applies artificial intelligence to increase automation and speed of approvals of identification documents. The core of the Company's user experience is Mitek MiSnap™, a touch-free automated capture technology, which can be incorporated across product lines. It provides a simple and superior user-experience, making transactions on mobile devices fast, accurate, and easy for the consumer while helping organizations drive revenue from the increasingly popular mobile channel. Mobile Fill™, Mitek's mobile identity capture solution, enables the camera to serve as a keyboard. Using Mobile Fill™, consumers can quickly prefill any form with personal data by simply snapping a picture of their driver's license, credit card, or other similar identity document. Mobile Deposit® is the category leading product that allows individuals and businesses to remotely deposit checks using their camera-equipped smartphone or tablet. The Company's Mobile Deposit® solution has now processed over two billion check deposits. Mitek began selling Mobile Deposit® in the second fiscal quarter of 2008, and received our first patent issued for this product in August 2010. As of September 30, 2018, the Company has been granted 49 patents and it has an additional 21 patent applications pending. CheckReader ™ , which the Company acquired through the acquisition of A2iA (as defined below), enables financial institutions to automatically extract data from a check image received across all deposit channels – branch, ATM, RDC, and mobile. Through the automatic recognition of all fields on checks, whether handwritten or machine print, CheckReader ™ speeds the time to deposit for banks and customers and reduces costs formerly incurred before images could be exchanged. The Company markets and sells its products and services worldwide through internal, direct sales teams located in the U.S., Europe, and Latin America as well as through channel partners. The Company's partner sales strategy includes channel partners who are financial services technology providers and identity verification providers. These partners integrate the Company's products into their solutions to meet the needs of their customers. |
Basis of Presentation | Basis of Presentation The financial statements are prepared under the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 105-10, Generally Accepted Accounting Principles , in accordance with accounting principles generally accepted in the U.S. (“GAAP”). |
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. |
Foreign Currency | Foreign CurrencyThe Company has foreign subsidiaries that operate and sell products and services in various countries and jurisdictions around the world. As a result, the Company is exposed to foreign currency exchange risks. For those subsidiaries whose functional currency is not the U.S. dollar, assets and liabilities are translated into U.S. dollars equivalents at the exchange rate in effect on the balance sheet date and revenues and expenses are translated into U.S. dollars using the average exchange rate over the period. Resulting currency translation adjustments are recorded in accumulated other comprehensive income (loss) in the consolidated balance sheet. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses, deferred taxes, and related disclosure of contingent assets and liabilities. On an ongoing basis, management reviews its estimates based upon currently available information. Actual results could differ materially from those estimates. These estimates include, but are not limited to, assessing the collectability of accounts receivable, estimation of the value of stock-based compensation awards, fair value of assets and liabilities acquired, impairment of goodwill and intangible assets, useful lives of intangible assets, vendor specific objective evidence (“VSOE”) of fair value related to revenue recognition, and income taxes. |
Revenue Recognition | Revenue Recognition Revenue from sales of software licenses sold through direct and indirect channels is recognized upon shipment of the related product, if the requirements of FASB ASC Topic 985-605, Software Revenue Recognition (“ASC 985-605”) are met, including evidence of an arrangement, delivery, fixed or determinable fee, collectability, and VSOE of the fair value of the undelivered element. If the requirements of ASC 985-605 are not met at the date of shipment, revenue is not recognized until such elements are known or resolved. Revenue from customer support services, or maintenance revenue, includes post-contract support and the rights to unspecified upgrades and enhancements. VSOE of fair value for customer support services is determined by reference to the price the customer pays for such element when sold separately; that is, the renewal rate offered to customers. In those instances when objective and reliable evidence of fair value exists for the undelivered items but not for the delivered items, the residual method is used to allocate the arrangement consideration. Under the residual method, the amount of arrangement consideration allocated to the delivered items equals the total arrangement consideration less the aggregate fair value of the undelivered items. Revenue from post-contract customer support is recognized ratably over the term of the contract. Certain customers have agreements that provide for usage fees above fixed minimums. Usage fees above fixed minimums are recognized as revenue when such amounts are reasonably estimable and billable. Revenue from professional services is recognized when such services are delivered. When a software sales arrangement requires professional services related to significant production, modification, or customization of software, or when a customer considers professional services essential to the functionality of the software product, revenue is recognized based on predetermined milestone objectives required to complete the project, as those milestone objectives are deemed to be substantive in relation to the work performed. Any expected losses on contracts in progress are recorded in the period in which the losses become probable and reasonably estimable. The Company provides hosting services that give customers access to software that resides on its servers. The Company’s model typically includes an up-front fee and a periodic commitment from the customer that commences upon completion of the implementation through the remainder of the customer life. The up-front fee is the initial setup fee, or the implementation fee. The periodic commitment includes, but is not limited to, a fixed periodic fee or a transactional fee based on system usage that exceeds committed minimums. If the up-front fee does not have standalone value, revenue is deferred until the date the customer commences use of the Company’s services, at which point the up-front fees are recognized ratably over the life of the customer arrangement. The Company does not view the signing of the contract or the provision of initial setup services as discrete earnings events that have stand-alone value. As a result of the acquisition of ICAR Vision Systems, S.L. ("ICAR"), the Company also generates revenues from the sale of hardware scanner boxes and servers. Revenue allocated to the delivered hardware and the related essential software is recognized at the time of sale provided the conditions for recognition of revenue have been met. Revenue allocated to post contract support is deferred and recognized on a straight-line basis over the estimated term of the support period. |
Net Income (Loss) Per Share | Net Income (Loss) Per Share The Company calculates net income (loss) per share in accordance with FASB ASC Topic 260, Earnings per Share . Basic net income (loss) per share is based on the weighted-average number of common shares outstanding during the period. Diluted net income (loss) per share also gives effect to all potentially dilutive securities outstanding during the period, such as restricted stock units (“RSUs”), stock options, and Employee Stock Purchase Plan ("ESPP") shares, if dilutive. In a period with a net loss position, potentially dilutive securities are not included in the computation of diluted net loss because to do so would be antidilutive, and the number of shares used to calculate basic and diluted net loss is the same. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents are defined as highly liquid financial instruments with original maturities of three months or less. The Company's cash and cash equivalents are composed of interest and non-interest-bearing deposits and money market funds. |
Investments | Investments Investments consist of corporate notes and bonds, commercial paper, and U.S. Treasury securities. The Company classifies investments as available-for-sale at the time of purchase and reevaluates such classification as of each balance sheet date. All investments are recorded at estimated fair value. Unrealized gains and losses for available-for-sale securities are included in accumulated other comprehensive income (loss), a component of stockholders’ equity. The Company evaluates its investments to assess whether those with unrealized loss positions are other-than-temporarily impaired. Impairments are considered to be other-than-temporary if they are related to deterioration in credit risk or if it is likely that the Company will sell the securities before the recovery of its cost basis. Realized gains and losses and declines in value judged to be other-than-temporary are determined based on the specific identification method and are reported in other income (expense), net in the consolidated statements of operations and other comprehensive income (loss). No other-than-temporary impairment charges were recognized in the fiscal years ended September 30, 2018, 2017, and 2016. |
Fair Value Measurements | Fair Value Measurements The carrying amounts of cash equivalents, investments, accounts receivable, accounts payable, and other accrued liabilities are considered representative of their respective fair values because of the short-term nature of those instruments. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful AccountsTrade accounts receivable are recorded at the net invoice value and are not interest bearing. The Company considers receivables past due based on the contractual payment terms. Allowances for doubtful accounts are established based on various factors including credit profiles of the Company’s customers, contractual terms and conditions, historical payments, and current economic trends. The Company reviews its allowances by assessing individual accounts receivable over a specific aging and amount. Accounts receivable are written off on a case-by-case basis, net of any amounts that may be collected. |
Deferred Maintenance Fees | Deferred Maintenance Fees Deferred maintenance fees consist of capitalized costs associated with software maintenance fees paid to vendors who supply licenses and maintenance for software embedded in the Company’s products that it sells to customers. These software maintenance fees, which are included in prepaid expenses on the consolidated balance sheets, are typically billed annually to the Company and are amortized to cost of revenue-maintenance and professional services in the consolidated statements of operations and other comprehensive income (loss) over the maintenance period, which is typically one year. |
Property and Equipment | Property and EquipmentProperty and equipment are carried at cost. |
Long-Lived Assets | Long-Lived AssetsThe Company evaluates the carrying value of long-lived assets, including license agreements and other intangible assets, when events and circumstances indicate that these assets may be impaired or in order to determine whether any revision to the related amortization periods should be made. This evaluation is based on management’s projections of the undiscounted future cash flows associated with each product or asset. If management’s evaluation indicates that the carrying values of these intangible assets were impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. |
Capitalized Software Development Costs | Capitalized Software Development Costs Costs incurred for the development of software that will be sold, leased, or otherwise marketed are capitalized when technological feasibility has been established. Software development costs consist primarily of compensation of development personnel and related overhead incurred to develop new products and upgrade and enhance the Company’s current products, as well as fees paid to outside consultants. Capitalization of software development costs ceases and amortization of capitalized software development costs commences when the products are available for general release. For the fiscal years ended September 30, 2018 and 2017, no software development costs were capitalized because the time period and cost incurred between technological feasibility and general release for all software product releases were not material. The Company had no amortization expense from capitalized software costs during the years ended September 30, 2018, 2017, or 2016. |
Goodwill and Purchased Intangible Assets | Goodwill and Purchased Intangible Assets The Company’s goodwill resulted from prior acquisitions. Goodwill and intangible assets with indefinite useful lives are not amortized, but are tested for impairment at least annually or as circumstances indicate that their value may no longer be recoverable. In accordance with ASC Topic 350, Intangibles—Goodwill and Other (“ASC Topic 350”), the Company reviews its goodwill and indefinite-lived intangible asset for impairment at least annually in its fiscal fourth quarter and more frequently if events or changes in circumstances occur that indicate a potential reduction in the fair value of its reporting unit and/or its indefinite-lived intangible asset below their respective carrying values. Examples of such events or circumstances include: a significant adverse change in legal factors or in the business climate, a significant decline in the Company’s stock price, a significant decline in the Company’s projected revenue or cash flows, an adverse action or assessment by a regulator, unanticipated competition, a loss of key personnel, or the presence of other indicators that would indicate a reduction in the fair value of a reporting unit. The Company’s goodwill is considered to be impaired if management determines that the carrying value of the reporting unit to which the goodwill has been assigned exceeds management’s estimate of its fair value. Based on the guidance provided by ASC Topic 350 and ASC Topic 280, Segment Reporting (“ASC Topic 280”), management has determined that the Company operates in one segment and consists of one reporting unit given the similarities in economic characteristics between its operations and the common nature of its products, services and customers. Because the Company has only one reporting unit, and because the Company is publicly traded, the Company determines the fair value of the reporting unit based on its market capitalization as it believe this represents the best evidence of fair value. In the fourth quarter of fiscal 2018, management completed its annual goodwill impairment test and concluded that the Company’s goodwill was not impaired. The Company’s conclusion that goodwill was not impaired was based on a comparison of its net assets to its market capitalization. Because the Company determines the fair value of its reporting unit based on its market capitalization, the Company’s future reviews of goodwill for impairment may be impacted by changes in the price of its common stock, par value $0.001 per share ("Common Stock"). For example, a significant decline in the price of the Company’s Common Stock may cause the fair value of its goodwill to fall below its carrying value. Therefore, the Company cannot provide assurance that when it completes its future reviews of goodwill for impairment, a material impairment charge will not be recorded. |
Deferred Revenue | Deferred Revenue Deferred revenues represent advance payments or billings for software licenses, professional services, and maintenance billed in advance of the time revenue is recognized. Deferred maintenance revenue represents customer billings, paid up front, generally annually at the beginning of each maintenance period, with revenue recognized ratably over such period. For certain other licensing arrangements, revenue attributable to undelivered elements, including post-contract customer support which typically includes telephone support and the right to receive unspecified upgrades and enhancements of software on a when-and-if-available basis, is based upon the sales price of those elements when sold separately and is recognized ratably on a straight-line basis over the term of the arrangement. |
Guarantees | Guarantees In the ordinary course of business, the Company is not subject to potential obligations under guarantees that fall within the scope of FASB ASC Topic 460, Guarantees (“ASC 460”), except for standard indemnification and warranty provisions that are contained within many of the Company’s customer license and service agreements and certain supplier agreements, and give rise only to the disclosure requirements prescribed by ASC 460. Indemnification and warranty provisions contained within the Company’s customer license and service agreements and certain supplier agreements are generally consistent with those prevalent in the Company’s industry. The Company has not historically incurred significant obligations under customer indemnification or warranty provisions and does not expect to incur significant obligations in the future. Accordingly, the Company does not maintain accruals for potential customer indemnification or warranty-related obligations. |
Loss Contingencies | Loss Contingencies The Company records its best estimates of a loss contingency when it is considered probable and the amount can be reasonably estimated. When a range of loss can be reasonably estimated with no best estimate in the range, the Company records the minimum estimated liability related to the claim. As additional information becomes available, the Company assesses the potential liability related to the Company’s pending loss contingency and revises its estimates. The Company discloses contingencies if there is at least a reasonable possibility that a material loss or a material additional loss may have been incurred. The Company’s legal costs are expensed as incurred. |
Other Borrowings | Other BorrowingsThe Company has certain loan agreements with Spanish government agencies which were assumed when the Company acquired ICAR. These agreements are have repayment periods of five |
Income Taxes | Income Taxes The Company accounts for income taxes in accordance with FASB ASC Topic 740, Income Taxes (“ASC 740”). Deferred tax assets and liabilities arise from temporary differences between the tax bases of assets and liabilities and their reported amounts in the financial statements that will result in taxable or deductible amounts in future years. Management evaluates the available evidence about future taxable income and other possible sources of realization of deferred tax assets. The valuation allowance reduces deferred tax assets to an amount that represents management’s best estimate of the amount of such deferred tax assets that more likely than not will be realized. See Note 6 of the consolidated financial statements for additional details. The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the tax authorities, based on the technical merits of the position. The tax benefit is measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. The Company recognizes interest and penalties related to income tax matters in income tax expense. See Note 6 of the consolidated financial statements for additional details. The Tax Cuts and Jobs Act of 2017 (the "Tax Act") significantly changes existing U.S. tax law and includes numerous provisions that affect the Company. See Note 6 of the consolidated financial statements for further discussion. |
Stock-Based Compensation | Stock-Based Compensation The Company issues RSUs, stock options, and Senior Executive Long-Term Incentive Restricted Stock Units (“Senior Executive Performance RSUs”) as awards to its employees. Additionally, eligible employees may participate in the Company’s ESPP. Employee stock awards are measured at fair value on the date of grant and expense is recognized using the straight-line single-option method in accordance with FASB ASC Topic 718, Compensation—Stock Compensation (“ASC 718”). Forfeitures are recorded as they occur. The Company assigns fair value to RSUs based on the closing stock price of its Common Stock on the date of grant. The Company estimates the fair value of stock options and ESPP shares using the Black-Scholes option pricing model. The Black-Scholes option pricing model requires subjective assumptions, including future stock price volatility and expected time to exercise, which greatly affect the calculated values. The expected term of options granted is derived from historical data on employee exercises and post-vesting employment termination behavior. The risk-free rate selected to value any particular grant is based on the U.S. Treasury rate that corresponds to the expected life of the grant effective as of the date of the grant. The expected volatility is based on the historical volatility of the Company’s stock price. These factors could change in the future, affecting the determination of stock-based compensation expense in future periods. |
Advertising Expense | Advertising ExpenseAdvertising costs are expensed as incurred |
Research and Development | Research and Development Research and development costs are expensed in the period incurred. |
Leases | Leases Leases are reviewed and classified as capital or operating at their inception. For leases that contain rent escalations, the Company records the total rent payable on a straight-line basis over the term of the lease. The difference between rent payments and straight-line rent expense is recorded as deferred rent. |
Segment Reporting | Segment Reporting FASB ASC Topic 280, Segment Reporting , requires the use of a management approach in identifying segments of an enterprise. During the fiscal year ended September 30, 2018, management determined that the Company has only one operating segment: the development, sale, and service of proprietary software solutions related to mobile imaging. |
Comprehensive Income (Loss) | Comprehensive income (loss) consists of net income (loss), unrealized gains and losses on available-for-sale securities, and foreign currency translation adjustments. |
Recently Adopted and Issued Accounting Pronouncements | Recently Adopted Accounting Pronouncements In March 2016, the FASB issued Accounting Standards Update (“ASU”) No. 2016-09, Compensation—Stock Compensation (Topic 718) (“ASU 2016-09”) which simplified certain aspects of the accounting for share-based payment transactions, including income taxes, classification of awards and classification in the statement of cash flows. The new standard requires excess tax benefits and tax deficiencies to be recorded in the consolidated statements of operations and other comprehensive income (loss) as a component of the provision for income taxes when stock awards vest or are settled. In addition, it eliminates the requirement to reclassify cash flows related to excess tax benefits from operating activities to financing activities on the consolidated statements of cash flows. The standard also provides an accounting policy election to account for forfeitures as they occur and clarifies that all cash payments made to tax authorities on an employee’s behalf for withheld shares should be presented as a financing activity on the cash flows statement. The Company adopted ASU 2016-09 prospectively as of October 1, 2017, resulting in net cumulative-effect adjustment to increase retained earnings by $8.3 million, primarily related to the recognition of the previously unrecognized excess tax benefits using the modified retrospective method. The previously unrecognized excess tax effect was recorded as an increase to deferred income taxes in the consolidated balance sheet. Recently Issued Accounting Pronouncements In August 2018, the FASB issued ASU No. 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (ASC 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract ("ASU 2018-15"), which requires hosting arrangements that are service contracts to follow the guidance for internal-use software to determine which implementation costs can be capitalized. ASU 2018-15 is effective either prospectively or retrospectively for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years, with early adoption permitted. The Company does not expect the adoption of ASU 2018-15 to have a material impact on its consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement , to eliminate, add, and modify certain disclosure requirements for fair value measurements. Entities will no longer be required to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, but public companies will be required to disclose the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements. The guidance is effective for annual and interim periods beginning after December 15, 2019, but entities are permitted to early adopt either the entire standard or only the provisions that eliminate or modify the requirements. The Company is currently evaluating how to apply the new guidance. In February 2018, the FASB issued ASU No. 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (“ASU 2018-02”). Under previously existing GAAP, the effects of changes in tax rates and laws on deferred tax balances are recorded as a component of income tax expense in the period in which the law was enacted. When deferred tax balances related to items originally recorded in accumulated other comprehensive income are adjusted, certain tax effects become stranded in accumulated other comprehensive income. The amendments in ASU 2018-02 allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Act. The amendments in this ASU also require certain disclosures about stranded tax effects. The guidance is required for fiscal years beginning after December 15, 2018 (our fiscal year 2020), and interim periods within those fiscal years. Early adoption in any period is permitted. The Company is currently evaluating the effect that ASU No. 2018-02 will have on its financial statements and related disclosures. See Note 6 to the consolidated financial statements for additional information on the effects of the Tax Act on our financial position and result of operations, including provisional transitional adjustments that were recorded in the year ended September 30, 2018 related to the Tax Act. In May 2017, the FASB issued ASU No. 2017-09, Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting ("ASU 2017-09"), which provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. ASU 2017-09 requires entities to account for the effects of a modification unless the fair value, vesting conditions, and classification of the modified award are all the same as the original award immediately before the original award is modified. ASU 2017-09 is effective for interim and annual reporting periods beginning after December 15, 2017 with early adoption permitted. The Company does not expect the adoption of ASU 2017-09 to have a material impact on its consolidated financial statements. In January 2017, the FASB issued ASU No. 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment (“ASU 2017-04”), which eliminates Step 2 of the goodwill impairment test that had required a hypothetical purchase price allocation. Rather, entities should apply the same impairment assessment to all reporting units and recognize an impairment loss for the amount by which a reporting unit's carrying amount exceeds its fair value, without exceeding the total amount of goodwill allocated to that reporting unit. Entities will continue to have the option to perform a qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. ASU 2017-04 will be effective prospectively for annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2019, or those beginning after January 1, 2017 if adopted early. The Company does not expect the adoption of ASU 2017-04 to have a material impact on its consolidated financial statements. In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business (“ASU 2017-01”), which clarifies the definition of a business with the objective of adding guidance and providing a more robust framework to assist reporting organizations with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. For public entities, ASU 2017-01 is effective prospectively for fiscal years, including interim periods within those fiscal years, beginning after December 15, 2017, with early adoption permitted for transactions occurring before the issuance or effective date of the standard for which financial statements have not yet been issued. The Company does not expect the adoption of ASU 2017-01 to have a material impact on its consolidated financial statements. In October 2016, the FASB issued ASU No. 2016-16, Intra-Entity Transfers of Assets Other Than Inventory (Topic 740) (“ASU 2016-16”), which requires entities to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. ASU 2016-16 is effective for interim and annual reporting periods beginning after December 15, 2017 with early adoption permitted. The Company is currently evaluating the impact ASU 2016-16 will have on its consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), which requires entities to use a Current Expected Credit Loss model which is a new impairment model based on expected losses rather than incurred losses. Under this model, an entity would recognize an impairment allowance equal to its current estimate of all contractual cash flows that the entity does not expect to collect from financial assets measured at amortized cost. The entity's estimate would consider relevant information about past events, current conditions and reasonable and supportable forecasts. ASU 2016-13 is effective for interim and annual reporting periods beginning after December 31, 2019 with early adoption permitted for annual reporting periods beginning after December 31, 2018. The Company is currently evaluating the impact ASU 2016-13 will have on its consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”), which modified lease accounting for both lessees and lessors to increase transparency and comparability by recognizing lease assets and lease liabilities by lessees for those leases classified as operating leases under previous accounting standards and disclosing key information about leasing arrangements. ASU 2016-02 will be effective for the Company beginning in its first quarter of fiscal 2020 and early adoption is permitted. In the original guidance the modified retrospective application was required, however, in July 2018 the FASB issued ASU No. 2018-11, Leases (Topic 842): Targeted Improvements , which permits entities to use another transition method. Under this optional transition method, the Company would recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The Company is currently evaluating the timing of its adoption and the impact of adopting the new lease standard on its consolidated financial statements. In May 2014, the FASB issued guidance codified in FASB ASC Topic 606, Revenue Recognition—Revenue from Contracts with Customers (“ASC Topic 606”), which amends the guidance in former ASC 605, Revenue Recognition. The Company has performed a review of the requirements of the new revenue standard and related ASUs and is monitoring the activity of the FASB and the transition resource group as it relates to specific interpretive guidance. The Company is reviewing customer contracts and is in the process of applying the new revenue standard to its key identified revenue streams included within either software revenue or Software as a Service (“SaaS”), maintenance, and consulting revenue and is comparing the results to its current accounting practices. This accounting standard update will be effective for the Company beginning in the first quarter of fiscal 2019. Entities have the option of adopting this new guidance using either a full retrospective or a modified approach with the cumulative effect of applying the guidance recognized at the date of initial application. The Company currently plans to adopt this accounting standard update using the modified retrospective approach, which will result in a cumulative effect adjustment to retained earnings as of October 1, 2018. Under this method, the Company would not restate the prior consolidated financial statements presented. However, the Company will be required to provide additional disclosures in fiscal 2019 related to the amount by which each relevant fiscal 2019 financial statement line item is affected by adoption of the new standard, and an explanation of the reasons for significant changes. The Company is continuing to assess the impact of adopting ASC Topic 606 on the consolidated financial statements and believes the new standard will impact the following policies and disclosures: • Timing of revenue recognition of license revenue on term licenses and transactional revenue on guaranteed minimum fees related to on-premises software products. Under the new standard s, the Company expects to recognize revenue when control of the license is transferred to the customer, rather than at the date payments become due and payable or ratably over the term of the contract required under the current standard; and • Accounting for commissions under the new standard will result in the deferral of incremental commission costs for obtaining contracts. The Company expects a cumulative-effect adjustment to increase retained earnings by $1.2 million to $2.0 million, or $0.8 million to $1.4 million net of income tax, on October 1, 2018, primarily related to software that has been delivered but no revenue was previously recognized due to extended payment terms. The Company does not currently expect ASC Topic 606 to have a significant effect on the timing of revenue recognition for hardware or SaaS, maintenance, and consulting revenue. No other new accounting pronouncement issued or effective during the year ended September 30, 2018 had, or is expected to have, a material impact on the Company’s consolidated financial statements. |
NATURE OF OPERATIONS AND SUMM_3
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Potentially Dilutive Common Shares Excluded from Net Income (Loss) per Share Calculation | For the fiscal years ended September 30, 2018, 2017 and 2016, the following potentially dilutive common shares were excluded from the net income (loss) per share calculation, as they would have been antidilutive (amounts in thousands) : 2018 2017 2016 Stock options 2,806 569 1,259 RSUs 2,580 83 624 ESPP common stock equivalents 71 — — IDchecker closing shares — — 349 IDchecker earnout shares — 24 — Total potentially dilutive common shares outstanding 5,457 676 2,232 |
Computation of Basic and Diluted Net Income (Loss) Per Share | The computation of basic and diluted net income (loss) per share for the fiscal years ended September 30, 2018, 2017, and 2016 is as follows (amounts in thousands, except per share data): 2018 2017 2016 Net income (loss) $ (11,807) $ 14,092 $ 1,959 Weighted-average shares outstanding—basic 35,811 33,083 31,587 Common stock equivalents — 2,454 2,232 Weighted-average shares outstanding—diluted 35,811 35,537 33,819 Net income (loss) per share: Basic $ (0.33) $ 0.43 $ 0.06 Diluted $ (0.33) $ 0.40 $ 0.06 |
Summary of Property and Equipment | The following is a summary of property and equipment as of September 30, 2018 and 2017 (amounts shown in thousands): 2018 2017 Property and equipment—at cost: Leasehold improvements $ 3,825 $ 1,128 Equipment 2,604 1,801 Capitalized internal-use software development costs 916 — Furniture and fixtures 425 257 7,770 3,186 Less: accumulated depreciation and amortization (3,105) (2,573) Total property and equipment, net $ 4,665 $ 613 |
BUSINESS COMBINATIONS (Tables)
BUSINESS COMBINATIONS (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Business Combinations [Abstract] | |
Schedule of Estimated Fair Values of Assets acquired and Liabilities Assumed | The following table summarizes the estimated fair values of the assets acquired and liabilities assumed during the year ended September 30, 2018 ( amounts shown in thousands ): A2iA ICAR Total Current assets $ 3,929 $ 2,036 $ 5,965 Property, plant, and equipment 307 83 390 Intangible assets 28,610 6,407 35,017 Goodwill 24,867 6,936 31,803 Other non-current assets 1,177 87 1,264 Current liabilities (2,564) (1,652) (4,216) Deferred income tax liabilities (7,503) (1,602) (9,105) Other non-current liabilities (7) (828) (835) Net assets acquired $ 48,816 $ 11,467 $ 60,283 |
Schedule of Estimated Useful Lives of Assets Acquired | The following table summarizes the estimated fair values and estimated useful lives of intangible assets with definite lives acquired during the year ended September 30, 2018 ( amounts shown in thousands, except for years ): Amortization Period Amount assigned A2iA Completed technologies 7.0 years $ 13,015 Customer relationships 5.0 years 15,360 Trade names 5.0 years 235 Total intangible assets acquired from A2iA $ 28,610 ICAR Completed technologies 5.0 years $ 4,956 Customer relationships 2.0 years 1,298 Trade names 3.0 years 153 Total intangible assets acquired from ICAR $ 6,407 |
Schedule of Pro Forma Information | The following table summarizes the Company’s unaudited pro forma financial information is presented as if the acquisitions occurred on October 1, 2016 ( amounts shown in thousands ): For the years ended September 30, 2018 2017 Pro forma revenue $ 78,130 $ 60,802 Pro forma net income (loss) $ (12,268) $ 6,855 |
INVESTMENTS (Tables)
INVESTMENTS (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Gain (Loss) on Securities [Line Items] | |
Summary of Investments by Type of Security | The following tables summarize investments by type of security as of September 30, 2018 and 2017, respectively (amounts shown in thousands): September 30, 2018: Cost Gross Unrealized Gains Gross Unrealized Losses Fair Market Value Available-for-sale securities: U.S. Treasury, short-term $ 3,693 $ — $ (10) $ 3,683 Corporate debt securities, short-term 4,779 — (14) 4,765 Total $ 8,472 $ — $ (24) $ 8,448 September 30, 2017: Cost Gross Unrealized Gains Gross Unrealized Losses Fair Market Value Available-for-sale securities: U.S. Treasury, short-term $ 3,897 $ — $ (3) $ 3,894 Corporate debt securities, short-term 26,393 — (8) 26,385 Corporate debt securities, long-term 3,785 — (5) 3,780 Total $ 34,075 $ — $ (16) $ 34,059 |
Summary of Fair Value of Investments Measured on Recurring Basis | The following tables represent the fair value hierarchy of the Company’s investments and acquisition-related contingent consideration as of September 30, 2018 and 2017 (amounts shown in thousands): September 30, 2018: Balance Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Short-term investments: U.S. Treasury $ 3,683 $ 3,683 $ — $ — Corporate debt securities Financial 2,847 — 2,847 — Industrial 1,918 — 1,918 — Total assets at fair value $ 8,448 $ 3,683 $ 4,765 $ — Liabilities: Acquisition-related contingent consideration 3,051 — — 3,051 Total liabilities at fair value $ 3,051 $ — $ — $ 3,051 September 30, 2017: Balance Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Short-term investments: U.S. Treasury $ 3,894 $ 3,894 $ — $ — Corporate debt securities Financial 3,041 — 3,041 — Industrial 9,503 — 9,503 — Commercial paper Financial 10,850 — 10,850 — Industrial 2,991 — 2,991 — Total short-term investments at fair value 30,279 3,894 26,385 — Long-term investments: Corporate debt securities Financial 1,858 — 1,858 — Industrial 1,922 — 1,922 — Total assets at fair value $ 34,059 $ 3,894 $ 30,165 $ — Liabilities: Acquisition-related contingent consideration 354 — — 354 Total liabilities at fair value $ 354 $ — $ — $ 354 |
Summary of Acquisition-related Contingent Consideration Measured at Fair Value | The following table includes a summary of the contingent consideration measured at fair value using significant unobservable inputs (Level 3) during the year ended September 30, 2018 (amounts shown in thousands): Balance at September 30, 2017 $ 354 Issuance of contingent consideration 2,867 Expenses recorded due to changes in fair value 2,105 Payment of contingent consideration (1,489) Issuance of common stock (710) Foreign currency effect on contingent consideration (76) Balance at September 30, 2018 $ 3,051 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The following table summarizes changes in the balance of goodwill during the year ended September 30, 2018 ( amounts shown in thousands ): Balance at September 30, 2017 $ 3,014 Acquisition of ICAR 6,936 Acquisition of A2iA 24,867 Foreign currency effect on goodwill (410) Balance at September 30, 2018 $ 34,407 |
Schedule of Intangible Assets | Intangible assets as of September 30, 2018 and 2017 are summarized as follows (amounts shown in thousands, except for years): September 30, 2018: Weighted Average Amortization Period Cost Accumulated Amortization Net Completed technologies 6.4 years $ 20,341 $ 3,070 $ 17,271 Customer relationships 4.8 years 17,628 2,351 15,277 Trade names 4.5 years 618 219 399 Total intangible assets $ 38,587 $ 5,640 $ 32,947 September 30, 2017: Weighted Average Amortization Period Cost Accumulated Amortization Net Completed technologies 6.0 years $ 2,370 $ 833 $ 1,537 Customer relationships 6.0 years 970 341 629 Trade names 5.0 years 230 99 131 Total intangible assets $ 3,570 $ 1,273 $ 2,297 |
Schedule of Estimated Future Amortization Expense | The estimated future amortization expense related to intangible assets for each of the five succeeding fiscal years is expected to be as follows (amounts shown in thousands): Estimated Future Amortization Expense 2019 $ 7,219 2020 6,594 2021 6,318 2022 5,909 2023 3,879 Thereafter 3,028 Total $ 32,947 |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Equity [Abstract] | |
Stock-Based Compensation Expense Related to Stock Options and RSUs | The following table summarizes stock-based compensation expense related to RSUs, stock options, and ESPP shares for the fiscal years ended September 30, 2018, 2017, and 2016, which were allocated as follows (amounts shown in thousands): 2018 2017 2016 Cost of revenue $ 78 $ 52 $ 39 Selling and marketing 2,656 1,577 1,099 Research and development 1,801 1,028 660 General and administrative 4,415 2,821 2,281 Stock-based compensation expense included in expenses $ 8,950 $ 5,478 $ 4,079 |
Fair Value Calculations for Stock-Based Compensation Awards | The fair value calculations for stock-based compensation awards to employees for the fiscal years ended September 30, 2018, 2017, and 2016 were based on the following assumptions: 2018 2017 2016 Risk-free interest rate 2.04% 1.68% – 1.92% 1.43% – 1.66% Expected life (years) 5.15 5.25 5.90 Expected volatility 60% 74% 83% Expected dividends — — — |
Stock Option Activity | The following table summarizes stock option activity under the Company’s stock option plans during the fiscal years ended September 30, 2018, 2017, and 2016: Number of Shares Weighted- Average Exercise Price Per Share Weighted- Average Remaining Contractual Term (in Years) Outstanding at September 30, 2015 3,647,705 $ 3.70 7.2 Granted 98,500 $ 4.51 Exercised (661,663) $ 2.67 Canceled (69,168) $ 4.51 Outstanding at September 30, 2016 3,015,374 $ 3.95 6.4 Granted 147,800 $ 7.06 Exercised (235,514) $ 2.92 Canceled (81,794) $ 3.59 Outstanding at September 30, 2017 2,845,866 $ 4.21 5.4 Granted 299,397 $ 8.60 Exercised (250,823) $ 2.96 Canceled (88,076) $ 5.23 Outstanding at September 30, 2018 2,806,364 $ 4.75 4.6 |
RSU Activity | Restricted Stock Units The following table summarizes RSU activity in the fiscal years ended September 30, 2018, 2017, and 2016: Number of Shares Weighted- Average Fair Value Per Share Outstanding at September 30, 2015 802,917 $ 4.49 Granted 1,536,000 $ 4.82 Settled (261,621) $ 4.77 Canceled (31,127) $ 4.19 Outstanding at September 30, 2016 2,046,169 $ 4.90 Granted 1,249,224 $ 6.61 Settled (707,174) $ 4.81 Canceled (231,198) $ 4.93 Outstanding at September 30, 2017 2,357,021 $ 5.65 Granted 1,184,906 $ 8.54 Settled (745,197) $ 5.26 Canceled (216,554) $ 7.39 Outstanding at September 30, 2018 2,580,176 $ 6.92 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Tax (Provision) Benefit | Income (loss) before income taxes for the years ended September 30, 2018, 2017, and 2016 is comprised of the following ( amounts shown in thousands ): 2018 2017 2016 Domestic $ (1,584) $ 4,057 $ 2,732 Foreign (7,157) (886) (774) Total $ (8,741) $ 3,171 $ 1,958 For the years ended September 30, 2018, 2017, and 2016 the income tax benefit (provision) was as follows (amounts shown in thousands): 2018 2017 2016 Federal—current $ (87) $ (127) $ (129) Federal—deferred (4,537) 8,291 — State—current (26) (20) (16) State—deferred 773 2,748 — Foreign—current (270) 29 146 Foreign—deferred 1,081 — — Total $ (3,066) $ 10,921 $ 1 |
Company's Net Deferred Tax Assets and Liabilities | Significant components of the Company’s net deferred tax assets and liabilities as of September 30, 2018 and 2017 are as follows (amounts shown in thousands): 2018 2017 Deferred tax assets: Stock-based compensation $ 3,067 $ 3,671 Net operating loss carryforwards 8,568 3,453 Research credit carryforwards 3,890 3,171 AMT credit carryforwards — 392 Foreign net operating losses — 386 Other, net 354 770 Total deferred assets 15,879 11,843 Deferred tax liabilities: Intangibles (181) (393) Foreign deferred liabilities (8,032) (280) Net deferred tax asset 7,666 11,170 Valuation allowance for net deferred tax assets (472) (105) Net deferred tax asset $ 7,194 $ 11,065 |
Income Taxes Computed Using Federal Income Tax Rate | The difference between the income tax benefit (provision) and income taxes computed using the U.S. federal income tax rate was as follows for the years ended September 30, 2018, 2017, and 2016 (amounts shown in thousands): 2018 2017 2016 Amount computed using statutory rate $ 2,122 $ (1,078) $ (666) Net change in valuation allowance for net deferred tax assets (367) 10,058 1,889 AMT and other (191) 20 (148) Foreign rate differential 22 (169) (70) Non-deductible items (276) (370) (1,136) State income tax 50 (34) (15) Foreign net operating loss — — 147 Impact of tax reform on deferred taxes (4,901) — — Research and development credits 475 2,494 — Income tax benefit (provision) $ (3,066) $ 10,921 $ 1 |
Schedule of Unrecognized Tax Benefits Roll Forward | The following table reconciles the beginning and ending amount of unrecognized tax benefits for the fiscal years ended September 30, 2018, 2017, and 2016 (amounts shown in thousands): 2018 2017 2016 Gross unrecognized tax benefits at the beginning of the year $ 1,181 $ — $ — Additions from tax positions taken in the current year 140 140 — Additions from tax positions taken in prior years — 1,041 — Reductions from tax positions taken in prior years — — — Tax settlements — — — Gross unrecognized tax benefits at end of the year $ 1,321 $ 1,181 $ — |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Future Annual Minimum Rental Payments Payable | Future annual minimum rental payments payable under the facility and other operating leases are as follows (shown in thousands): Years ended September 30: 2019 $ 2,061 2020 1,509 2021 1,964 2022 1,567 2023 1,363 Thereafter 942 Total $ 9,406 |
QUARTERLY INFORMATION (UNAUDI_2
QUARTERLY INFORMATION (UNAUDITED) (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Quarterly Financial Data | The following table sets forth selected quarterly financial data for 2018, 2017, and 2016 (shown in thousands except per share data): 2018 1 2 3 4 Revenue $ 12,136 $ 14,277 $ 16,109 $ 21,037 Cost of revenue 1,617 1,717 2,678 2,674 Operating expenses 12,831 13,825 16,294 19,729 Operating loss (2,312) (1,265) (2,863) (1,366) Other income (expense), net 190 204 (1,351) 22 Income tax benefit (provision) (3,614) (99) 1,430 (783) Net loss $ (5,736) $ (1,160) $ (2,784) $ (2,127) Net loss per share: Net loss per share—basic $ (0.17) $ (0.03) $ (0.08) $ (0.06) Shares used in calculating net loss per share—basic 34,207 34,976 36,190 37,858 Net loss per share—diluted $ (0.17) $ (0.03) $ (0.08) $ (0.06) Shares used in calculating net loss per share—diluted 34,207 34,976 36,190 37,858 2017 1 2 3 4 Revenue $ 9,269 $ 11,419 $ 11,798 $ 12,904 Cost of revenue 891 830 1,182 1,138 Operating expenses 9,050 9,365 10,132 10,033 Operating income (loss) (672) 1,224 484 1,733 Other income, net 65 67 149 121 Income tax benefit (provision) — (74) (17) 11,012 Net income (loss) $ (607) $ 1,217 $ 616 $ 12,866 Net income (loss) per share: Net income (loss) per share—basic $ (0.02) $ 0.04 $ 0.02 $ 0.38 Shares used in calculating net income (loss) per share—basic 32,377 32,786 33,024 33,522 Net income (loss) per share—diluted $ (0.02) $ 0.03 $ 0.02 $ 0.35 Shares used in calculating net income (loss) per share—diluted 32,377 34,815 35,610 36,251 2016 1 2 3 4 Revenue $ 7,404 $ 8,522 $ 9,105 $ 9,670 Cost of revenue 942 720 793 940 Operating expenses 6,804 7,171 7,618 7,889 Operating income (loss) (342) 631 694 841 Other income, net 36 30 45 23 Income tax benefit (provision) (16) (79) — 96 Net income (loss) $ (322) $ 582 $ 739 $ 960 Net income (loss) per share: Net income (loss) per share—basic $ (0.01) $ 0.02 $ 0.02 $ 0.03 Shares used in calculating net income (loss) per share—basic 31,094 31,326 31,823 32,086 Net income (loss) per share—diluted $ (0.01) $ 0.02 $ 0.02 $ 0.03 Shares used in calculating net income (loss) per share—diluted 31,094 33,134 34,532 34,860 |
NATURE OF OPERATIONS AND SUMM_4
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - ADDITIONAL INFORMATION (Details) | 3 Months Ended | 12 Months Ended | ||||
Sep. 30, 2018USD ($)patentinstitution$ / shares | Sep. 30, 2018USD ($)segmentpatentinstitution$ / shares | Sep. 30, 2017USD ($)$ / shares | Sep. 30, 2016USD ($) | Oct. 01, 2018USD ($) | Oct. 01, 2017USD ($) | |
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | ||||||
Number of financial institutions signed agreements to deploy mobile deposit | institution | 6,100 | 6,100 | ||||
Number of patents granted | patent | 49 | 49 | ||||
Number of patent applications pending | patent | 21 | 21 | ||||
Foreign currency translation adjustment | $ (723,000) | $ 208,000 | $ (46,000) | |||
Other-than-temporary impairment charges recognized | 0 | 0 | 0 | |||
Write-offs of allowance for doubtful accounts | 0 | 0 | 0 | |||
Allowance for doubtful accounts receivable | $ 262,000 | $ 262,000 | 31,000 | |||
Deferred software maintenance fees amortization period | 1 year | |||||
Depreciation and other amortization | $ 615,000 | 322,000 | 790,000 | |||
Total repairs and maintenance expenses | 100,000 | 200,000 | 200,000 | |||
Impairment charges | 0 | 0 | 0 | |||
Software development costs capitalized | 0 | 0 | 0 | |||
Amortization expense from capitalized software costs or purchased technology | 0 | 0 | 0 | |||
Capitalized software development costs for internal use | 900,000 | 900,000 | 0 | |||
Amortization expense for capitalized software development costs for internal use | $ 100,000 | $ 0 | 0 | |||
Number of operating segments | segment | 1 | |||||
Number of reporting units | segment | 1 | |||||
Goodwill impairment | $ 0 | |||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | |||
Impairment charges related to intangible assets | $ 0 | $ 0 | 0 | |||
Advertising costs | 500,000 | 300,000 | $ 200,000 | |||
Accumulated other comprehensive income (loss) | $ (586,000) | $ (586,000) | 147,000 | |||
ASU 2016-09 | ||||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | ||||||
Cumulative effect adjustment of new accounting pronouncement in the period of adoption | 8,255,000 | |||||
ASU 2016-09 | Retained Earnings | ||||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | ||||||
Cumulative effect adjustment of new accounting pronouncement in the period of adoption | $ 8,255,000 | $ 8,300,000 | ||||
ICAR | Spanish Government Agencies | ||||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | ||||||
Interest rate of loan agreements | 0.00% | 0.00% | ||||
Total amounts outstanding under loan agreements | $ 800,000 | $ 800,000 | ||||
ICAR | Spanish Government Agencies | Other Current Liabilities | ||||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | ||||||
Current amount outstanding under loan agreements | 300,000 | 300,000 | ||||
ICAR | Spanish Government Agencies | Other Noncurrent Liabilities | ||||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | ||||||
Non-current amount outstanding under loan agreements | $ 500,000 | $ 500,000 | ||||
Performance Shares | ||||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | ||||||
Trading-day average stock price period | 20 days | |||||
Minimum | ||||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | ||||||
Property and equipment, estimated useful lives | 3 years | |||||
Minimum | ASC Topic 606 | Scenario, Forecast | Retained Earnings | ||||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | ||||||
Cumulative effect adjustment of new accounting pronouncement in the period of adoption | $ 1,200,000 | |||||
Cumulative-effect adjustment of new accounting pronouncement, net of income tax | 800,000 | |||||
Minimum | ICAR | Spanish Government Agencies | ||||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | ||||||
Repayment period of loan agreements | 5 years | |||||
Maximum | ||||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | ||||||
Property and equipment, estimated useful lives | 10 years | |||||
Maximum | ASC Topic 606 | Scenario, Forecast | Retained Earnings | ||||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | ||||||
Cumulative effect adjustment of new accounting pronouncement in the period of adoption | 2,000,000 | |||||
Cumulative-effect adjustment of new accounting pronouncement, net of income tax | $ 1,400,000 | |||||
Maximum | ICAR | Spanish Government Agencies | ||||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | ||||||
Repayment period of loan agreements | 12 years |
NATURE OF OPERATIONS AND SUMM_5
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - POTENTIALLY DILUTIVE COMMON SHARES EXCLUDED FROM NET INCOME (LOSS) PER SHARE CALCULATION (Details) - shares shares in Thousands | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total potentially dilutive common shares outstanding (in shares) | 5,457 | 676 | 2,232 |
Closing Shares | IDchecker | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total potentially dilutive common shares outstanding (in shares) | 0 | 0 | 349 |
Earnout Shares | IDchecker | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total potentially dilutive common shares outstanding (in shares) | 0 | 24 | 0 |
Stock options | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total potentially dilutive common shares outstanding (in shares) | 2,806 | 569 | 1,259 |
RSUs | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total potentially dilutive common shares outstanding (in shares) | 2,580 | 83 | 624 |
ESPP common stock equivalents | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total potentially dilutive common shares outstanding (in shares) | 71 | 0 | 0 |
NATURE OF OPERATIONS AND SUMM_6
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - COMPUTATION OF BASIC AND DILUTED NET INCOME (LOSS) PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Earnings Per Share Basic And Diluted [Line Items] | |||||||||||||||
Net income (loss) | $ (2,127) | $ (2,784) | $ (1,160) | $ (5,736) | $ 12,866 | $ 616 | $ 1,217 | $ (607) | $ 960 | $ 739 | $ 582 | $ (322) | $ (11,807) | $ 14,092 | $ 1,959 |
Weighted-average shares outstanding—basic (in shares) | 37,858 | 36,190 | 34,976 | 34,207 | 33,522 | 33,024 | 32,786 | 32,377 | 32,086 | 31,823 | 31,326 | 31,094 | 35,811 | 33,083 | 31,587 |
Common stock equivalents (in shares) | 0 | 2,454 | 2,232 | ||||||||||||
Weighted-average shares outstanding—diluted (in shares) | 37,858 | 36,190 | 34,976 | 34,207 | 36,251 | 35,610 | 34,815 | 32,377 | 34,860 | 34,532 | 33,134 | 31,094 | 35,811 | 35,537 | 33,819 |
Net income (loss) per share: | |||||||||||||||
Basic (in dollars per share) | $ (0.06) | $ (0.08) | $ (0.03) | $ (0.17) | $ 0.38 | $ 0.02 | $ 0.04 | $ (0.02) | $ 0.03 | $ 0.02 | $ 0.02 | $ (0.01) | $ (0.33) | $ 0.43 | $ 0.06 |
Diluted (in dollars per share) | $ (0.06) | $ (0.08) | $ (0.03) | $ (0.17) | $ 0.35 | $ 0.02 | $ 0.03 | $ (0.02) | $ 0.03 | $ 0.02 | $ 0.02 | $ (0.01) | $ (0.33) | $ 0.40 | $ 0.06 |
NATURE OF OPERATIONS AND SUMM_7
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - SUMMARY OF PROPERTY AND EQUIPMENT (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Sep. 30, 2017 |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, at cost | $ 7,770 | $ 3,186 |
Less: accumulated depreciation and amortization | (3,105) | (2,573) |
Total property and equipment, net | 4,665 | 613 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, at cost | 3,825 | 1,128 |
Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, at cost | 2,604 | 1,801 |
Capitalized internal-use software development costs | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, at cost | 916 | 0 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, at cost | $ 425 | $ 257 |
BUSINESS COMBINATIONS - ADDITIO
BUSINESS COMBINATIONS - ADDITIONAL INFORMATION (Details) - USD ($) $ in Thousands | May 23, 2018 | Oct. 16, 2017 | Dec. 31, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | Apr. 30, 2018 |
Business Acquisition [Line Items] | |||||||
Acquisition, net of cash acquired | $ 29,744 | $ 0 | $ 0 | ||||
Acquisition-related contingent consideration | 3,051 | 354 | |||||
Additional expense recognized in acquisition-related costs and expenses | 1,750 | 0 | 0 | ||||
Payment for contingent consideration liability | 1,284 | $ 0 | $ 0 | ||||
Revenue from business combinations | 9,100 | ||||||
Net loss from business combinations | 5,300 | ||||||
A2iA | |||||||
Business Acquisition [Line Items] | |||||||
Acquisition, net of cash acquired | $ 26,800 | ||||||
Acquisition-related shares issued (in shares) | 2,514,588 | ||||||
Common stock issued during acquisition, value | $ 21,900 | ||||||
Transaction-related liabilities | 200 | ||||||
Expenses incurred in connection with acquisition | 2,100 | ||||||
Payments for cash for collateral | $ 700 | ||||||
Payments for collateral, equity (in shares) | 508,479 | ||||||
Payments for collateral, equity, value | $ 4,400 | ||||||
Period to maintain escrow funds | 24 months | ||||||
ICAR | |||||||
Business Acquisition [Line Items] | |||||||
Acquisition, net of cash acquired | $ 3,000 | ||||||
Acquisition-related shares issued (in shares) | 584,291 | ||||||
Common stock issued during acquisition, value | $ 5,600 | ||||||
Expenses incurred in connection with acquisition | $ 500 | ||||||
Period to maintain escrow funds | 24 months | ||||||
Acquisition-related contingent consideration | $ 2,900 | ||||||
Additional expense recognized in acquisition-related costs and expenses | $ 1,800 | ||||||
Escrow deposit | 1,500 | $ 1,500 | |||||
ICAR | Contingent Consideration, Fourth Quarter Consideration | |||||||
Business Acquisition [Line Items] | |||||||
Contingent consideration arrangement, range of outcomes, high | 1,500 | ||||||
ICAR | Contingent Consideration, Earnout Consideration | |||||||
Business Acquisition [Line Items] | |||||||
Contingent consideration arrangement, range of outcomes, high | 3,800 | ||||||
ICAR | Contingent Consideration, Earnout Consideration | Subsequent Event | Scenario, Forecast | |||||||
Business Acquisition [Line Items] | |||||||
Payment for contingent consideration liability | $ 1,800 | ||||||
ICAR | Maximum | |||||||
Business Acquisition [Line Items] | |||||||
Total consideration paid | $ 13,900 |
BUSINESS COMBINATIONS - SCHEDUL
BUSINESS COMBINATIONS - SCHEDULE OF ESTIMATED FAIR VALUE OF ASSETS ACQUIRED AND LIABILITIES ASSUMED (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Sep. 30, 2017 |
Business Acquisition [Line Items] | ||
Goodwill | $ 34,407 | $ 3,014 |
A2iA Group II S.A.S. and ICAR Vision Systems, S.L. | ||
Business Acquisition [Line Items] | ||
Current assets | 5,965 | |
Property, plant, and equipment | 390 | |
Intangible assets | 35,017 | |
Goodwill | 31,803 | |
Other non-current assets | 1,264 | |
Current liabilities | (4,216) | |
Deferred income tax liabilities | (9,105) | |
Other non-current liabilities | (835) | |
Net assets acquired | 60,283 | |
A2iA | ||
Business Acquisition [Line Items] | ||
Current assets | 3,929 | |
Property, plant, and equipment | 307 | |
Goodwill | 24,867 | |
Other non-current assets | 1,177 | |
Current liabilities | (2,564) | |
Deferred income tax liabilities | (7,503) | |
Other non-current liabilities | (7) | |
Net assets acquired | 48,816 | |
ICAR | ||
Business Acquisition [Line Items] | ||
Current assets | 2,036 | |
Property, plant, and equipment | 83 | |
Goodwill | 6,936 | |
Other non-current assets | 87 | |
Current liabilities | (1,652) | |
Deferred income tax liabilities | (1,602) | |
Other non-current liabilities | (828) | |
Net assets acquired | $ 11,467 |
BUSINESS COMBINATIONS - INTANGI
BUSINESS COMBINATIONS - INTANGIBLE ASSETS ACQUIRED (Details) - USD ($) $ in Thousands | May 23, 2018 | Oct. 16, 2017 | Sep. 30, 2018 | Sep. 30, 2017 |
Customer relationships | ||||
Acquired Indefinite-lived Intangible Assets [Line Items] | ||||
Amortization Period | 4 years 9 months 18 days | 6 years | ||
A2iA | ||||
Acquired Indefinite-lived Intangible Assets [Line Items] | ||||
Amount assigned | $ 28,610 | |||
A2iA | Completed technologies | ||||
Acquired Indefinite-lived Intangible Assets [Line Items] | ||||
Amortization Period | 7 years | |||
Amount assigned | $ 13,015 | |||
A2iA | Customer relationships | ||||
Acquired Indefinite-lived Intangible Assets [Line Items] | ||||
Amortization Period | 5 years | |||
Amount assigned | $ 15,360 | |||
A2iA | Trade names | ||||
Acquired Indefinite-lived Intangible Assets [Line Items] | ||||
Amortization Period | 5 years | |||
Amount assigned | $ 235 | |||
ICAR | ||||
Acquired Indefinite-lived Intangible Assets [Line Items] | ||||
Amount assigned | $ 6,407 | |||
ICAR | Completed technologies | ||||
Acquired Indefinite-lived Intangible Assets [Line Items] | ||||
Amortization Period | 5 years | |||
Amount assigned | $ 4,956 | |||
ICAR | Customer relationships | ||||
Acquired Indefinite-lived Intangible Assets [Line Items] | ||||
Amortization Period | 2 years | |||
Amount assigned | $ 1,298 | |||
ICAR | Trade names | ||||
Acquired Indefinite-lived Intangible Assets [Line Items] | ||||
Amortization Period | 3 years | |||
Amount assigned | $ 153 |
BUSINESS COMBINATIONS - PRO FOR
BUSINESS COMBINATIONS - PRO FORMA FINANCIAL INFORMATION (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Business Combinations [Abstract] | ||
Pro forma revenue | $ 78,130 | $ 60,802 |
Pro forma net income (loss) | $ (12,268) | $ 6,855 |
INVESTMENTS - ADDITIONAL INFORM
INVESTMENTS - ADDITIONAL INFORMATION (Details) - USD ($) | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Investments, Debt and Equity Securities [Abstract] | |||
Other-than-temporary impairment charges recognized | $ 0 | $ 0 | $ 0 |
Realized gains (losses) from sale of available-for-sale securities | (49,000) | 0 | $ 0 |
Debt Securities, Available-for-sale [Line Items] | |||
Acquisition-related consideration, current | 1,849,000 | $ 0 | |
Other Current Liabilities | ICAR | |||
Debt Securities, Available-for-sale [Line Items] | |||
Acquisition-related consideration, current | 1,800,000 | ||
Other Noncurrent Liabilities | ICAR | |||
Debt Securities, Available-for-sale [Line Items] | |||
Acquisition-related consideration, noncurrent | $ 1,200,000 |
INVESTMENTS - SUMMARY OF INVEST
INVESTMENTS - SUMMARY OF INVESTMENTS BY TYPE OF SECURITY (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Sep. 30, 2017 |
Debt Securities, Available-for-sale [Line Items] | ||
Cost | $ 8,472 | $ 34,075 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (24) | (16) |
Fair Market Value | 8,448 | 34,059 |
US Treasury | Short-term investments | ||
Debt Securities, Available-for-sale [Line Items] | ||
Cost | 3,693 | 3,897 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (10) | (3) |
Fair Market Value | 3,683 | 3,894 |
Corporate debt securities | Short-term investments | ||
Debt Securities, Available-for-sale [Line Items] | ||
Cost | 4,779 | 26,393 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (14) | (8) |
Fair Market Value | $ 4,765 | 26,385 |
Corporate debt securities | Long-term investments | ||
Debt Securities, Available-for-sale [Line Items] | ||
Cost | 3,785 | |
Gross Unrealized Gains | 0 | |
Gross Unrealized Losses | (5) | |
Fair Market Value | $ 3,780 |
INVESTMENTS - SUMMARY OF FAIR V
INVESTMENTS - SUMMARY OF FAIR VALUE OF INVESTMENTS MEASURED ON A RECURRING BASIS (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Sep. 30, 2017 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments at fair value | $ 30,279 | |
Total assets at fair value | $ 8,448 | 34,059 |
Acquisition-related contingent consideration | 3,051 | 354 |
Total liabilities at fair value | 3,051 | 354 |
US Treasury | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments at fair value | 3,683 | 3,894 |
Corporate debt securities | Financial | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments at fair value | 2,847 | 3,041 |
Long-term investments at fair value | 1,858 | |
Corporate debt securities | Industrial | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments at fair value | 1,918 | 9,503 |
Long-term investments at fair value | 1,922 | |
Commercial paper | Financial | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments at fair value | 10,850 | |
Commercial paper | Industrial | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments at fair value | 2,991 | |
Quoted Prices in Active Markets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments at fair value | 3,894 | |
Total assets at fair value | 3,683 | 3,894 |
Acquisition-related contingent consideration | 0 | 0 |
Total liabilities at fair value | 0 | 0 |
Quoted Prices in Active Markets (Level 1) | US Treasury | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments at fair value | 3,683 | 3,894 |
Quoted Prices in Active Markets (Level 1) | Corporate debt securities | Financial | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments at fair value | 0 | 0 |
Long-term investments at fair value | 0 | |
Quoted Prices in Active Markets (Level 1) | Corporate debt securities | Industrial | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments at fair value | 0 | 0 |
Long-term investments at fair value | 0 | |
Quoted Prices in Active Markets (Level 1) | Commercial paper | Financial | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments at fair value | 0 | |
Quoted Prices in Active Markets (Level 1) | Commercial paper | Industrial | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments at fair value | 0 | |
Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments at fair value | 26,385 | |
Total assets at fair value | 4,765 | 30,165 |
Acquisition-related contingent consideration | 0 | 0 |
Total liabilities at fair value | 0 | 0 |
Significant Other Observable Inputs (Level 2) | US Treasury | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments at fair value | 0 | 0 |
Significant Other Observable Inputs (Level 2) | Corporate debt securities | Financial | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments at fair value | 2,847 | 3,041 |
Long-term investments at fair value | 1,858 | |
Significant Other Observable Inputs (Level 2) | Corporate debt securities | Industrial | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments at fair value | 1,918 | 9,503 |
Long-term investments at fair value | 1,922 | |
Significant Other Observable Inputs (Level 2) | Commercial paper | Financial | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments at fair value | 10,850 | |
Significant Other Observable Inputs (Level 2) | Commercial paper | Industrial | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments at fair value | 2,991 | |
Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments at fair value | 0 | |
Total assets at fair value | 0 | 0 |
Acquisition-related contingent consideration | 3,051 | 354 |
Total liabilities at fair value | 3,051 | 354 |
Significant Unobservable Inputs (Level 3) | US Treasury | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments at fair value | 0 | 0 |
Significant Unobservable Inputs (Level 3) | Corporate debt securities | Financial | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments at fair value | 0 | 0 |
Long-term investments at fair value | 0 | |
Significant Unobservable Inputs (Level 3) | Corporate debt securities | Industrial | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments at fair value | $ 0 | 0 |
Long-term investments at fair value | 0 | |
Significant Unobservable Inputs (Level 3) | Commercial paper | Financial | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments at fair value | 0 | |
Significant Unobservable Inputs (Level 3) | Commercial paper | Industrial | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments at fair value | $ 0 |
INVESTMENTS - SUMMARY OF ACQUIS
INVESTMENTS - SUMMARY OF ACQUISITION-RELATED CONTINGENT CONSIDERATION MEASURED AT FAIR VALUE (Details) - Contingent Consideration - ICAR Vision Systems, S.L. $ in Thousands | 12 Months Ended |
Sep. 30, 2018USD ($) | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
September 30, 2017 | $ 354 |
Issuance of contingent consideration | 2,867 |
Expenses recorded due to changes in fair value | 2,105 |
Payment of contingent consideration | (1,489) |
Issuance of common stock | (710) |
Foreign currency effect on contingent consideration | (76) |
Balance at September 30, 2018 | $ 3,051 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS - CHANGES IN BALANCE OF GOODWILL (Details) $ in Thousands | 12 Months Ended |
Sep. 30, 2018USD ($) | |
Goodwill [Roll Forward] | |
Balance at September 30, 2017 | $ 3,014 |
Foreign currency effect on goodwill | (410) |
Balance at September 30, 2018 | 34,407 |
ICAR | |
Goodwill [Roll Forward] | |
Acquisitions | 6,936 |
Balance at September 30, 2018 | 6,936 |
A2iA | |
Goodwill [Roll Forward] | |
Acquisitions | 24,867 |
Balance at September 30, 2018 | $ 24,867 |
GOODWILL AND INTANGIBLE ASSET_3
GOODWILL AND INTANGIBLE ASSETS - ADDITIONAL INFORMATION (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Goodwill | $ 34,407 | $ 3,014 | |
Disclosure - Goodwill and Intangible Assets - Additional Information (Detail) [Line Items] | |||
Amortization of acquisition-related intangible assets | 4,023 | 591 | $ 598 |
Acquisition-related costs and expenses | |||
Disclosure - Goodwill and Intangible Assets - Additional Information (Detail) [Line Items] | |||
Amortization of acquisition-related intangible assets | $ 4,000 | $ 600 | $ 600 |
Minimum | |||
Disclosure - Goodwill and Intangible Assets - Additional Information (Detail) [Line Items] | |||
Estimated useful lives of intangible assets | 2 years | ||
Maximum | |||
Disclosure - Goodwill and Intangible Assets - Additional Information (Detail) [Line Items] | |||
Estimated useful lives of intangible assets | 7 years |
GOODWILL AND INTANGIBLE ASSET_4
GOODWILL AND INTANGIBLE ASSETS - SCHEDULE OF INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Indefinite-lived Intangible Assets [Line Items] | ||
Cost | $ 38,587 | $ 3,570 |
Accumulated Amortization | 5,640 | 1,273 |
Net | $ 32,947 | $ 2,297 |
Completed technologies | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Weighted Average Amortization Period | 6 years 4 months 24 days | 6 years |
Cost | $ 20,341 | $ 2,370 |
Accumulated Amortization | 3,070 | 833 |
Net | $ 17,271 | $ 1,537 |
Customer relationships | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Weighted Average Amortization Period | 4 years 9 months 18 days | 6 years |
Cost | $ 17,628 | $ 970 |
Accumulated Amortization | 2,351 | 341 |
Net | $ 15,277 | $ 629 |
Trade names | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Weighted Average Amortization Period | 4 years 6 months | 5 years |
Cost | $ 618 | $ 230 |
Accumulated Amortization | 219 | 99 |
Net | $ 399 | $ 131 |
GOODWILL AND INTANGIBLE ASSET_5
GOODWILL AND INTANGIBLE ASSETS - SCHEDULE OF ESTIMATED FUTURE AMORTIZATION EXPENSE (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Sep. 30, 2017 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2,019 | $ 7,219 | |
2,020 | 6,594 | |
2,021 | 6,318 | |
2,022 | 5,909 | |
2,023 | 3,879 | |
Thereafter | 3,028 | |
Net | $ 32,947 | $ 2,297 |
STOCKHOLDERS' EQUITY - ADDITION
STOCKHOLDERS' EQUITY - ADDITIONAL INFORMATION (Details) | Jun. 17, 2015shares | Dec. 31, 2017 | Sep. 30, 2018USD ($)$ / sharesshares | Sep. 30, 2015shares | Sep. 30, 2018USD ($)$ / sharesshares | Sep. 30, 2017USD ($)$ / sharesshares | Sep. 30, 2016USD ($)$ / sharesshares | Oct. 23, 2018$ / right$ / sharesshares | Mar. 07, 2018shares | Mar. 10, 2017shares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Unrecognized compensation expense | $ | $ 14,700,000 | $ 14,700,000 | ||||||||
Weighted average period for unrecognized compensation expense expected to be recognized (in years) | 2 years 3 months 18 days | |||||||||
Purchase of common stock (in shares) | 2,806,364 | 3,647,705 | 2,806,364 | 2,845,866 | 3,015,374 | |||||
Recognized compensation expense | $ | $ 8,950,000 | $ 5,478,000 | $ 4,079,000 | |||||||
Total intrinsic value of options exercised | $ | $ 1,400,000 | $ 1,400,000 | $ 3,300,000 | |||||||
Weighted average fair value of options granted (in dollars per share) | $ / shares | $ 4.56 | $ 4.28 | $ 3.29 | |||||||
Aggregate intrinsic value of options | $ | $ 8,700,000 | $ 8,700,000 | $ 15,600,000 | |||||||
Excess tax benefit on stock option exercises | $ | $ 0 | $ 0 | ||||||||
Preferred stock, par value per share (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | |||||||
Subsequent Event | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Preferred stock, par value per share (in dollars per share) | $ / shares | $ 0.001 | |||||||||
Earnout Shares | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Recognized compensation expense | $ | $ 400,000 | $ 400,000 | $ 300,000 | |||||||
Common stock trading period | 10 days | |||||||||
Series B Junior Preferred Stock | Subsequent Event | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Preferred stock, share conversion ratio | 0.001 | |||||||||
Number of preferred share purchase right for each share of common stock (in shares) | 1 | |||||||||
Preferred stock, par value per share (in dollars per share) | $ / shares | $ 0.001 | |||||||||
Preferred stock, purchase price per right (in dollars per right) | $ / right | 35 | |||||||||
Preferred stock, redemption price per right (in dollars per share) | $ / shares | $ 0.0001 | |||||||||
IDchecker | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Earnout shares issued (in shares) | 137,306 | 81,182 | ||||||||
IDchecker | Closing Shares | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Recognized compensation expense | $ | $ 0 | $ 1,200,000 | $ 1,200,000 | |||||||
Common stock issued during acquisition (in shares) | 712,790 | |||||||||
Vesting period of shares received | 27 months | |||||||||
RSUs | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Weighted average period for unrecognized compensation expense expected to be recognized (in years) | 2 years 3 months 18 days | |||||||||
Options outstanding (in shares) | 2,580,176 | 802,917 | 2,580,176 | 2,357,021 | 2,046,169 | |||||
Recognized compensation expense | $ | $ 5,900,000 | $ 4,000,000 | $ 2,700,000 | |||||||
Unrecognized compensation expense | $ | $ 11,700,000 | $ 11,700,000 | ||||||||
Performance Shares | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Weighted average period for unrecognized compensation expense expected to be recognized (in years) | 2 years 1 month 6 days | |||||||||
Options outstanding (in shares) | 2,042,817 | 2,042,817 | ||||||||
Recognized compensation expense | $ | $ 1,500,000 | 400,000 | ||||||||
Unrecognized compensation expense | $ | $ 1,900,000 | $ 1,900,000 | ||||||||
Stock options | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Weighted average period for unrecognized compensation expense expected to be recognized (in years) | 2 years 6 months | |||||||||
Unrecognized compensation expense | $ | $ 1,000,000 | $ 1,000,000 | ||||||||
2012 Plan | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Common stock reserved for issuance (in shares) | 9,500,000 | |||||||||
Purchase of common stock (in shares) | 1,776,798 | 1,776,798 | ||||||||
Number of common stock reserved for future grants (in shares) | 2,745,093 | 2,745,093 | ||||||||
2012 Plan | RSUs | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Options outstanding (in shares) | 2,137,338 | 2,137,338 | ||||||||
2012 Plan | Performance Shares | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Options outstanding (in shares) | 2,042,817 | 2,042,817 | ||||||||
Prior Plans | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Purchase of common stock (in shares) | 1,029,566 | 1,029,566 | ||||||||
ESPP | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Common stock reserved for issuance (in shares) | 1,000,000 | |||||||||
Number of common stock reserved for future grants (in shares) | 939,249 | 939,249 | ||||||||
Shares issued under the plan (in shares) | 60,751 | |||||||||
Recognized compensation expense | $ | $ 200,000 | |||||||||
ESPP | Minimum | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Discount rate from market price offering date | 15.00% | |||||||||
Discount rate from market price purchase date | 0.15 | |||||||||
ESPP | Stock options | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Recognized compensation expense | $ | $ 1,400,000 | $ 1,000,000 | $ 1,300,000 | |||||||
Director Plan | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Number of common stock reserved for future grants (in shares) | 445,733 | 445,733 | ||||||||
Director Plan | RSUs | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Common stock reserved for issuance (in shares) | 1,500,000 | |||||||||
Purchase of common stock (in shares) | 442,838 | 442,838 |
STOCKHOLDERS' EQUITY - FAIR VAL
STOCKHOLDERS' EQUITY - FAIR VALUE CALCULATIONS FOR STOCK-BASED COMPENSATION AWARDS (Details) | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Equity [Abstract] | |||
Risk-free interest rate, Minimum | 2.04% | 1.68% | 1.43% |
Risk-free interest rate, Maximum | 1.92% | 1.66% | |
Expected life (years) | 5 years 1 month 24 days | 5 years 3 months | 5 years 10 months 24 days |
Expected volatility rate | 60.00% | 74.00% | 83.00% |
Expected dividend rate | 0.00% | 0.00% | 0.00% |
STOCKHOLDERS' EQUITY - STOCK-BA
STOCKHOLDERS' EQUITY - STOCK-BASED COMPENSATION EXPENSE RELATED TO STOCK OPTIONS AND RSUs (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Stock-based compensation expense related to employee stock options included in expenses | $ 8,950 | $ 5,478 | $ 4,079 |
Cost of revenue | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Stock-based compensation expense related to employee stock options included in expenses | 78 | 52 | 39 |
Sales and marketing | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Stock-based compensation expense related to employee stock options included in expenses | 2,656 | 1,577 | 1,099 |
Research and development | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Stock-based compensation expense related to employee stock options included in expenses | 1,801 | 1,028 | 660 |
General and administrative | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Stock-based compensation expense related to employee stock options included in expenses | $ 4,415 | $ 2,821 | $ 2,281 |
STOCKHOLDERS' EQUITY - STOCK OP
STOCKHOLDERS' EQUITY - STOCK OPTION ACTIVITY (Details) - $ / shares | 12 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2015 | |
Number ofShares | ||||
Beginning balance (in shares) | 2,845,866 | 3,015,374 | 3,647,705 | |
Granted (in shares) | 299,397 | 147,800 | 98,500 | |
Exercised (in shares) | (250,823) | (235,514) | (661,663) | |
Canceled (in shares) | (88,076) | (81,794) | (69,168) | |
Ending balance (in shares) | 2,806,364 | 2,845,866 | 3,015,374 | 3,647,705 |
Weighted- Average Exercise Price Per Share | ||||
Beginning balance (in dollars per share) | $ 4.21 | $ 3.95 | $ 3.70 | |
Granted (in dollars per share) | 8.60 | 7.06 | 4.51 | |
Exercised (in dollars per share) | 2.96 | 2.92 | 2.67 | |
Cancelled (in dollars per share) | 5.23 | 3.59 | 4.51 | |
Ending balance (in dollars per share) | $ 4.75 | $ 4.21 | $ 3.95 | $ 3.70 |
Additional Disclosures [Abstract] | ||||
Weighted Average Remaining Contractual Term (in Years) | 4 years 7 months 6 days | 5 years 4 months 24 days | 6 years 4 months 24 days | 7 years 2 months 12 days |
STOCKHOLDERS' EQUITY - RSU ACTI
STOCKHOLDERS' EQUITY - RSU ACTIVITY (Details) - RSUs - $ / shares | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Number of Shares | |||
Beginning balance (in shares) | 2,357,021 | 2,046,169 | 802,917 |
Granted (in shares) | 1,184,906 | 1,249,224 | 1,536,000 |
Settled (in shares) | (745,197) | (707,174) | (261,621) |
Canceled (in shares) | (216,554) | (231,198) | (31,127) |
Ending balance (in shares) | 2,580,176 | 2,357,021 | 2,046,169 |
Weighted- Average Fair Value Per Share | |||
Beginning balance (in dollars per share) | $ 5.65 | $ 4.90 | $ 4.49 |
Granted (in dollars per share) | 8.54 | 6.61 | 4.82 |
Settled (in dollars per share) | 5.26 | 4.81 | 4.77 |
Cancelled (in dollars per share) | 7.39 | 4.93 | 4.19 |
Ending balance (in dollars per share) | $ 6.92 | $ 5.65 | $ 4.90 |
INCOME TAXES - INCOME TAX (PROV
INCOME TAXES - INCOME TAX (PROVISION) BENEFIT (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Income (Loss) before taxes by component | |||||||||||||||
Domestic | $ (1,584) | $ 4,057 | $ 2,732 | ||||||||||||
Foreign | (7,157) | (886) | (774) | ||||||||||||
Income (loss) before income taxes | (8,741) | 3,171 | 1,958 | ||||||||||||
Federal—current | (87) | (127) | (129) | ||||||||||||
Federal—deferred | (4,537) | 8,291 | 0 | ||||||||||||
State—current | (26) | (20) | (16) | ||||||||||||
State—deferred | 773 | 2,748 | 0 | ||||||||||||
Foreign—current | (270) | 29 | 146 | ||||||||||||
Foreign—deferred | 1,081 | 0 | 0 | ||||||||||||
Income tax benefit (provision) | $ (783) | $ 1,430 | $ (99) | $ (3,614) | $ 11,012 | $ (17) | $ (74) | $ 0 | $ 96 | $ 0 | $ (79) | $ (16) | $ (3,066) | $ 10,921 | $ 1 |
INCOME TAXES - COMPANY'S NET DE
INCOME TAXES - COMPANY'S NET DEFERRED TAX ASSETS AND LIABILITIES (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Sep. 30, 2017 |
Deferred tax assets: | ||
Stock-based compensation | $ 3,067 | $ 3,671 |
Net operating loss carryforwards | 8,568 | 3,453 |
Research credit carryforwards | 3,890 | 3,171 |
AMT credit carryforwards | 0 | 392 |
Foreign net operating losses | 0 | 386 |
Other, net | 354 | 770 |
Total deferred assets | 15,879 | 11,843 |
Deferred tax liabilities: | ||
Intangibles | (181) | (393) |
Foreign deferred liabilities | (8,032) | (280) |
Net deferred tax asset | 7,666 | 11,170 |
Valuation allowance for net deferred tax assets | (472) | (105) |
Net deferred tax asset | $ 7,194 | $ 11,065 |
INCOME TAXES - ADDITIONAL INFOR
INCOME TAXES - ADDITIONAL INFORMATION (Details) - USD ($) | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Oct. 01, 2017 | |
Income Taxes [Line Items] | |||
Blended tax rate | 24.30% | ||
Reduction in net deferred tax asset balance | $ 4,900,000 | ||
Net change increase (decrease) in total valuation allowance | 400,000 | $ (10,100,000) | |
Investment credit carryforwards | $ 3,890,000 | 3,171,000 | |
Research and development credits expiry period beginning year | 2,022 | ||
Research and development credit carryforwards | $ 1,900,000 | ||
Unrecognized tax benefits that will impact the company's effective tax rate | 1,300,000 | ||
Accrued interest or penalties | 0 | ||
ASU 2016-09 | |||
Income Taxes [Line Items] | |||
Cumulative-effect adjustment from the adoption of ASU 2016-09 | 8,255,000 | ||
Retained Earnings | ASU 2016-09 | |||
Income Taxes [Line Items] | |||
Cumulative-effect adjustment from the adoption of ASU 2016-09 | $ 8,255,000 | $ 8,300,000 | |
Research and development credit | |||
Income Taxes [Line Items] | |||
Investment credit carryforwards | 2,200,000 | ||
Federal | |||
Income Taxes [Line Items] | |||
Net operating loss carryforwards | $ 27,600,000 | ||
Operating loss carryforwards, expiration start year | 2,032 | ||
State | |||
Income Taxes [Line Items] | |||
Net operating loss carryforwards | $ 30,200,000 | ||
Net operating loss carryforwards will begin to expire | 2,028 |
INCOME TAXES - INCOME TAXES COM
INCOME TAXES - INCOME TAXES COMPUTED USING FEDERAL INCOME TAX RATE (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Income Tax Disclosure [Abstract] | |||||||||||||||
Amount computed using statutory rate | $ 2,122 | $ (1,078) | $ (666) | ||||||||||||
Net change in valuation allowance for net deferred tax assets | (367) | 10,058 | 1,889 | ||||||||||||
AMT and other | (191) | 20 | (148) | ||||||||||||
Foreign rate differential | 22 | (169) | (70) | ||||||||||||
Non-deductible items | (276) | (370) | (1,136) | ||||||||||||
State income tax | 50 | (34) | (15) | ||||||||||||
Foreign net operating loss | 0 | 0 | 147 | ||||||||||||
Impact of tax reform on deferred taxes | (4,901) | 0 | 0 | ||||||||||||
Research and development credits | 475 | 2,494 | 0 | ||||||||||||
Income tax benefit (provision) | $ (783) | $ 1,430 | $ (99) | $ (3,614) | $ 11,012 | $ (17) | $ (74) | $ 0 | $ 96 | $ 0 | $ (79) | $ (16) | $ (3,066) | $ 10,921 | $ 1 |
INCOME TAXES - UNRECOGNIZED TAX
INCOME TAXES - UNRECOGNIZED TAX BENEFITS ROLLFORWARD (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Gross unrecognized tax benefits at the beginning of the year | $ 1,181 | $ 0 | $ 0 |
Additions from tax positions taken in the current year | 140 | 140 | 0 |
Additions from tax positions taken in prior years | 0 | 1,041 | 0 |
Reductions from tax positions taken in prior years | 0 | 0 | 0 |
Tax settlements | 0 | 0 | 0 |
Gross unrecognized tax benefits at end of the year | 1,321 | $ 1,181 | $ 0 |
Unrecognized tax benefits that will impact the company's effective tax rate | $ 1,300 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - ADDITIONAL INFORMATION (Details) £ in Thousands, ft² in Thousands, € in Millions | Jun. 11, 2018USD ($) | Jun. 11, 2018EUR (€) | May 03, 2018USD ($) | Sep. 30, 2018USD ($)ft² | Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2018EUR (€)ft² | Sep. 30, 2018GBP (£)ft² |
Loss Contingencies [Line Items] | ||||||||
Company contribution, percent of designated deferral of eligible compensation | 25.00% | |||||||
Company contribution, percent of employee compensation eligible for company match | 6.00% | |||||||
Employer contribution amount | $ 123,000 | $ 121,000 | $ 91,000 | |||||
Annual base rent | 1,000,000 | |||||||
Tenant improvement allowances | 1,000,000 | |||||||
Unamortized lease incentives | 800,000 | |||||||
Rent expense for the Company's operating leases | 1,700,000 | $ 600,000 | $ 300,000 | |||||
Line of Credit | Revolving Credit Facility | ||||||||
Loss Contingencies [Line Items] | ||||||||
Maximum borrowing capacity | $ 10,000,000 | |||||||
Interest rate floor | 0.045 | |||||||
Minimum unrestricted cash and unused borrowing capacity | $ 15,000,000 | |||||||
Adjusted quick ratio requirement | 1.75 | |||||||
Borrowings outstanding | 0 | |||||||
Line of Credit | Revolving Credit Facility | Prime Rate | ||||||||
Loss Contingencies [Line Items] | ||||||||
Basis spread on variable rate | 0.25% | |||||||
NETHERLANDS | ||||||||
Loss Contingencies [Line Items] | ||||||||
Annual base rent | 200,000 | € 0.2 | ||||||
UNITED KINGDOM | ||||||||
Loss Contingencies [Line Items] | ||||||||
Annual base rent | 82,000 | £ 63 | ||||||
Other Current Liabilities | ||||||||
Loss Contingencies [Line Items] | ||||||||
Unamortized lease incentives | 100,000 | |||||||
Other Noncurrent Liabilities | ||||||||
Loss Contingencies [Line Items] | ||||||||
Unamortized lease incentives | $ 700,000 | |||||||
Building | ||||||||
Loss Contingencies [Line Items] | ||||||||
Space area subject to lease (in square feet) | ft² | 29 | 29 | 29 | |||||
ICAR | SPAIN | ||||||||
Loss Contingencies [Line Items] | ||||||||
Annual base rent | $ 100,000 | € 0.1 | ||||||
A2iA | FRANCE | ||||||||
Loss Contingencies [Line Items] | ||||||||
Annual base rent | 400,000 | € 0.4 | ||||||
A2iA | UNITED STATES | ||||||||
Loss Contingencies [Line Items] | ||||||||
Annual base rent | $ 300,000 | |||||||
Global Equity & Corporate Consulting, S.L.- Breach of Services Agreement | Pending Litigation | ICAR | ||||||||
Loss Contingencies [Line Items] | ||||||||
Loss contingency, amount claimed | $ 900,000 | € 0.8 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES - FUTURE ANNUAL MINIMUM RENTAL PAYMENTS PAYABLE (Details) $ in Thousands | Sep. 30, 2018USD ($) |
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | |
2,019 | $ 2,061 |
2,020 | 1,509 |
2,021 | 1,964 |
2,022 | 1,567 |
2,023 | 1,363 |
Thereafter | 942 |
Total | $ 9,406 |
REVENUE AND VENDOR CONCENTRAT_2
REVENUE AND VENDOR CONCENTRATIONS (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Revenue, Major Customer [Line Items] | |||||||||||||||
Revenue | $ 21,037 | $ 16,109 | $ 14,277 | $ 12,136 | $ 12,904 | $ 11,798 | $ 11,419 | $ 9,269 | $ 9,670 | $ 9,105 | $ 8,522 | $ 7,404 | |||
Accounts receivable, net | 16,821 | 7,099 | $ 16,821 | $ 7,099 | |||||||||||
Sales Revenue, Net | Customer Concentration Risk | |||||||||||||||
Revenue, Major Customer [Line Items] | |||||||||||||||
Revenue | $ 20,000 | $ 10,400 | $ 6,300 | ||||||||||||
Sales Revenue, Net | Customer Concentration Risk | Customer One | |||||||||||||||
Revenue, Major Customer [Line Items] | |||||||||||||||
Total revenue, percentage | 22.00% | 23.00% | 18.00% | ||||||||||||
Sales Revenue, Net | Customer Concentration Risk | Customer Two | |||||||||||||||
Revenue, Major Customer [Line Items] | |||||||||||||||
Total revenue, percentage | 10.00% | ||||||||||||||
Sales Revenue, Net | Geographic Concentration Risk | International | |||||||||||||||
Revenue, Major Customer [Line Items] | |||||||||||||||
Total revenue, percentage | 27.00% | 14.00% | 15.00% | ||||||||||||
Accounts Receivable | Customer Concentration Risk | |||||||||||||||
Revenue, Major Customer [Line Items] | |||||||||||||||
Accounts receivable, net | $ 5,700 | $ 1,300 | $ 1,000 | $ 5,700 | $ 1,300 | $ 1,000 |
QUARTERLY INFORMATION (UNAUDI_3
QUARTERLY INFORMATION (UNAUDITED) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||
Revenue | $ 21,037 | $ 16,109 | $ 14,277 | $ 12,136 | $ 12,904 | $ 11,798 | $ 11,419 | $ 9,269 | $ 9,670 | $ 9,105 | $ 8,522 | $ 7,404 | |||
Cost of revenue | 2,674 | 2,678 | 1,717 | 1,617 | 1,138 | 1,182 | 830 | 891 | 940 | 793 | 720 | 942 | |||
Operating expenses | 19,729 | 16,294 | 13,825 | 12,831 | 10,033 | 10,132 | 9,365 | 9,050 | 7,889 | 7,618 | 7,171 | 6,804 | |||
Operating income (loss) | (1,366) | (2,863) | (1,265) | (2,312) | 1,733 | 484 | 1,224 | (672) | 841 | 694 | 631 | (342) | $ (7,806) | $ 2,769 | $ 1,824 |
Other income (expense), net | 22 | (1,351) | 204 | 190 | 121 | 149 | 67 | 65 | 23 | 45 | 30 | 36 | (935) | 402 | 134 |
Income tax benefit (provision) | (783) | 1,430 | (99) | (3,614) | 11,012 | (17) | (74) | 0 | 96 | 0 | (79) | (16) | (3,066) | 10,921 | 1 |
Net income (loss) | $ (2,127) | $ (2,784) | $ (1,160) | $ (5,736) | $ 12,866 | $ 616 | $ 1,217 | $ (607) | $ 960 | $ 739 | $ 582 | $ (322) | $ (11,807) | $ 14,092 | $ 1,959 |
Net income (loss) per share: | |||||||||||||||
Net income (loss) per share—basic (in dollars per share) | $ (0.06) | $ (0.08) | $ (0.03) | $ (0.17) | $ 0.38 | $ 0.02 | $ 0.04 | $ (0.02) | $ 0.03 | $ 0.02 | $ 0.02 | $ (0.01) | $ (0.33) | $ 0.43 | $ 0.06 |
Shares used in calculating net income (loss) per share—basic (in shares) | 37,858 | 36,190 | 34,976 | 34,207 | 33,522 | 33,024 | 32,786 | 32,377 | 32,086 | 31,823 | 31,326 | 31,094 | 35,811 | 33,083 | 31,587 |
Net income (loss) per share—diluted (in dollars per share) | $ (0.06) | $ (0.08) | $ (0.03) | $ (0.17) | $ 0.35 | $ 0.02 | $ 0.03 | $ (0.02) | $ 0.03 | $ 0.02 | $ 0.02 | $ (0.01) | $ (0.33) | $ 0.40 | $ 0.06 |
Shares used in calculating net income (loss) per share—diluted (in shares) | 37,858 | 36,190 | 34,976 | 34,207 | 36,251 | 35,610 | 34,815 | 32,377 | 34,860 | 34,532 | 33,134 | 31,094 | 35,811 | 35,537 | 33,819 |