Cover
Cover - shares | 9 Months Ended | |
Jun. 30, 2023 | Sep. 30, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-35231 | |
Entity Registrant Name | MITEK SYSTEMS, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 87-0418827 | |
Entity Address, Address Line One | 600 B Street, Suite 100 | |
Entity Address, City or Town | San Diego, | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 92101 | |
City Area Code | 619 | |
Local Phone Number | 269-6800 | |
Title of 12(b) Security | Common Stock, par value $0.001 per share | |
Trading Symbol | MITK | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 45,589,575 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q3 | |
Entity Central Index Key | 0000807863 | |
Current Fiscal Year End Date | --09-30 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2023 | Sep. 30, 2022 | |
Current assets: | |||
Cash and cash equivalents | $ 87,490 | $ 32,059 | |
Short-term investments | 40,651 | 58,268 | |
Accounts receivable, net | 37,616 | 27,874 | |
Contract assets, current portion | 7,420 | 6,273 | |
Prepaid expenses | 2,227 | 2,000 | |
Other current assets | 2,828 | 2,622 | |
Total current assets | 178,232 | 129,096 | |
Long-term investments | 2,815 | 10,633 | |
Property and equipment, net | 3,010 | 3,493 | |
Right-of-use assets | 4,335 | 5,155 | |
Intangible assets, net | 70,414 | 75,756 | |
Goodwill | 131,535 | 120,186 | |
Deferred income tax assets | 18,553 | 10,245 | |
Contract assets, non-current portion | 7,050 | 4,218 | |
Other non-current assets | 1,533 | 1,628 | |
Total assets | 417,477 | 360,410 | |
Current liabilities: | |||
Accounts payable | 7,733 | 4,974 | |
Accrued payroll and related taxes | 9,548 | 10,393 | |
Accrued liabilities | 1,231 | 1,155 | |
Accrued interest payables | [1] | 673 | 202 |
Income tax payables | [1] | 10,059 | 194 |
Deferred revenue, current portion | 12,786 | 13,394 | |
Lease liabilities, current portion | 2,123 | 2,110 | |
Acquisition-related contingent consideration | 8,013 | 5,920 | |
Restructuring accrual | 0 | 901 | |
Other current liabilities | [1] | 1,521 | 1,254 |
Total current liabilities | 53,687 | 40,497 | |
Convertible senior notes | 133,579 | 127,970 | |
Deferred revenue, non-current portion | 2,056 | 1,775 | |
Lease liabilities, non-current portion | 2,968 | 4,106 | |
Deferred income tax liabilities, non current portion | 15,970 | 14,132 | |
Other non-current liabilities | 1,573 | 1,613 | |
Total liabilities | 209,833 | 190,093 | |
Stockholders’ equity: | |||
Preferred stock, $0.001 par value, 1,000,000 shares authorized, none issued and outstanding | 0 | 0 | |
Common stock, $0.001 par value, 120,000,000 and 120,000,000 shares authorized, 45,507,401 and 44,680,429 issued and outstanding, as of June 30, 2023 and September 30, 2022, respectively | 45 | 44 | |
Additional paid-in capital | 225,633 | 216,493 | |
Accumulated other comprehensive loss | (9,504) | (28,219) | |
Accumulated deficit | (8,530) | (18,001) | |
Total stockholders’ equity | 207,644 | 170,317 | |
Total liabilities and stockholders’ equity | $ 417,477 | $ 360,410 | |
[1]September 30, 2022 condensed consolidated balance sheet reflects reclassifications to conform to the current year presentation. |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Jun. 30, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Sep. 30, 2021 |
Statement of Financial Position [Abstract] | ||||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | |
Preferred stock, shares authorized (in shares) | 1,000,000 | 1,000,000 | 1,000,000 | |
Preferred stock, shares issued (in shares) | 0 | 0 | 0 | |
Preferred stock, shares outstanding (in shares) | 0 | 0 | 0 | |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 120,000,000 | 120,000,000 | 120,000,000 | 120,000,000 |
Common stock, shares issued (in shares) | 45,507,401 | 44,680,429 | 44,396,263 | 44,168,745 |
Common stock, shares outstanding (in shares) | 45,507,401 | 44,680,429 | 44,396,263 | 44,168,745 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE INCOME (LOSS) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Revenue | ||||
Total revenue | $ 43,070 | $ 39,195 | $ 134,896 | $ 105,178 |
Operating costs and expenses | ||||
Selling and marketing | 10,296 | 11,216 | 29,434 | 28,859 |
Research and development | 7,461 | 8,411 | 22,504 | 21,914 |
General and administrative | 11,588 | 6,591 | 30,126 | 18,628 |
Amortization and acquisition-related costs | 6,207 | 4,493 | 15,302 | 10,777 |
Restructuring costs | 14 | 1,807 | 2,000 | 1,807 |
Total operating costs and expenses | 41,278 | 38,302 | 116,045 | 96,775 |
Operating income | 1,792 | 893 | 18,851 | 8,403 |
Interest expense | 2,362 | 2,077 | 6,662 | 6,125 |
Other income (expense), net | 925 | 89 | 1,719 | (2) |
Income (loss) before income taxes | 355 | (1,095) | 13,908 | 2,276 |
Income tax benefit (provision) | (783) | 880 | (4,437) | 1,068 |
Net income (loss) | $ (428) | $ (215) | $ 9,471 | $ 3,344 |
Net income per share – basic (in dollars per share) | $ (0.01) | $ 0 | $ 0.21 | $ 0.07 |
Net income per share - diluted (in dollars per share) | $ (0.01) | $ 0 | $ 0.20 | $ 0.07 |
Shares used in calculating net income (loss) per share – basic (in shares) | 46,002 | 44,669 | 45,625 | 44,721 |
Shares used in calculating net income (loss) per share – diluted (in shares) | 46,473 | 45,224 | 46,210 | 45,793 |
Other comprehensive income (loss) | ||||
Net income (loss) | $ (428) | $ (215) | $ 9,471 | $ 3,344 |
Foreign currency translation adjustment | 2,219 | (13,595) | 17,944 | (16,724) |
Unrealized gain (loss) on investments | 123 | 909 | 771 | (189) |
Other comprehensive income (loss) | 1,914 | (12,901) | 28,186 | (13,569) |
Software and hardware | ||||
Revenue | ||||
Total revenue | 21,447 | 19,515 | 73,083 | 53,110 |
Operating costs and expenses | ||||
Cost of revenue | 428 | 508 | 816 | 1,196 |
Services and other | ||||
Revenue | ||||
Total revenue | 21,623 | 19,680 | 61,813 | 52,068 |
Operating costs and expenses | ||||
Cost of revenue | $ 5,284 | $ 5,276 | $ 15,863 | $ 13,594 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Treasury Stock | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss) |
Common Stock, Beginning Balance (in shares) at Sep. 30, 2021 | 44,168,745 | 44,169,000 | ||||
Treasury Stock, Beginning Balance (in shares) at Sep. 30, 2021 | (8,000) | |||||
Beginning Balance at Sep. 30, 2021 | $ 192,830 | $ 44 | $ 199,935 | $ (140) | $ (6,066) | $ (943) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Exercise of stock options (in shares) | 35,000 | |||||
Exercise of stock options | 239 | 239 | ||||
Settlement of restricted stock units (in shares) | 1,015,000 | |||||
Settlement of restricted stock units | 0 | $ 1 | (1) | |||
Issuance of common stock under employee stock purchase plan (in shares) | 71,000 | |||||
Issuance of common stock under employee stock purchase plan | 923 | 923 | ||||
Stock-based compensation expense | 10,117 | 10,117 | ||||
Repurchases and retirement of common stock (in shares) | (894,000) | 8,000 | ||||
Repurchases and retirements of common stock | (14,828) | $ (1) | (1) | $ 140 | (14,966) | |
Components of other comprehensive income (loss): | ||||||
Net income (loss) | 3,344 | 3,344 | ||||
Currency translation adjustment | (16,724) | (16,724) | ||||
Change in unrealized gain (loss) on investments | (189) | (189) | ||||
Other comprehensive income (loss) | $ (13,569) | |||||
Common Stock, Ending Balance (in shares) at Jun. 30, 2022 | 44,396,263 | 44,396,000 | ||||
Treasury Stock, Ending Balance (in shares) at Jun. 30, 2022 | 0 | |||||
Ending Balance at Jun. 30, 2022 | $ 175,712 | $ 44 | 211,212 | $ 0 | (17,688) | (17,856) |
Common Stock, Beginning Balance (in shares) at Mar. 31, 2022 | 44,344,000 | |||||
Beginning Balance at Mar. 31, 2022 | 184,892 | $ 44 | 207,491 | (17,473) | (5,170) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Exercise of stock options (in shares) | 10,000 | |||||
Exercise of stock options | 33 | 33 | ||||
Settlement of restricted stock units (in shares) | 42,000 | |||||
Stock-based compensation expense | 3,688 | 3,688 | ||||
Components of other comprehensive income (loss): | ||||||
Net income (loss) | (215) | (215) | ||||
Currency translation adjustment | (13,595) | (13,595) | ||||
Change in unrealized gain (loss) on investments | 909 | 909 | ||||
Other comprehensive income (loss) | $ (12,901) | |||||
Common Stock, Ending Balance (in shares) at Jun. 30, 2022 | 44,396,263 | 44,396,000 | ||||
Treasury Stock, Ending Balance (in shares) at Jun. 30, 2022 | 0 | |||||
Ending Balance at Jun. 30, 2022 | $ 175,712 | $ 44 | 211,212 | $ 0 | (17,688) | (17,856) |
Common Stock, Beginning Balance (in shares) at Sep. 30, 2022 | 44,680,429 | 44,680,000 | ||||
Beginning Balance at Sep. 30, 2022 | $ 170,317 | $ 44 | 216,493 | (18,001) | (28,219) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Exercise of stock options (in shares) | 97,802 | 99,000 | ||||
Exercise of stock options | $ 732 | 732 | ||||
Settlement of restricted stock units (in shares) | 656,000 | |||||
Settlement of restricted stock units | 0 | $ 1 | (1) | |||
Issuance of common stock under employee stock purchase plan (in shares) | 72,000 | |||||
Issuance of common stock under employee stock purchase plan | 619 | 619 | ||||
Stock-based compensation expense | 7,790 | 7,790 | ||||
Components of other comprehensive income (loss): | ||||||
Net income (loss) | 9,471 | 9,471 | ||||
Currency translation adjustment | 17,944 | 17,944 | ||||
Change in unrealized gain (loss) on investments | 771 | 771 | ||||
Other comprehensive income (loss) | $ 28,186 | |||||
Common Stock, Ending Balance (in shares) at Jun. 30, 2023 | 45,507,401 | 45,507,000 | ||||
Ending Balance at Jun. 30, 2023 | $ 207,644 | $ 45 | 225,633 | (8,530) | (9,504) | |
Common Stock, Beginning Balance (in shares) at Mar. 31, 2023 | 45,410,000 | |||||
Beginning Balance at Mar. 31, 2023 | 203,030 | $ 45 | 222,933 | (8,102) | (11,846) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Exercise of stock options (in shares) | 13,000 | |||||
Exercise of stock options | 56 | 56 | ||||
Settlement of restricted stock units (in shares) | 84,000 | |||||
Stock-based compensation expense | 2,644 | 2,644 | ||||
Components of other comprehensive income (loss): | ||||||
Net income (loss) | (428) | (428) | ||||
Currency translation adjustment | 2,219 | 2,219 | ||||
Change in unrealized gain (loss) on investments | 123 | 123 | ||||
Other comprehensive income (loss) | $ 1,914 | |||||
Common Stock, Ending Balance (in shares) at Jun. 30, 2023 | 45,507,401 | 45,507,000 | ||||
Ending Balance at Jun. 30, 2023 | $ 207,644 | $ 45 | $ 225,633 | $ (8,530) | $ (9,504) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | ||
Operating activities: | |||
Net income | $ 9,471 | $ 3,344 | |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Stock-based compensation expense | 7,790 | 10,117 | |
Amortization of intangible assets | 13,270 | 9,176 | |
Depreciation and amortization | 1,187 | 1,064 | |
Amortization of investment premiums & other | (64) | 1,348 | |
Accretion and amortization on debt securities | 5,609 | 5,239 | |
Net changes in estimated fair value of acquisition-related contingent consideration | 2,093 | (1,278) | |
Deferred taxes | (8,246) | (1,705) | |
Changes in assets and liabilities, net of acquisitions: | |||
Accounts receivable | (9,014) | (12,233) | |
Contract assets | (3,758) | (1,737) | |
Other assets | (73) | (848) | |
Accounts payable | 2,633 | 1,147 | |
Accrued payroll and related taxes | (1,099) | (2,643) | |
Income taxes payable | [1] | 9,865 | 85 |
Deferred revenue | (752) | 1,917 | |
Restructuring accrual | (971) | 1,900 | |
Other liabilities | [1] | 172 | 1,120 |
Net cash provided by operating activities | 28,113 | 16,013 | |
Investing activities: | |||
Purchases of investments | (23,723) | (47,818) | |
Sales and maturities of investments | 50,000 | 173,198 | |
Acquisitions, net of cash acquired | 0 | (126,607) | |
Purchases of property and equipment, net | (656) | (929) | |
Net cash provided by (used in) investing activities | 25,621 | (2,156) | |
Financing activities: | |||
Proceeds from the issuance of equity plan common stock | 1,351 | 1,162 | |
Repurchases and retirements of common stock | 0 | (14,828) | |
Payment of acquisition-related contingent consideration | 0 | (6,770) | |
Acquisition-related shares issued | 0 | (1,041) | |
Principal payments on other borrowings | (36) | (36) | |
Net cash provided by (used in) financing activities | 1,315 | (21,513) | |
Foreign currency effect on cash and cash equivalents | 382 | (1,113) | |
Net increase (decrease) in cash and cash equivalents | 55,431 | (8,769) | |
Cash and cash equivalents at beginning of period | 32,059 | 30,312 | |
Cash and cash equivalents at end of period | 87,490 | 21,543 | |
Supplemental disclosures of cash flow information: | |||
Issuance of common stock for acquisition-related contingent consideration | 0 | 2,722 | |
Cash paid for interest | 829 | 597 | |
Cash paid for income taxes | 3,074 | 819 | |
Supplemental disclosures of non-cash investing and financing activities: | |||
Reclassification of convertible senior notes hedge and embedded conversion derivative to additional paid-in capital | 0 | 42,821 | |
Unrealized holding gain (loss) on available for sale investments | $ 771 | $ (189) | |
[1]March 31, 2022 condensed consolidated statement of cash flows reflects reclassifications to conform to the current year presentation. |
NATURE OF OPERATIONS AND SUMMAR
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 1. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Operations Mitek Systems, Inc. (“Mitek,” the “Company,” “we,” “us,” and “our”) is a leading innovator of mobile image capture and digital identity verification solutions. We are a software development company with expertise in artificial intelligence and machine learning. We currently serve more than 7,900 financial services organizations and leading marketplace and financial technology (“fintech”) brands around the globe. Customers count on Mitek to deliver trusted and convenient online experiences, detect and reduce fraud, and document Know Your Customer (“KYC”) and Anti-Money Laundering (“AML”) regulatory compliance. The Company’s solutions are embedded in native mobile apps and web browsers to facilitate digital consumer experiences. Mitek’s identity verification and authentication technologies and services make it possible for banks, financial services organizations and the world’s leading marketplace and sharing platforms to verify an individual’s identity during digital transactions, allowing them to reduce risk and meet regulatory requirements. The Company’s advanced mobile deposit system enables secure, fast and convenient deposit services. Thousands of organizations use Mitek solutions to optimize the security of mobile check deposits, new account openings and more. Mitek 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. Our partner sales strategy includes channel partners who are financial services technology providers and identity verification providers. These partners integrate our products into their solutions to meet the needs of their customers, typically provisioning Mitek services through their respective platforms. Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited condensed consolidated financial statements of the Company as of June 30, 2023 have been prepared in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X and, accordingly, they do not include all information and footnote disclosures required by accounting principles generally accepted in the U.S. (“GAAP”). The Company believes the footnotes and other disclosures made in the financial statements are adequate for a fair presentation of the results of the interim periods presented. The financial statements include all adjustments (solely of a normal recurring nature) which are, in the opinion of management, necessary to make the information presented not misleading. You should read these financial statements and the accompanying notes in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2022, filed with the U.S. Securities and Exchange Commission (“SEC”) on July 31, 2023. In connection with the preparation of the Company’s financial statements for the fiscal year ended September 30, 2022, the Company noted that certain revenue contracts and other items were improperly accounted for during three and six months ended March 31, 2022 and the three and nine months ended June 30, 2022. Specifically, the Company (a) did not appropriately (i) recognize revenue on its multiyear term licenses; (ii) recognize revenue related to guaranteed minimums and overages for software as a service (“SaaS”) product sales; (iii) cut off revenue related to term license sales; (iv) capitalize certain commissions paid to the HooYu Ltd (“HooYu”) sales team subsequent to the acquisition of HooYu in March 2022; (v) recognize a lease liability and right-of-use asset related to the office lease assumed in the HooYu acquisition; and (vi) recognize certain liabilities upon the acquisition of HooYu that were not valid liabilities; and (b) misclassified certain employee costs related to cloud operations as research and development expense instead of cost of revenue. Refer to Note 13. Restatement of Previously Reported Unaudited Interim Consolidated Financial Statements for further details. Results for the nine months ended June 30, 2023 are not necessarily indicative of results for any other interim period or for a full fiscal year. Principles of Consolidation The condensed 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. 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, useful lives of intangible assets, fair value of debt derivatives, standalone selling price related to revenue recognition, contingent consideration, and income taxes. Reclassifications A reclassification has been made to the prior periods’ condensed consolidated financial statements in order to conform to the current period presentation. Accrued interest payable and income tax payables were included in the other current liabilities line in the condensed consolidated balance sheet as of September 30, 2022, however, they have been presented separately in the condensed consolidated balance sheet as of June 30, 2023 so that the total of the other current liabilities line is less than five percent of total current liabilities. Net Income (Loss) Per Share For the three and nine months ended June 30, 2023 and 2022, the following potentially dilutive common shares were excluded from the calculation of net income (loss) per share, as they would have been antidilutive ( amounts in thousands ): Three Months Ended June 30, Nine Months Ended June 30, 2023 2022 2023 2022 Stock options 443 540 453 484 RSUs 1,256 853 1,138 861 ESPP common stock equivalents 295 148 89 36 Performance options 783 678 772 550 Performance RSUs 728 492 228 279 Convertible senior notes 7,448 7,448 7,448 7,448 Warrants 7,448 7,448 7,448 7,448 Total potentially dilutive common shares outstanding 18,401 17,607 17,576 17,106 The calculation of basic and diluted net income (loss) per share is as follows ( amounts in thousands, except per share data) : Three Months Ended June 30, Nine Months Ended June 30, 2023 2022 As Restated 2023 2022 As Restated Net income (loss) $ (428) $ (215) $ 9,471 $ 3,344 Weighted-average shares outstanding—basic 46,002 44,669 45,625 44,721 Common stock equivalents 471 555 585 1,072 Weighted-average shares outstanding—diluted 46,473 45,224 46,210 45,793 Net income (loss) per share: Basic $ (0.01) $ (0.00) $ 0.21 $ 0.07 Diluted $ (0.01) $ (0.00) $ 0.20 $ 0.07 Other Borrowings The Company has certain loan agreements with Spanish government agencies which were assumed when the Company acquired ICAR Vision Systems, S.L. ("ICAR") in 2017. These agreements have repayment periods of five Recently Adopted Accounting Pronouncements The Company did not adopt any new accounting pronouncements in the quarter ended June 30, 2023. Change in Significant Accounting Policy The Company’s significant accounting policies are disclosed in the Company’s audited condensed consolidated financial statements and related notes thereto included in the Company’s Annual Report on Form 10-K for the year ended September 30, 2022, filed with the SEC on July 31, 2023. There have been no changes to these accounting policies through June 30, 2023. Recently Issued Accounting Pronouncements In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (ASU 2020-04) and also issued subsequent amendments to the initial guidance (collectively, Topic 848). Topic 848 provides optional guidance for contract modifications and certain hedging relationships associated with the transition from reference rates that are expected to be discontinued. The Company will adopt Topic 848 when the relevant contracts are modified upon transition to alternative reference rates. The Company does not expect the adoption of Topic 848 will have a material impact on the condensed consolidated financial statements. No other new accounting pronouncement issued or effective during the three months ended June 30, 2023 had, or are expected to have, a material impact on the Company’s condensed consolidated financial statements. |
REVENUE RECOGNITION
REVENUE RECOGNITION | 9 Months Ended |
Jun. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE RECOGNITION | 2. REVENUE RECOGNITION Nature of Goods and Services The following is a description of principal activities from which the Company generates its revenue. Contracts with customers are evaluated on a contract-by-contract basis as contracts may include multiple types of goods and services as described below. Software and Hardware Software and hardware revenue is generated from on premise software license sales, as well as sales of hardware scanner boxes and on premise appliance products. Software is typically sold as a time-based license with a term of one Services and Other Services and other revenue is generated from the sale of software as a service (“SaaS”) products and services, maintenance associated with the sale of on premise software licenses and consulting and professional services. The Company’s SaaS offerings give customers the option to be charged upon their incurred usage in arrears (“Pay as You Go”), or commit to a minimum spend over their contracted period, with the ability to purchase unlimited additional transactions above the minimum during the contract term. Revenue related to Pay as You Go contracts are recognized based on the customer’s actual usage, in the period of usage. For contracts which include a minimum commitment, the Company is standing ready to provide as many transactions as desired by the customer throughout the contract term, and revenue is recognized on a ratable basis over the contract period including an estimate of usage above the minimum commitment. Usage above minimum commitment is estimated by looking at historical usage, expected volume, and other factors to project out for the remainder of the contract term. The estimated usage-based revenues are constrained to the amount the Company expects to be entitled to receive in exchange for providing access to its platform. If professional services are deemed to be distinct, revenue is recognized as services are performed. The Company does not view the signing of the contract or the provision of initial setup services as discrete earnings events that are distinct. Significant Judgments in Application of the Guidance The Company uses the following methods, inputs, and assumptions in determining amounts of revenue to recognize: Identification of Performance Obligations For contracts that contain multiple performance obligations, which include combinations of software licenses, maintenance, and services, the Company accounts for individual goods or services as a separate performance obligation if they are distinct. The good or service is distinct if the good or service is separately identifiable from other items in the arrangement and if a customer can benefit from it on its own or with other resources that are readily available to the customer. If these criteria are not met, the promised goods or services are accounted for as a combined performance obligation. Determination of Transaction Price The transaction price is determined based on the consideration to which the Company will be entitled in exchange for transferring products or services to the customer. The Company includes any fixed charges within its contracts as part of the total transaction price. To the extent that variable consideration is not constrained, the Company includes an estimate of the variable amount, as appropriate, within the total transaction price and updates its assumptions over the duration of the contract. As a practical expedient, the Company does not adjust the transaction price for the effects of a significant financing component if, at contract inception, the period between customer payment and the transfer of goods or services is expected to be one year or less. Assessment of Estimates of Variable Consideration Many of the Company’s contracts with customers contain some component of variable consideration; however, variable consideration will only be included in the transaction price to the extent it is probable that a significant reversal of revenues recognized will not occur when the uncertainty associated with the variable consideration is resolved. The Company may constrain the estimated transaction price in the event of a high degree of uncertainty as to the final consideration amount owed because of an extended length of time over which the fees may be adjusted or due to uncertainty surrounding collectability. The Company estimates variable consideration in its contracts primarily using the expected value method as the Company believes this method represents the most appropriate estimate for this consideration, based on historical usage trends, the individual contract considerations, and its best judgment at the time. Allocation of Transaction Price The transaction price, including any discounts, is allocated between separate goods and services in a contract that contains multiple performance obligations based on their relative standalone selling prices. The standalone selling prices are based on the prices at which the Company separately sells each good or service. For items that are not sold separately, the Company estimates the standalone selling prices using available information such as market conditions and internally approved pricing guidelines. In certain situations, primarily transactional SaaS revenue described above, the Company allocates variable consideration to a series of distinct goods or services within a contract. The Company allocates variable payments to one or more, but not all, of the distinct goods or services or to a series of distinct goods or services in a contract when (i) the variable payment relates specifically to the Company’s efforts to transfer the distinct good or service and (ii) the variable payment is for an amount that depicts the amount of consideration to which the Company expects to be entitled in exchange for transferring the promised goods or services to its customer. Disaggregation of Revenue The following table presents the Company's revenue disaggregated by major product category ( amounts in thousands ): Three Months Ended June 30, Nine Months Ended June 30, 2023 2022 As Restated 2023 2022 As Restated Major product category Deposits software and hardware $ 18,300 $ 16,955 $ 64,979 $ 46,574 Deposits services and other 6,504 5,010 18,866 15,670 Deposits revenue 24,804 21,965 83,845 62,244 Identity verification software and hardware 3,147 2,560 8,104 6,536 Identity verification services and other 15,119 14,670 42,947 36,398 Identity verification revenue 18,266 17,230 51,051 42,934 Total revenue $ 43,070 $ 39,195 $ 134,896 $ 105,178 Contract Balances The following table provides information about contract assets and contract liabilities from contracts with customers ( amounts in thousands ): June 30, 2023 September 30, 2022 Contract assets, current $ 7,420 $ 6,273 Contract assets, non-current 7,050 4,218 Contract liabilities (deferred revenue), current 12,786 13,394 Contract liabilities (deferred revenue), non-current 2,056 1,775 Contract assets, reported within a separate line in current assets and the other non-current assets line in the condensed consolidated balance sheets, primarily result from when the right to consideration is conditional upon factors other than the passage of time. Contract liabilities primarily relate to advance consideration received from customers (deferred revenue), for which transfer of control occurs, and therefore revenue is recognized as services are provided. Contract balances are reported in a net contract asset or liability position on a contract-by-contract basis at the end of each reporting period. The Company recognized $1.8 million and $1.2 million of revenue during the three months ended June 30, 2023 and 2022, respectively, and $11.7 million and $11.1 million during the nine months ended June 30, 2023 and 2022, respectively, which was included in the contract liability balance at the beginning of each such period. Unbilled receivables are included within contract assets on the condensed consolidated balance sheets and were $6.1 million and $1.9 million as of June 30, 2023 and September 30, 2022, respectively. Contract Costs Contract costs included in other current and non-current assets on the condensed consolidated balance sheets totaled $2.3 million and $2.4 million as of June 30, 2023 and September 30, 2022, respectively. Contract costs are amortized based on the transfer of goods or services to which the asset relates. The amortization period also considers expected customer lives and whether the asset relates to goods or services transferred under a specific anticipated contract. These costs are included in selling and marketing expenses in the condensed consolidated statement of operations and other comprehensive income (loss) and totaled $0.4 million and $0.3 million during the three months ended June 30, 2023 and 2022, respectively, and $1.1 million and $1.0 million during the nine months ended June 30, 2023 and 2022, respectively. There were no impairment losses recognized during both the nine months ended June 30, 2023 and 2022 related to capitalized contract costs. |
BUSINESS COMBINATIONS
BUSINESS COMBINATIONS | 9 Months Ended |
Jun. 30, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
BUSINESS COMBINATIONS | 3. BUSINESS COMBINATIONS Acquisition of HooYu Ltd On March 23, 2022, the Company completed the acquisition (the “HooYu Acquisition”) of HooYu Ltd (“HooYu”) pursuant to the Purchase Agreement (the “Purchase Agreement”) dated March 23, 2022, by and among the Company and certain persons identified in the Purchase Agreement (the “Sellers”). Pursuant to the Purchase Agreement, the Company, among other things, acquired 100% of the outstanding share capital of HooYu, a leading global customer onboarding platform designed to increase the integrity of KYC and maximize the success of customer onboarding. As consideration for the HooYu Acquisition, the Company paid aggregate consideration in the amount of $129.1 million (the “Closing Consideration”), as such amount may be adjusted for transaction expenses and indebtedness. Pursuant to the Purchase Agreement, $1.6 million was withheld as a reduction to the Closing Consideration and was retained by the Company for the final working capital adjustments and indemnification of certain tax matters under the Purchase Agreement. The Company incurred $3.2 million of expense in connection with the acquisition primarily related to legal fees, outside service costs, foreign currency and realized losses on investments, and travel expense, which are included in amortization and acquisition-related costs in the condensed consolidated statements of operations and other comprehensive income (loss). On March 23, 2022, using cash on hand, the Company transferred an aggregate of $127.5 million to the Sellers and its third-party legal and investment advisors, net of cash acquired of $0.5 million. In July 2022 the Company paid an additional $0.4 million to the Sellers in settling final working capital. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed from the HooYu Acquisition as of June 30, 2023 ( amounts in thousands ): HooYu Accounts receivable $ 1,234 Property, plant, and equipment 504 Other current assets 630 Intangible assets 73,100 Goodwill 74,206 Current liabilities (2,264) Deferred revenue (2,612) Deferred income tax liabilities (16,896) Net assets acquired $ 127,902 The goodwill recognized is due to expected market participant 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 were estimated to 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 from the HooYu Acquisition as of June 30, 2023 ( amounts in thousands, except for years ): Amortization Period Amount assigned Completed technologies 7 years $ 61,400 Customer relationships 5 years 5,000 Trade name 5 years 6,100 Covenants not to compete 3 years 600 Total intangible assets acquired $ 73,100 The following unaudited pro forma financial information should not be taken as representative of the Company’s future consolidated results of operations and includes adjustments for the amortization expense related to the identified intangible assets. The following table summarizes the Company’s unaudited pro forma financial information and is presented as if the HooYu Acquisition occurred on October 1, 2021 ( amounts shown in thousands ): Three months ended June 30, 2022 Nine months ended June 30, 2022 Pro forma revenue $ 39,195 $ 110,915 Pro forma net income (loss) $ (215) $ (6,311) The following table summarizes the results of HooYu that are included in the Company’s consolidated results ( amounts shown in thousands ): Three Months Ended June 30, Nine Months Ended June 30, 2023 2022 As Restated 2023 2022 As Restated Revenue $ 4,100 $ 2,653 $ 10,124 $ 2,958 Net income (loss) $ (3,028) $ (3,764) $ (10,798) $ (4,015) |
RESTRUCTURING
RESTRUCTURING | 9 Months Ended |
Jun. 30, 2023 | |
Restructuring and Related Activities [Abstract] | |
RESTRUCTURING | 4. RESTRUCTURING In order to streamline the organization and focus resources going forward, the Company undertook a strategic restructuring in June and November 2022, which included a reduction in workforce. Restructuring costs consist of employee severance obligations and other related costs. The following table summarizes changes in the restructuring accrual during the nine months ended June 30, 2023 (amounts in thousands) : Balance at September 30, 2022 $ 901 Additional costs incurred 1,986 Payments (2,942) Foreign currency effect on the restructuring accrual 55 Balance at June 30, 2023 $ — |
INVESTMENTS
INVESTMENTS | 9 Months Ended |
Jun. 30, 2023 | |
Investments, Debt and Equity Securities [Abstract] | |
INVESTMENTS | 5. INVESTMENTS The following tables summarize investments by type of security as of June 30, 2023 and September 30, 2022 (amounts in thousands): June 30, 2023: Cost Gross Unrealized Gains Gross Unrealized Losses Fair Market Value Available-for-sale securities: U.S. Treasury, short-term $ 22,135 $ — $ (96) $ 22,039 Commercial paper, short-term 6,200 — (45) 6,155 Corporate debt securities, short-term 12,534 — (77) 12,457 U.S. Treasury, long-term 1,375 — (79) 1,296 Corporate debt securities, long-term 1,594 — (75) 1,519 Total $ 43,838 $ — $ (372) $ 43,466 September 30, 2022: Cost Gross Unrealized Gains Gross Unrealized Losses Fair Market Value Available-for-sale securities: U.S. Treasury, short-term $ 6,016 $ — $ (134) $ 5,882 Foreign government and agency securities, short-term 2,865 — (38) $ 2,827 Commercial paper, short-term 18,245 — (223) 18,022 Corporate debt securities, short-term 32,065 — (528) 31,537 U.S. Treasury, long-term 3,431 — (210) 3,221 Corporate debt securities, long-term 7,692 — (280) 7,412 Total $ 70,314 $ — $ (1,413) $ 68,901 All of the Company’s investments are designated as available-for-sale debt securities. As of June 30, 2023 and September 30, 2022, the Company’s short-term investments have maturity dates of less than one year from the balance sheet date and the Company’s long-term investments have maturity dates of greater than one year from the balance sheet date. The contractual maturities of the available-for-sale securities held at June 30, 2023 are as follows: $40.7 million within one year and $2.8 million beyond one year to five years. As of September 30, 2022, the contractual maturities of the available-for-sale securities were $58.3 million within one year and $10.6 million beyond one year to five years. The following tables represent the fair value hierarchy of the Company’s investments and acquisition-related contingent consideration as of June 30, 2023 and September 30, 2022, respectively (amounts in thousands) : June 30, 2023: 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 $ 22,039 $ 22,039 $ — $ — Commercial paper 6,155 — 6,155 — Corporate debt securities 12,457 — 12,457 — Total short-term investments at fair value 40,651 22,039 18,612 — Long-term investments: U.S. Treasury 1,296 1,296 — — Corporate debt securities 1,519 — 1,519 — Total long-term investments at fair value 2,815 1,296 1,519 — Total assets at fair value $ 43,466 $ 23,335 $ 20,131 $ — Liabilities: Acquisition-related contingent consideration $ 8,013 $ — $ 8,013 $ — Total liabilities at fair value $ 8,013 $ — $ 8,013 $ — September 30, 2022: 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 $ 5,882 $ 5,882 $ — $ — Commercial paper 18,022 — 18,022 — Foreign government and agency securities 2,827 — 2,827 — Corporate debt securities 31,537 — 31,537 — Total short-term investments at fair value 58,268 5,882 52,386 — Long-term investments: U.S. Treasury 3,221 3,221 — — Corporate debt securities 7,412 — 7,412 — Total long-term investments at fair value 10,633 3,221 7,412 — Total assets at fair value $ 68,901 $ 9,103 $ 59,798 $ — Liabilities: Acquisition-related contingent consideration $ 5,920 $ — $ — $ 5,920 Total liabilities at fair value $ 5,920 $ — $ — $ 5,920 • Level 1: Includes investments in U.S. Government and agency securities, which are valued based on recently executed transactions in the same or similar securities. • Level 2: Convertible Senior Notes and corporate debt securities. Corporate debt securities are valued using 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. On February 5, 2021, the Company issued the 2026 Notes as further described in Note 9. Concurrently with the issuance of the 2026 Notes, the Company entered into the Notes Hedge and Warrant Transactions which in combination are intended to reduce the potential dilution from the conversion of the 2026 Notes (see Note 9). The fair value of the Notes Hedge and the embedded conversion derivative were estimated using a Black-Scholes model. Based on the fair value hierarchy, the Company classified the Notes Hedge and the embedded conversion derivative as Level 2 as significant inputs are observable, either directly or indirectly. The significant inputs and assumptions used in the models to calculate the fair value of the derivatives include the Common Stock price, exercise price of the derivatives, risk-free interest rate, volatility, annual coupon rate and remaining contractual term. As of June 30, 2023, total acquisition-related contingent consideration of $8.0 million is recorded in acquisition-related contingent consideration, in the condensed consolidated balance sheets. The Company recorded the acquisition date fair value based on the likelihood of contingent earnout payments related to the Company’s acquisition of ID R&D Inc., as part of the consideration transferred. The earnout payments consist of cash payments and issuances of Common Stock and are subsequently remeasured to fair value each reporting date. The Company used a Monte Carlo Simulation to estimate fair value of total contingent consideration. Additionally, for contingent consideration to be settled in a variable number of shares of Common Stock, the Company used the most recent Mitek share price as reported by the Nasdaq Capital Market to determine the fair value of the shares expected to be issued. The Company previously classified the contingent consideration as Level 3, due to the lack of relevant observable inputs and market activity. The second earnout period ended on May 28, 2023 and the valued recorded as of June 30, 2023 is based on the calculated final payout and the Company reclassified the contingent consideration as Level 2 during the third quarter of fiscal 2023. The following table includes a roll-forward of the contingent consideration liability during the nine months ended June 30, 2023 (amounts in thousands) : Balance at September 30, 2022 $ 5,920 Expenses recorded due to changes in fair value 2,093 Balance at June 30, 2023 $ 8,013 The following tables summarize the quantitative information including the unobservable inputs related to our acquisition-related contingent consideration as follows (amounts in thousands) : Fair Value at September 30, 2022 Valuation Technique Unobservable Input Input Used $ 5,920 Monte Carlo simulation Weighted-average cost of capital 14.80 % Revenue weight-average cost of capital 4.40 % Revenue volatility 0.20 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 9 Months Ended |
Jun. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | 6. GOODWILL AND INTANGIBLE ASSETS Goodwill The Company had a goodwill balance of $131.5 million at June 30, 2023, representing the excess of costs over fair value of assets of businesses acquired. The following table summarizes changes in the balance of goodwill during the nine months ended June 30, 2023 (amounts shown in thousands) : Balance at September 30, 2022 $ 120,186 Foreign currency effect on goodwill 11,349 Balance at June 30, 2023 $ 131,535 Intangible Assets Intangible assets include the value assigned to purchased completed technology, customer relationships, trade names and covenants not to compete. The estimated useful lives for all of these intangible assets range from three (amounts in thousands, except for years): June 30, 2023: Weighted Average Amortization Period (in years) Cost Accumulated Amortization Net Completed technologies 6.9 $ 95,761 $ 34,585 $ 61,176 Customer relationships 4.7 25,168 20,832 4,336 Trade names 5.0 7,088 2,518 4,570 Covenants not to compete 3.0 600 268 332 Total intangible assets $ 128,617 $ 58,203 $ 70,414 September 30, 2022: Weighted Average Amortization Period (in years) Cost Accumulated Amortization Net Completed technologies 6.9 $ 95,761 $ 32,265 $ 63,496 Customer relationships 4.7 25,168 18,241 6,927 Trade names 5.0 7,088 2,174 4,914 Covenants not to compete 3.0 600 181 419 Total intangible assets $ 128,617 $ 52,861 $ 75,756 Amortization expense related to acquired intangible assets was $4.3 million and $4.7 million for the three months ended June 30, 2023 and 2022, respectively, and $13.3 million and $9.2 million during the nine months ended June 30, 2023 and, 2022, respectively, and is recorded within amortization and acquisition-related costs on the condensed consolidated statements of operations and other comprehensive income (loss). The estimated future amortization expense related to intangible assets for each of the five succeeding fiscal years is expected to be as follows (amounts in thousands): Estimated Future Amortization Expense 2023 - remaining 3,835 2024 15,050 2025 13,787 2026 12,560 2027 11,410 Thereafter 13,772 Total $ 70,414 |
STOCKHOLDERS_ EQUITY
STOCKHOLDERS’ EQUITY | 9 Months Ended |
Jun. 30, 2023 | |
Equity [Abstract] | |
STOCKHOLDERS’ EQUITY | 7. STOCKHOLDERS’ EQUITY Stock-Based Compensation Expense The following table summarizes stock-based compensation expense related to restricted stock units (“RSUs”), stock options, and Employee Stock Purchase Plan (“ESPP”) shares, which was allocated as follows (amounts in thousands) : Three Months Ended June 30, Nine Months Ended June 30, 2023 2022 2023 2022 Cost of revenue $ 124 $ 82 $ 316 $ 249 Selling and marketing 885 1,273 2,423 3,351 Research and development 644 1,071 2,097 2,875 General and administrative 991 1,262 2,954 3,642 Stock-based compensation expense included in expenses $ 2,644 $ 3,688 $ 7,790 $ 10,117 No options were granted in either of the nine months ended June 30, 2023 or 2022. As of June 30, 2023, the Company had $22.7 million of unrecognized compensation expense related to outstanding stock options and RSUs expected to be recognized over a weighted-average period of approximately 2.4 years. 2020 Incentive Plan In January 2020, the Company’s Board of Directors (the “Board”) adopted the Mitek Systems, Inc. 2020 Incentive Plan (the “2020 Plan”) upon the recommendation of the Compensation Committee of the Board. On March 4, 2020, the Company’s stockholders approved the 2020 Plan. The total number of shares of Common Stock reserved for issuance under the 2020 Plan is 4,500,000 shares plus such number of shares, not to exceed 107,903, as remained available for issuance under the 2002 Stock Option Plan, 2006 Stock Option Plan, 2010 Stock Option Plan, and 2012 Incentive Plan (collectively, the “Prior Plans”) as of January 17, 2020, plus any shares underlying awards under the Prior Plans that are terminated, forfeited, cancelled, expire unexercised or are settled in cash after January 17, 2020. As of June 30, 2023, (i) 2,503,543 RSUs and 808,446 performance-based restricted stock unit awards (“Performance RSUs”) were outstanding under the 2020 Plan, (ii) 1,193,194 shares of Common Stock were reserved for future grants under the 2020 Plan, and (iii) stock options to purchase an aggregate of 435,240 shares of Common Stock and 102,900 RSUs were outstanding under the Prior Plans. On October 2, 2023, the Company held an annual meeting of its stockholders (the “Annual Meeting”). At the Annual Meeting, the Company’s stockholders approved an amendment and restatement of the 2020 Plan to increase the number of shares authorized for issuance thereunder by 5,108,000 shares (the 2020 Plan as so amended and restated, the “A&R 2020 Plan”). The A&R 2020 Plan had been previously approved, subject to stockholder approval, by the Company’s Board of Directors (the “Board”), upon recommendation of the Compensation Committee of the Board, on August 9, 2023. A summary of the A&R 2020 Plan was included in the Company’s definitive proxy statement for the Annual Meeting filed with the U.S. Securities and Exchange Commission on August 22, 2023, as supplemented and amended on September 19, 2023 (the “Proxy Statement”). Employee Stock Purchase Plan In January 2018, the Board adopted the 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 June 30, 2023, (i) 679,364 shares have been issued to participants pursuant to the ESPP and (ii) 320,636 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 certain 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 $0.1 million in stock-based compensation expense related to the ESPP in each of the three months ended June 30, 2023 and 2022. The Company recognized $0.2 million and $0.4 million in stock-based compensation expense related to the ESPP in the nine months ended June 30, 2023 and 2022, respectively. 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 to increase the number of shares of Common Stock available for future grants. The total number of shares of Common Stock reserved for issuance thereunder is 1,500,000 shares. The Director Plan expired on December 31, 2022. As of June 30, 2023, (i) 259,513 RSUs were outstanding under the Director Plan and (ii) no 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 equity plans during the nine months ended June 30, 2023: Number of Shares Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term ( in years ) Aggregate Intrinsic Value ( in thousands ) Outstanding at September 30, 2022 781,092 $ 7.46 3.7 $ 1,512 Granted — $ — Exercised (97,802) $ 7.49 Canceled (30,871) $ 9.49 Outstanding at June 30, 2023 652,419 $ 7.36 4.5 2,273 Vested and Expected to Vest at June 30, 2023 652,419 $ 7.36 4.5 2,273 Exercisable at June 30, 2023 643,018 $ 7.32 4.5 2,261 The Company recognized $29,000 and $0.1 million in stock-based compensation expense related to outstanding stock options during the three months ended June 30, 2023 and 2022, respectively. The Company recognized $0.1 million and $0.4 million in stock-based compensation expense related to outstanding stock options during the nine months ended June 30, 2023 and 2022, respectively. As of June 30, 2023, the Company had no unrecognized compensation expense related to outstanding stock options. 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 nine months ended June 30, 2023 and 2022 was $0.7 million and $0.3 million, respectively. There were no options granted during either of the nine months ended June 30, 2023 or 2022. Restricted Stock Units The following table summarizes RSU activity under the Company’s equity plans during the nine months ended June 30, 2023: Number of Shares Weighted-Average Fair Market Value Per Share Outstanding at September 30, 2022 2,441,677 $ 12.29 Granted 929,268 10.04 Settled (633,364) 11.37 Canceled (610,230) 12.57 Outstanding at June 30, 2023 2,127,351 11.50 The cost of RSUs is determined using the fair value of Common Stock on the award date, and the compensation expense is recognized ratably over the vesting period. The Company recognized $1.9 million and $2.5 million in stock-based compensation expense related to outstanding RSUs in the three months ended June 30, 2023 and 2022, respectively. The Company recognized $5.4 million and $7.1 million in stock-based compensation expense related to outstanding RSUs during the nine months ended June 30, 2023 and 2022, respectively. As of June 30, 2023, the Company had $17.5 million of unrecognized compensation expense related to outstanding RSUs expected to be recognized over a weighted-average period of approximately 2.6 years. Performance Restricted Stock Units The following table summarizes Performance RSU activity under the Company’s equity plans during the nine months ended June 30, 2023: Number of Shares Weighted-Average Fair Market Value Per Share Outstanding at September 30, 2022 919,456 $ 13.43 Granted 325,837 10.23 Settled (24,723) 9.21 Canceled (241,008) 13.20 Outstanding at June 30, 2023 979,562 12.53 The cost of Performance RSUs is determined using a Monte Carlo simulation to estimate the fair value on the award date, and the compensation expense is recognized ratably over the vesting period. The Company recognized $0.6 million and $0.9 million in stock-based compensation expense related to outstanding Performance RSUs in the three months ended June 30, 2023 and 2022, respectively. The Company recognized $2.0 million and $2.1 million in stock-based compensation expense related to outstanding Performance RSUs during the nine months ended June 30, 2023 and 2022, respectively. As of June 30, 2023, the Company had $5.0 million of unrecognized compensation expense related to outstanding RSUs expected to be recognized over a weighted-average period of approximately 1.9 years. Performance Options On November 6, 2018, as an inducement grant pursuant to Nasdaq Listing Rule 5635(c)(4), the Company’s Chief Executive Officer was granted performance options (the “Performance Options”) to purchase up to 800,000 shares of Common Stock at an exercise price of $9.50 per share, the closing market price for a share of Common Stock on the date of the grant. During the fiscal year ended September 30, 2021, the performance conditions were achieved. In November 2021, the time vesting condition was met and the performance options vested in full. The Company did not recognize any stock-based compensation expense related to outstanding Performance Options in either of the three months ended June 30, 2023 or 2022. The Company did not recognize any stock-based compensation expense related to outstanding performance options for the nine months ended June 30, 2023 and recognized $0.1 million during the nine months ended June 30, 2022. Share Repurchase Program On June 15, 2021, the Board authorized and approved a share repurchase program for up to $15 million of the currently outstanding shares of our Common Stock. The share repurchase program was completed during the second quarter of fiscal 2022 and as such the Company made no purchases during the three months ended June 30, 2023. The Company made purchases of $14.8 million, or approximately 886,204 shares, during the nine months ended June 30, 2022 at an average price of $16.73 per share and subsequently retired the shares. The share repurchase program expired on June 30, 2022 and as such no purchases were made after this date. The timing, price and volume of repurchases were based on market conditions, relevant securities laws and other factors. The repurchases were made from time to time, through solicited or unsolicited transactions in the open market, in privately negotiated transactions or pursuant to a share repurchase trading plan. |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Jun. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | 8. INCOME TAXES The Company’s tax provision for interim periods is determined using an estimate of the annual effective tax rate, adjusted for discrete items arising in that quarter. In each quarter, management updates the estimate of the annual effective tax rate, and any changes are recorded in a cumulative adjustment in that quarter. The quarterly tax provision and quarterly estimate of the annual effective tax rate are subject to significant volatility due to several factors, including management’s ability to accurately predict the portion of income (loss) before income taxes in multiple jurisdictions, the tax effects of our stock-based compensation awards, and the effects of acquisitions and the integration of those acquisitions. For the three and nine months ended June 30, 2023, the Company recorded an income tax provision of $0.8 million and $4.4 million, respectively, which yielded an effective tax rate of 221% and 32%, respectively. For the three and nine months ended June 30, 2022, the Company recorded an income tax benefit of $0.9 million and $1.1 million, respectively, which yielded an effective tax rate of 80% and negative 47%, respectively. The difference between the U.S. federal statutory tax rate and the Company’s effective tax rate for the three and nine months ended June 30, 2023 was primarily due to a mix of worldwide income, the impact of non-deductible executive compensation, the impact of state taxes, and federal and state research and development credits on the tax provision. The difference between the U.S. federal statutory tax rate and the Company’s effective tax rate for the three and nine months ended June 30, 2022 was primarily due to excess tax benefits of stock compensation as well as the impact of foreign and state taxes. |
CONVERTIBLE SENIOR NOTES
CONVERTIBLE SENIOR NOTES | 9 Months Ended |
Jun. 30, 2023 | |
Debt Disclosure [Abstract] | |
CONVERTIBLE SENIOR NOTES | 9. CONVERTIBLE SENIOR NOTES The carrying values of the 0.75% convertible notes due 2026 issued by the Company in an initial aggregate principal amount of $155.3 million (the “2026 Notes”) are as follows ( amounts in thousands ): 2026 Notes: June 30, 2023 September 30, 2022 Principal amount $ 155,250 $ 155,250 Less: unamortized discount and issuance costs, net of amortization (21,671) (27,280) Carrying amount $ 133,579 $ 127,970 In February 2021, the Company issued $155.3 million aggregate principal amount of the 2026 Notes (including the Additional Notes, as defined below). The 2026 Notes are senior unsecured obligations of the Company. The 2026 Notes were issued pursuant to an Indenture, dated February 5, 2021 (the “Indenture”), between the Company and UMB Bank, National Association, as trustee. The Indenture includes customary covenants and sets forth certain events of default after which the 2026 Notes may be declared immediately due and payable and sets forth certain types of bankruptcy or insolvency events of default involving the Company after which the 2026 Notes become automatically due and payable. The Company granted the initial purchasers of the 2026 Notes (collectively, the “Initial Purchasers”) a 13-day option to purchase up to an additional $20.25 million aggregate principal amount of the 2026 Notes (the “Additional Notes”), which was exercised in full. The 2026 Notes were purchased in a transaction that was completed on February 5, 2021. As of January 13, 2023 (“Date of Noncompliance”), the Company was not in compliance with certain of the covenants in the Indenture as a result of the Company not timely filing its Form 10-K for the fiscal year ended September 30, 2022 (“Form 10-K”) and the Form 10-Q for the quarter ended December 31, 2022 (“Q1 Form 10-Q”) with the SEC. As a result of not being in compliance, the 2026 Notes began to accrue additional special interest of 0.25% of the outstanding principal of the 2026 Notes for the 90 days after the Date of Noncompliance and 0.50% of the outstanding principal of the 2026 Notes for the 91st through 180th day after the Date of Noncompliance. The Company subsequently did not timely file its Form 10-Q for the quarter ended March 31, 2023 (“Q2 Form 10-Q”) and its Form 10-Q for the quarter ended June 30, 2023 (“Q3 Form 10-Q”). The Company filed its Form 10-K with the SEC on July 31, 2023, its Q1 Form 10-Q with the SEC on September 6, 2023, and its Q2 Form 10-Q with the SEC on September 29, 2023. As of June 30, 2023, the Company was not in compliance with certain covenants in the Indenture as a result of not timely filing its Form 10-K, Q1 Form 10-Q, Q2 Form 10-Q, and Q3 Form 10-Q. As of October 26, 2023, the Company is in compliance with the covenants in the Indenture as all of its required annual and quarterly reports have been filed with the SEC. The 2026 Notes will mature on February 1, 2026, unless earlier redeemed, repurchased or converted. The 2026 Notes bear interest from February 5, 2021 at a rate of 0.750% per year payable semiannually in arrears on February 1 and August 1 of each year, beginning on August 1, 2021. The 2026 Notes will be convertible at the option of the holders at any time prior to the close of business on the business day immediately preceding August 1, 2025, only under the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on June 30, 2021, if the last reported sale price per share of Common Stock exceeds 130% of the conversion price for each of at least 20 trading days during the 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter; (2) during five consecutive business days immediately after any five consecutive trading day period (such five consecutive trading day period, the “measurement period”) in which the trading price per $1,000 principal amount of notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price per share of the Common Stock on such trading day and the conversion rate on such trading day; (3) upon the occurrence of certain corporate events or distributions on the Common Stock. On or after August 1, 2025, until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert all or any portion of their 2026 Notes, in multiples of $1,000 principal amount, at the option of the holder regardless of the foregoing circumstances. Upon conversion, the Company may satisfy its conversion obligation by paying and/or delivering, as the case may be, cash and, if applicable at the Company’s election, shares of the Common Stock, based on the applicable conversion rate(s); provided that the Company will be required to settle conversions solely in cash unless and until the Company (i) receives stockholder approval to increase the number of authorized shares of the Common Stock and (ii) reserves such amount of shares of the Common Stock for future issuance as required pursuant to the Indenture that governs the 2026 Notes. The conversion rate for the 2026 Notes will initially be 47.9731 shares of the Common Stock per $1,000 principal amount of 2026 Notes, which is equivalent to an initial conversion price of approximately $20.85 per share of the Common Stock. The initial conversion price of the 2026 Notes represents a premium of approximately 37.5% to the $15.16 per share last reported sale price of the Common Stock on February 2, 2021. The conversion rate is subject to adjustment under certain circumstances in accordance with the terms of the Indenture. The net proceeds from this offering were approximately $149.7 million, after deducting the Initial Purchasers’ discounts and commissions and the Company’s estimated offering expenses related to the offering. The Company used approximately $9.3 million of the net proceeds from the offering to pay the cost of the Notes Hedge, after such cost is partially offset by the proceeds from the Warrant Transactions described below. The Initial Purchasers exercised their option to purchase Additional Notes in full and the Company used a portion of the net proceeds from the sale of such Additional Notes to enter into additional Notes Hedges, after such cost is partially offset by the proceeds from the additional Warrant Transactions, with the Option Counterparties (as defined below). The Company intends to use the remainder of the net proceeds from the offering for general corporate purposes, which may include working capital, capital expenditures, and potential acquisitions and strategic transactions. As of June 30, 2023, the number of authorized and unissued shares of Common Stock that are not reserved for other purposes is sufficient to settle the 2026 Notes into equity. Accordingly, the Company may settle conversions of notes through payment or delivery, as the case may be, of cash, shares of Common Stock or a combination of cash and shares of Common Stock, at the Company’s election. In accounting for the issuance of the 2026 Notes, the conversion option of the 2026 Notes was deemed an embedded derivative requiring bifurcation from the 2026 Notes (“host contract”) and separate accounting as an embedded derivative liability, as a result of the Company not having the necessary number of authorized but unissued shares of its Common Stock available to settle the conversion option of the 2026 Notes in shares. The proceeds from the 2026 Notes were first allocated to the embedded derivative liability and the remaining proceeds were then allocated to the host contract. On February 5, 2021, the fair value of the embedded derivative liability representing the conversion option was $33.2 million and the remaining $116.5 million was allocated to the host contract. The difference between the principal amount of the 2026 Notes and the fair value of the host contract (the “debt discount”) is amortized to interest expense using the effective interest method over the term of the 2026 Notes. In the second quarter of fiscal 2022, the stockholders of the Company approved an increase to the number of authorized shares of Common Stock, to an amount sufficient to settle the conversion of the 2026 Notes. As a result of the increase to the number of authorized shares of Common Stock, the Company reclassified the embedded conversion derivative to additional paid-in capital. As of June 30, 2023, the embedded conversion derivative is included in additional paid-in capital in the condensed consolidated balance sheets and will not be remeasured provided the requirements to qualify for the scope exception in Accounting Standards Codification (“ASC”) 815-10-15-74(a) continue to be met. Debt issuance costs for the issuance of the 2026 Notes were approximately $5.5 million, consisting of initial purchasers' discount and other issuance costs. In accounting for the transaction costs, the Company allocated the total amount incurred to the 2026 Notes. Transaction costs were recorded as debt issuance cost (presented as contra debt in the condensed consolidated balance sheet) and are being amortized using the effective interest method to interest expense over the term of the 2026 Notes. The following table presents the total amount of interest cost recognized relating to the 2026 Notes ( amounts in thousands ): Three Months Ended June 30, Nine Months Ended June 30, 2023 2022 2023 2022 Contractual interest expense $ 453 $ 290 $ 1,054 $ 886 Amortization of debt discount and issuance costs 1,908 1,787 5,609 5,239 Total interest expense recognized $ 2,361 $ 2,077 $ 6,663 $ 6,125 The derived effective interest rate on the 2026 Notes host contract was determined to be 6.71%, which remains unchanged from the date of issuance. The remaining unamortized debt discount was $21.7 million as of June 30, 2023, and will be amortized over approximately 2.6 years. Convertible Senior Notes Hedge and Warrants In connection with the pricing of the 2026 Notes, the Company entered into the Notes Hedge with Bank of America, N.A., Jefferies International Limited and Goldman Sachs & Co. LLC (the “Option Counterparties”). The Notes Hedge provided the Company with the option to acquire, on a net settlement basis, approximately 7.4 million shares of Common Stock at a strike price of $20.85, which is equal to the number of shares of Common Stock that notionally underlie and correspond to the conversion price of the 2026 Notes. The Company also entered into Warrant Transactions with the Option Counterparties relating to the same number of shares of the Common Stock, subject to customary anti-dilution adjustments. The strike price of the Warrant Transactions is $26.53 per share, which represents a 75.0% premium to the last reported sale price of the Common Stock on the Nasdaq Capital Market on February 2, 2021, and is subject to certain adjustments under the terms of the Warrant Transactions. The Company was initially required to settle the Notes Hedge in cash, as they did not qualify for the scope exception for contracts involving an issuer’s own equity in ASC 815 and were accounted for as a derivative asset. Upon initial purchase, the Notes Hedge was recorded in convertible senior notes hedge at $33.2 million in our condensed consolidated balance sheets. In the second quarter of fiscal 2022, the stockholders of the Company approved an increase to the number of authorized shares of Common Stock, to an amount sufficient to settle the conversion of the 2026 Notes. As a result of the increase to the number of authorized shares of Common Stock, the Company reclassified the Notes Hedge to additional paid-in capital. As of June 30, 2023, the Notes Hedge is included in additional paid-in capital in the condensed consolidated balance sheet and will not be remeasured provided the requirements to qualify for the scope exception in ASC 815-10-15-74(a) continue to be met and the Company had not purchased any shares under the Notes Hedge. As a result of the Warrant Transactions, the Company is required to recognize incremental dilution of earnings per share to the extent the average share price is over $26.53 for any fiscal quarter. During the three months ended June 30, 2023, there was no |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Jun. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 10. COMMITMENTS AND CONTINGENCIES Legal Proceedings Claim Against ICAR On June 11, 2018, a claim was filed before Court of First Instance 5 (Juzgado de Primera Instancia) of Barcelona, Spain, the first instance court in the Spanish civil procedure system, against ICAR. The claim, also directed towards Mr. Xavier Codó Grasa, the former controlling shareholder of ICAR and its current General Manager at the time the claim was filed, was brought by the Spanish company Global Equity & Corporate Consulting, S.L. for an alleged breach by ICAR of a services agreement entered into in the context of the sale of all of the shares in ICAR to Mitek Holding B.V., a wholly owned subsidiary of the Company. ICAR responded to the claim on September 7, 2018. After several postponements as a consequence of the COVID-19 pandemic, on March 3, 2022 the trial was held. On June 7, 2022, the Court of First Instance 5 of Barcelona issued a judgment which fully upheld the claim and declared that Mr. Xavier Codó Grasa and ICAR had to pay the amount and damages claimed by Global Equity & Corporate Consulting, S.L. equal to €0.8 million (or $0.8 million as of June 30, 2023), plus the interest accrued and the legal fees. ICAR and Mr Xavier Codó Grasa submitted an appeal against this judgment on July 13, 2022. Global Equity & Corporate Consulting, S.L. filed an opposition to that appeal on September 2, 2022. The next procedural step will be the voting and issuing of the ruling on the appeal. Global Equity & Corporate Consulting, S.L. requested the provisional enforcement of the judgment, asking ICAR and Mr. Xavier Codó Grasa to deposit the damages awarded plus 30% to cover the possible interests that may continue to accrue during the appeal (€1.1 million in total) with the Court. According 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. As a consequence, the escrow (€0.9 million) was released pursuant to the provisional enforcement of the judgment, and Mr. Xavier Codó Grasa deposited the remaining €0.2 million. Global Equity & Corporate Consulting, S.L. also requested that ICAR and Mr. Xavier Codó Grasa bear the costs of the provisional enforcement. This amounted to €16,475 for the accrued interests and €10,995 as legal costs. ICAR and Mr. Xavier Codó Grasa have complied with this request, having such amounts charged to the damages deposited with the Court. Third Party Claims Against the Company’s Customers The Company receives indemnification demands from end-user customers who received third party patentee offers to license patents and allegations of patent infringement. Some of the offers and allegations have resulted in ongoing litigation. The Company is not a party to any such litigation. License offers to and infringement allegations against the Company’s end-customers were made by Lighthouse Consulting Group, LLC; Lupercal, LLC; Pebble Tide, LLC; Dominion Harbor Group, LLC; and IP Edge, LLC, which appear to be non-practicing entities (“NPEs”)—often called “patent trolls”—and not the Company’s competitors. These NPEs may seek to extract settlements from our end-customers, resulting in new or renewed indemnification demands to the Company. At this time, the Company does not believe it is obligated to indemnify any customers or end-customers resulting from license offers or patent infringement allegations by the companies listed above. However, the Company could incur substantial costs if it is determined that it is required to indemnify any customers or end-customers in connection with these offers or allegations. Given the potential for impact to other customers and the industry, the Company is actively monitoring the offers, allegations and any resulting litigation. On July 7, 2018, United Services Automobile Association (“USAA”) filed a lawsuit against Wells Fargo Bank, N.A. (“Wells Fargo”) in the Eastern District of Texas alleging that Wells Fargo’s remote deposit capture systems (which in part utilize technology provided by the Company to Wells Fargo through a partner) infringe four USAA owned patents related to mobile deposits (the “First Wells Lawsuit”). On August 17, 2018, USAA filed a second lawsuit (the “Second Wells Lawsuit” and together with the First Wells Lawsuit, the “Wells Lawsuits”) against Wells Fargo in the Eastern District of Texas asserting that an additional five patents owned by USAA were infringed by Wells Fargo’s remote deposit capture system. In neither lawsuit was the Company named in the Complaint as an infringer nor at any time did USAA allege specifically that the Company’s products by themselves infringed any of the asserted patents. Subsequently, on November 6, 2019, a jury in the First Wells Lawsuit found that Wells Fargo willfully infringed at least one of the Subject Patents (as defined below) and awarded USAA $200 million in damages. In the Second Wells Lawsuit, USAA dropped two of the patents from the litigation, and the judge in the case found that one of the remaining three patents was invalid. On January 10, 2020, a jury in the Second Wells Lawsuit found that Wells Fargo willfully infringed at least one of the patents at issue in that case and awarded USAA $102 million in damages. No Mitek product was accused of infringing either of the two patents in question in the Second Wells Lawsuit as the litigation involved broad banking processes and not the Company’s specific mobile deposit features. USAA and Wells Fargo subsequently reached a settlement, and on April 1, 2021 the Court granted the parties’ joint motion and stipulation of dismissal of the Wells Lawsuits with prejudice. Wells Fargo filed petitions for Inter Partes Review (“IPR”) with the Patent Trial and Appeal Board (“PTAB”) challenging the validity of the four patents in the First Wells Lawsuit. Three of those four petitions were instituted, while one (relating to U.S. Patent No. 9,818,090 (“the ‘090 Patent”)) was denied institution. On November 24, 2020, and January 26, 2021, the PTAB issued final written decisions determining that Wells Fargo had not demonstrated by a preponderance of the evidence that any claims of the U.S. Patent Nos. 8,977,571 (“the ‘571 Patent”), 8,699,779 (“the ‘779 Patent”), or 9,336,517 (“the ‘517 Patent”) were unpatentable. On September 30, 2020, USAA filed suit against PNC Bank (the “First PNC Lawsuit”) in the Eastern District of Texas alleging infringement of U.S. Patent Nos. 10,482,432 (“the ‘432 Patent”) and 10,621,559. These two patents are continuations of an asserted patent in the Second Wells Lawsuit and relate to similar subject matter. On October 19, 2020, PNC Bank’s integration partner, NCR Corporation, sent an indemnification demand to the Company requesting indemnification from all claims related to the First PNC Lawsuit. The complaint against PNC Bank does not claim that any Company product infringes any of the asserted patents. At this time, the Company does not believe it is obligated to indemnify NCR Corporation or end-users of NCR Corporation resulting from the patent infringement allegations by USAA. On December 4, 2020, USAA filed an amended complaint against PNC Bank also asserting two patents at issue in the First Wells Lawsuit—the ’779 Patent and the ’571 Patent. On February 2, 2021, NCR Corporation sent a second indemnification demand to the Company requesting indemnification of the claims described in the amended complaint. On March 31, 2021, USAA filed another suit against PNC Bank in the Eastern District of Texas alleging infringement of two patents from the Second Wells Lawsuit, U.S. Patent Nos. 10,013,605 (“the ‘605 Patent”) and 10,013,681 (“the ‘681 Patent”) (the “Second PNC Lawsuit”). On July 7, 2021, USAA filed a third lawsuit against PNC Bank (the “Third PNC Lawsuit” and together with the First PNC Lawsuit and the Second PNC Lawsuit, the “PNC Lawsuits”) asserting infringement of U.S. Patents 10,769,598; 10,402,638; and 9,224,136. A jury trial was held in May 2022 on the consolidated First PNC Lawsuit and Second PNC Lawsuit. The jury found that PNC willfully infringed at least one patent claim and awarded USAA $218 million in damages. The Court denied PNC Bank’s equitable defenses and entered a Final Judgment in the consolidated First PNC Lawsuit and Second PNC Lawsuit on August 19, 2022. A jury trial was held in September 2022 on the Third PNC Lawsuit. The jury found that PNC infringed at least one patent claim and awarded USAA $4.3 million in damages. The Court entered a Final Judgment in the Third PNC Lawsuit on February 16, 2023. While neither the Wells Lawsuits nor the PNC Lawsuits name the Company as a defendant, given (among other factors) the Company’s prior history of litigation with USAA and the continued use of the Company’s products by its customers, on November 1, 2019, the Company filed a complaint in the U.S. District Court for the Northern District of California seeking declaratory judgment that its products do not infringe the ’779 Patent, the ’571 Patent, the ’517 Patent, and the ’090 Patent (collectively, the “Subject Patents”). On January 15, 2020, USAA filed motions requesting the dismissal of the declaratory judgement of the Subject Patents and transfer of the case to the Eastern District of Texas, both of which the Company opposed. On April 21, 2020, the Court in the Northern District of California transferred the Company’s declaratory judgement action to the Eastern District of Texas and did not rule on USAA’s motion to dismiss. On April 28, 2021, the Court in the Eastern District of Texas granted USAA’s motion to dismiss the Company’s declaratory judgment action on jurisdictional grounds. The Court’s ruling did not address the merits of the Company’s claim of non-infringement. The Company appealed the ruling on the motion to dismiss and the decision to transfer the declaratory judgment action from California to Texas to the U.S. Court of Appeals for the Federal Circuit. The Federal Circuit heard oral argument on the Company’s appeal on April 4, 2022 and on May 20 2022, issued an opinion vacating and remanding the district court’s order granting USAA’s motion to dismiss. On August 1, 2022, the parties submitted additional briefing to the district court in light of Federal Circuit’s opinion. The court held another hearing on USAA’s motion to dismiss the Company’s declaratory judgment action on jurisdictional grounds, and once again granted USAA’s motion to dismiss on February 23, 2023. The Company timely filed a notice of appeal to the U.S. Court of Appeals for the Federal Circuit. The Company continues to believe that its products do not infringe the Subject Patents and will vigorously defend the right of its end-users to use its technology. In April, May, and June 2020, the Company filed petitions for IPR with the PTAB of the U.S. Patent & Trademark Office challenging the validity of the Subject Patents. On November 6 and 17, 2020, the PTAB decided to exercise its discretion and deny institution of the four petitions due to the alleged relationship between the Company and Wells Fargo, who previously filed petitions for IPR on the Subject Patents. The PTAB did not address the merits of the Company’s petitions or the prior art cited in those petitions. The Company continues to believe that the prior art cited in the petitions renders all the claims of the Subject Patents invalid. On each of December 6, 2020, December 17, 2020, and February 23, 2021, the Company filed requests for rehearing and Precedential Opinion Panel (“POP”) review of the four denied IPR petitions. The Patent Office denied the requests for rehearing and for POP review. In September 2020, the Company filed an additional two petitions for IPR with the U.S. Patent & Trademark Office challenging the validity of the ‘681 Patent and the '605 Patent—two of the patents at issue in the Second Wells Lawsuit. In March 2021, the PTAB decided not to institute the two petitions. On July 7, July 14, and July 21 2021, PNC Bank filed six additional petitions for IPR with the U.S. Patent & Trademark Office challenging the validity of the ’779 Patent, the ’571 Patent, the ‘559 Patent, and the ‘432 Patent. On August 27, 2021, PNC filed two additional petitions for IPR challenging the validity of the ‘681 Patent and the ‘605 Patent. In October and November of 2021, PNC Bank filed four more petitions for IPR challenging the validity of the ‘638 Patent, the ‘136 Patent, and the ‘598 Patent. The Patent Office denied institution with respect to the petitions challenging the ‘432 Patent, the ‘605 Patent, the ‘681 Patent, and the ‘638 Patent, but instituted inter partes review on the petitions relating to the ‘779 Patent, the ‘571 Patent, the ‘559 Patent, and the ‘598 Patent—finding a reasonable likelihood that at least one challenged patent claim was invalid. The U.S. Patent & Trademark Office issued a final written decision in each of the IPRs challenging the ‘779 Patent, the ‘571 Patent, and the ‘559 Patent and found all challenged claims of each patent unpatentable. USAA filed requests for rehearing a requests for POP review. The requests for POP review and rehearing were denied in March 2023. On August 16, 2021, USAA filed suit against BBVA USA (“BBVA”) in the Eastern District of Texas alleging infringement of the same patents at issue in the PNC Lawsuits. While the Company’s IPR petitions were mentioned in the complaint, the Company was not named as a defendant or mentioned in connection with any alleged infringement. BBVA then sent the Company an indemnification demand on September 7, 2021. For the same reasons discussed above in connection with PNC Bank and the PNC Lawsuits, the Company does not believe it is obligated to indemnify BBVA. On June 6, 2022, the Court granted the parties’ request to administratively close the case and stay all deadlines in view of the pending appeal in the PNC Lawsuits. On July 29, 2022, USAA filed another patent infringement lawsuit against Truist Bank (“Truist”) in the Eastern District of Texas. The lawsuit alleges infringement of the ’090 Patent, the ’432 Patent, and the U.S. Patent No. 11,182,753 (“the ’753 Patent”). The Company was not named as a defendant or mentioned in connection with any alleged infringement. On October 5, 2022, Truist’s integration partner, NCR Corporation, sent an indemnification demand to the Company requesting indemnification from all claims related to the lawsuit. For the same reasons discussed above in connection with the PNC Lawsuits, the Company does not believe it is obligated to indemnify NCR Corporation or end-users of NCR Corporation resulting from the patent infringement allegations by USAA. On October 7, 2022, Truist filed a motion to transfer venue to the Western District of North Carolina. The motion was denied on April 8, 2023. On December 30, 2022, Truist filed a motion for leave to file counterclaims against USAA alleging patent infringement of U.S. Patent Nos. 7,336,813; 7,519,214; 8,136,721; and 9,760,797, which was granted on April 8, 2023. On March 13, 2023, USAA moved for leave to file a First Amended Complaint, adding an additional allegation of patent infringement of U.S. Patent No. 11,544,944 (“the ’944 Patent”). On April 4, 2023, Truist sent another indemnification demand to the Company requesting indemnification related to the lawsuit. On May 3, 2023, USAA moved for leave to file a Second Amended Complaint, adding an additional allegation of patent infringement of U.S. Patent No. 11,625,770 (“the ’770 Patent”). On May 30, 2023, Truist sent another indemnification demand to the Company requesting indemnification related to the Second Amended Complaint. On October 6, 2023, the parties filed a Notice of Settlement and Joint Motion and Stipulation of Dismissal. All claims and causes of action between the parties were dismissed with prejudice on October 10, 2023 in view of the settlement. In October and November of 2022, Truist filed a petition for IPR with the U.S. Patent & Trademark Office challenging the validity of the ’090 Patent, the ’432 Patent, and the ’753 Patent. The Patent Office instituted the petitions directed to the ’090 and ’753 Patents, but denied institution of the petition directed to the ’432 Patent. Final written decisions are expected in mid-2024. The Company incurred legal fees of $0.4 million and $1.1 million in the three and nine months ended June 30, 2023, respectively, related to third party claims against our customers. Such fees are included in general and administrative expenses in the condensed consolidated statement of operations and other comprehensive income (loss). Claim Against UrbanFT, Inc. On July 31, 2019, the Company filed a lawsuit against one of its customers, UrbanFT, Inc. (“UrbanFT”) in the United States District Court for the Southern District of California (case No. 19-CV-1432-CAB-DEB). UrbanFT is delinquent in payment and attempted to justify its non-payment by asserting that the Company is or may be infringing on purported UrbanFT patents. The Company filed such lawsuit to collect the delinquent payments and to obtain a declaratory judgment of non-infringement of five purported UrbanFT patents. UrbanFT filed an answer and later asserted infringement of two of the five patents-at-issue in the Company’s lawsuit against UrbanFT. The Company thereafter filed counterclaims seeking a declaration that the two patents now asserted by UrbanFT are invalid in addition to being not infringed. During the course of the litigation, the Company learned that a judgment had been entered against UrbanFT’s affiliates and its predecessor owner in which an Oregon court ordered that the patents in issue revert to a prior owner, Mr. Stevens, because UrbanFT’s affiliates did not pay the purchase price owed to the prior owner. On September 8, 2020, the Company filed a motion for summary judgment on its breach of contract claim. On September 15, 2020, the district court issued an order to show cause regarding jurisdiction over patent issues in light of the Oregon judgment. On December 17, 2020, the district court dismissed Mitek’s claims for declaratory judgment of non-infringement and UrbanFT’s counterclaims for patent infringement and related affirmative defenses based on infringement of the patents for lack of subject matter jurisdiction because UrbanFT does not own the patents. The district court then dismissed the remaining state law claims without prejudice to refiling in state court. On December 18, 2020, the Company filed a new suit against UrbanFT in the Superior Court of the State of California, County of San Diego (case no. 37-2020-00046670-CU-BC-CTL) asserting claims for breach of contract, open book account, and monetary damages. UrbanFT filed an answer and did not assert any cross-claims. The Company filed a motion for summary judgment which was heard on April 15, 2022. The Court granted the Company’s motion and on June 2, 2022, entered a judgment in favor of the Company for $1.7 million in compensatory damages, plus costs, including attorney’s fees. The Court awarded the Company $2,600 in costs plus $0.6 million in attorneys’ fees for a total judgment of $2.3 million. The time for UrbanFT to appeal the $1.7 million in compensatory damage judgment has expired but the time for UrbanFT to appeal the attorneys’ fee and cost award has not. No appeal has been filed. On August 2, 2023, the Company filed a separate lawsuit against Richard Steggall, UFT (North America), LLC fka Urban FT LLC; Urban FT Group, Inc; Urban FT Client Solutions, LLC; UFT Professional Services, LLC; and X-35 Financial Technologies, in the San Diego Superior Court, (case No. 37-2023-00033005-CU-FR-CTL) (“Fraud Conveyance Action”). The Fraud Conveyance Action alleges that the Mr. Steggall orchestrated a scheme to strip UFT (North America), LLC of any assets and effectively transfer the Urban FT business to other entities he owns and controls, all to avoid the Company’s collection efforts. The Fraud Conveyance Action also alleges that Mr. Steggall funnels Urban FT’s revenues through a web of other entities he owns and controls, all to ensure that creditors, including the Company, cannot collect their debts. Claim Against Maplebear, Inc (dba Instacart): On December 13, 2021, Mitek filed a lawsuit against Maplebear Inc., d/b/a Instacart (“Instacart”), in California Superior Court – San Diego County (Case No, 37-2021-00052089-CU-BC-CTL). Mitek is alleging breach of contract, breach of the implied covenant, and requesting over $2.0 million in damages. On August 3, 2018 Instacart entered into a Master Services Agreement (the “Master Services Agreement”) with Mitek agreeing to purchase a subscription to Mitek’s Mobile Verify Advanced service. On June 19, 2020, the parties entered into a second Order Form in connection with the Master Services Agreement. The Order Form has a term of June 18, 2020 to December 31, 2023 and calls for an annual commitment of $1.2 million. On September 23, 2021, Instacart sent a letter to Mitek purporting to outline breaches under the Master Services Agreement. Mitek responded on November 11, 2021, refuting Instacart’s claims and offering to engage in further discussions. Instacart thereafter sent a Notice of Termination of the Master Services Agreement dated November 24, 2021. The Parties participated in mediation on March 15, 2022. The mediation did not result in the resolution of the case and, following mediation, the Parties stipulated that Instacart’s response to Mitek’s complaint would be due on April 27, 2022. In lieu of filing a response to the complaint, Instacart elected to file a Motion to Transfer Venue to the County of San Francisco, which the Court denied, thereby keeping the case in the County of San Diego. On November 28, 2022, Instacart filed a cross-complaint against Mitek alleging: (1) Fraudulent Inducement; (2) Intentional Misrepresentation; (3) False Advertising; (4) Fraudulent Business Practices; (5) Unlawful Business Practices; (6) Unfair Business Practices; (7) Breach of Contract; and (8) Breach of the Implied Covenant of Good Faith and Fair Dealing. On January 27, 2023, Mitek filed a demurrer to the Cross-Complaint (the functional equivalent of a motion to dismiss). The demurrer is pending before the Court. Both Parties have filed motions to compel further responses to written discovery requests. The motions will be heard on December 1, 2023. On September 29, 2023, the Parties reached an agreement to resolve the case. The terms of the agreement are to be completed on or before November 1, 2023, after which the Parties will dismiss their respective claims. Biometric Information Privacy Act Claims On December 16, 2021, the Company was sued in a putative class action in the Circuit Court of Cook County, Illinois alleging that the Company had violated the Illinois Biometric Information Privacy Act (“BIPA”) with respect to identity verification services that the Company provided to its customer HyreCar, Inc. (“HyreCar”) for HyreCar’s customers in Illinois (the “BIPA Lawsuit”). Plaintiff claimed that the Company had not obtained the required consent to collect and use Plaintiff’s biometric information, and that Plaintiff and a class of similarly situated individuals therefore are entitled to statutory damages under BIPA. The Company removed the BIPA Lawsuit to the U.S. District Court for the Northern District of Illinois, and on March 4, 2022 the Company filed a Motion to Compel Arbitration based on HyreCar’s terms and conditions requiring HyreCar customers to arbitrate on an individual (non-class) basis (the “Arbitration Motion”). On May 4, 2022 the trial court denied the Arbitration Motion. On December 21, 2022, the trial court’s ruling was upheld on appeal, and the case subsequently was remanded back to the trial court. On March 10, 2023, Plaintiff filed an Amended Complaint adding a second named plaintiff, who is also a HyreCar end-user, but otherwise not materially changing the allegations. On March 27, 2023, the Company filed a Motion to Dismiss or, in the Alternative, to Strike Class Allegations. On May 11, 2023, and after the Company’s Motion to Dismiss or, in the Alternative, to Strike Class Allegations had been fully briefed, Plaintiffs filed a Motion for Leave to File a Second Amended Complaint seeking to add two new named plaintiffs, who are end-users of Mitek customers Instacart and Roadie, and to remove one named plaintiff. The Company opposed the Motion for Leave. On September 13, 2023, Plaintiffs filed a Notice of Voluntary Dismissal. On September 14, 2023, the Court dismissed the lawsuit without prejudice, ending the litigation. 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. |
LEASES
LEASES | 9 Months Ended |
Jun. 30, 2023 | |
Leases [Abstract] | |
LEASES | 11. LEASES Leases The Company leases office and research and development facility leases under non-cancelable operating leases for various terms through 2030. Certain lease agreements include renewal options, rent abatement periods, and rental increases throughout the term. As of June 30, 2023, the weighted-average remaining lease term for the Company’s operating leases was 4.7 years and the weighted-average discount rate was 3.1%. As of June 30, 2023, the Company had operating ROU assets of $4.3 million. As of June 30, 2023, total operating lease liabilities of $5.1 million were comprised of current lease liabilities of $2.1 million and non-current lease liabilities of $3.0 million. As of September 30, 2022, the Company had operating ROU assets of $5.2 million. As of September 30, 2022, total operating lease liabilities of $6.2 million were comprised of current lease liabilities of $2.1 million and non-current lease liabilities of $4.1 million. The Company recognized $0.5 million and $0.6 million of operating lease costs in the three months ended June 30, 2023 and 2022, respectively. The Company recognized $1.5 million and $1.7 million of operating lease costs in the nine months ended June 30, 2023 and 2022, respectively. Operating lease costs are included within cost of revenue, selling and marketing, research and development, and general and administrative expenses, dependent upon the nature and use of the ROU asset, in the Company’s condensed consolidated statement of operations and other comprehensive income (loss). The Company paid $1.8 million in operating cash flows for operating leases in the nine months ended June 30, 2023. Maturities of operating lease liabilities as of June 30, 2023 were as follows (amounts in thousands) : Operating leases 2023 - remaining $ 562 2024 1,845 2025 636 2026 627 2027 632 2028 424 Thereafter 589 Total lease payments 5,315 Less: amount representing interest (224) Present value of future lease payments $ 5,091 |
REVENUE CONCENTRATION
REVENUE CONCENTRATION | 9 Months Ended |
Jun. 30, 2023 | |
Risks and Uncertainties [Abstract] | |
REVENUE CONCENTRATION | 12. REVENUE CONCENTRATION For the three months ended June 30, 2023, the Company derived revenue of $7.0 million from one customer, with such customer accounting for 16% of the Company’s total revenue. For the three months ended June 30, 2022, the Company derived revenue of $13.6 million from three customers, with such customers accounting for 14%, 10%, and 10% of the Company’s total revenue, respectively. For the nine months ended June 30, 2023, the Company derived revenue of $35.2 million from two customers, with such customers accounting for 15% and 11% of the Company’s total revenue, respectively. For the nine months ended June 30, 2022, the Company derived revenue of $16.9 million from one customer, with such customer accounting for 16% 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 $7.1 million and $5.3 million at June 30, 2023 and 2022, respectively. International sales accounted for approximately 29% and 28% of the Company’s total revenue in the three months ended June 30, 2023 and 2022, respectively. For the nine months ended June 30, 2023 and 2022, international sales accounted for approximately 25% and 29% of the Company’s total revenue, respectively. From a geographic perspective, approximately 70% and 69% of the Company’s total long-term assets as of June 30, 2023 and September 30, 2022, respectively, are associated with the Company’s international subsidiaries. From a geographic perspective, approximately 16% and 19% of the Company’s total long-term assets excluding goodwill and other intangible assets as of June 30, 2023 and September 30, 2022, respectively, are associated with the Company’s international subsidiaries. |
RESTATEMENT OF PREVIOUSLY REPOR
RESTATEMENT OF PREVIOUSLY REPORTED UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS | 9 Months Ended |
Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
RESTATEMENT OF PREVIOUSLY REPORTED UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS | 13. RESTATEMENT OF PREVIOUSLY REPORTED UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS In connection with the preparation of its consolidated financial statements for the twelve months ended September 30, 2022, the Company determined that its previously issued unaudited interim consolidated financial statements for the periods ended March 31, 2022 and June 30, 2022 contained errors in the application of GAAP as summarized below. In accordance with SEC Staff Accounting Bulletin No. 99, “Materiality,” and SEC Staff Accounting Bulletin No. 108, “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements,” the Company evaluated the corrections and determined that the related impact was material to the previously filed consolidated financial statements that contained the error for the quarterly periods ended March 31, 2022 and June 30, 2022 (the “Affected Quarterly Periods”). Therefore, the Company, in consultation with the Audit Committee of the Company’s Board of Directors, concluded that the Affected Quarterly Periods should be restated to present the identified adjustments discussed below. The Company restated the Affected Quarterly Periods in its Annual Report on Form 10-K filed with the SEC on July 31, 2023. Background of Restatement In connection with the preparation of the Company’s financial statements for the fiscal year ended September 30, 2022, the Company noted that certain revenue contracts and other items were improperly accounted for during three and six months ended March 31, 2022 and the three and nine months ended June 30, 2022. Specifically, the Company (a) did not appropriately (i) recognize revenue on its multiyear term licenses; (ii) recognize revenue related to guaranteed minimums and overages for software as a service (“SaaS”) product sales; (iii) cut off revenue related to term license sales; (iv) capitalize certain commissions paid to the HooYu Ltd (“HooYu”) sales team subsequent to the acquisition of HooYu in March 2022; (v) recognize a lease liability and right-of-use asset related to the office lease assumed in the HooYu acquisition; and (vi) recognize certain liabilities upon the acquisition of HooYu that were not valid liabilities; and (b) misclassified certain employee costs related to cloud operations as research and development expense instead of cost of revenue. The financial statement line items impacted by the respective adjustments are labeled in the tables below based on the identifiers from the paragraph above. The condensed consolidated statements of stockholders’ equity have been excluded from the financial statements presented below as they were only impacted by adjustments to net income which are presented below in the condensed consolidated statements of operations and other comprehensive income (loss) and condensed consolidated balance sheets. The impact of the restatement on the Affected Quarterly Period as of and for the three and nine months ended June 30, 2022 is presented in the following tables: MITEK SYSTEMS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (amounts in thousands except share data) As of June 30, 2022 As Previously Reported Total Adjustments As Restated ASSETS Current assets: Cash and cash equivalents $ 21,543 $ — $ 21,543 Short-term investments 49,531 — 49,531 Accounts receivable, net (iii) 29,618 (65) 29,553 Contract assets (i) 5,125 — 5,125 Prepaid expenses 3,078 — 3,078 Other current assets 3,194 — 3,194 Total current assets 112,089 (65) 112,024 Long-term investments 19,534 — 19,534 Property and equipment, net 3,802 — 3,802 Right-of-use assets (v) 5,484 189 5,673 Intangible assets, net 85,743 — 85,743 Goodwill (iv) 127,992 (829) 127,163 Deferred income tax assets (i) 12,993 564 13,557 Other non-current assets (iv), (vi) 6,959 (431) 6,528 Total assets $ 374,596 $ (572) $ 374,024 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 3,981 $ — $ 3,981 Accrued payroll and related taxes 10,276 — 10,276 Accrued liabilities 4,432 (416) 4,016 Deferred revenue, current portion (ii) 13,220 427 13,647 Lease liabilities, current portion (v) 1,902 191 2,093 Acquisition-related contingent consideration (vi) 4,980 920 5,900 Restructuring accrual 1,807 — 1,807 Income taxes payable 1,332 — 1,332 Other current liabilities (iv), (vi) 1,858 — 1,858 Total current liabilities 43,788 1,122 44,910 Convertible senior notes 126,157 — 126,157 Deferred revenue, non-current portion 1,409 — 1,409 Lease liabilities, non-current portion 4,776 — 4,776 Deferred income tax liabilities, non current portion 19,227 — 19,227 Other non-current liabilities (iv), (vi) 1,923 (90) 1,833 Total liabilities 197,280 1,032 198,312 Commitments and contingencies (Note 10) Stockholders’ equity: Preferred stock, $0.001 par value, 1,000,000 shares authorized, none issued and outstanding — — — Common stock, $0.001 par value, 120,000,000 shares authorized, 44,396,263 and 44,168,745 issued and outstanding, as of June 30, 2022 and September 30, 2021, respectively 44 — 44 Additional paid-in capital 211,212 — 211,212 Accumulated other comprehensive income (loss) (17,856) — (17,856) Accumulated deficit (16,084) (1,604) (17,688) Total stockholders’ equity 177,316 (1,604) 175,712 Total liabilities and stockholders’ equity $ 374,596 $ (572) $ 374,024 MITEK SYSTEMS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE (LOSS) (amounts in thousands except per share data) Three Months Ended June 30, 2022 As Previously Reported Total Adjustments As Restated Revenue Software and hardware (i), (ii) $ 19,820 $ (305) $ 19,515 Services and other (i), (ii) 19,513 167 19,680 Total revenue 39,333 (138) 39,195 Operating costs and expenses Cost of revenue—software and hardware 508 — 508 Cost of revenue—services and other (b) 4,073 1,203 5,276 Selling and marketing 11,216 — 11,216 Research and development (b) 9,614 (1,203) 8,411 General and administrative 6,589 2 6,591 Amortization and acquisition-related costs (iv) 3,283 1,210 4,493 Restructuring costs 1,807 — 1,807 Total operating costs and expenses 37,090 1,212 38,302 Operating income 2,243 (1,350) 893 Interest expense 2,077 — 2,077 Other income, net (v) 89 — 89 Income before income taxes 255 (1,350) (1,095) Income tax benefit (i), (ii), (iii) 556 324 880 Net income (loss) $ 811 $ (1,026) $ (215) Net income (loss) per share—basic $ 0.02 $ (0.02) $ (0.00) Net income (loss) per share—diluted $ 0.02 $ (0.02) $ (0.00) Shares used in calculating net income (loss) per share—basic 44,669 — 44,669 Shares used in calculating net income (loss) per share—diluted 45,224 — 45,224 Comprehensive (loss) Net income (loss) $ 811 $ (1,026) $ (215) Foreign currency translation adjustment (13,595) — (13,595) Unrealized (loss) on investments 909 — 909 Comprehensive (loss) $ (11,875) $ (1,026) $ (12,901) MITEK SYSTEMS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE (LOSS) (amounts in thousands except per share data) Nine Months Ended June 30, 2022 As Previously Reported Total Adjustments As Restated Revenue Software and hardware (i), (ii) $ 54,545 $ (1,435) $ 53,110 Services and other (i), (ii) 51,975 93 52,068 Total revenue 106,520 (1,342) 105,178 Operating costs and expenses Cost of revenue—software and hardware 1,196 — 1,196 Cost of revenue—services and other (b) 10,051 3,543 13,594 Selling and marketing 28,859 — 28,859 Research and development (b) 25,457 (3,543) 21,914 General and administrative 18,626 2 18,628 Amortization and acquisition-related costs (iv) 9,947 830 10,777 Restructuring costs 1,807 — 1,807 Total operating costs and expenses 95,943 832 96,775 Operating income 10,577 (2,174) 8,403 Interest expense 6,125 — 6,125 Other income (expense), net (v) (8) 6 (2) Income before income taxes 4,444 (2,168) 2,276 Income tax benefit (i), (ii), (iii) 504 564 1,068 Net income $ 4,948 $ (1,604) $ 3,344 Net income per share—basic $ 0.11 $ (0.04) $ 0.07 Net income per share—diluted $ 0.11 $ (0.04) $ 0.07 Shares used in calculating net income per share—basic 44,721 — 44,721 Shares used in calculating net income per share—diluted 45,793 — 45,793 Comprehensive (loss) Net income $ 4,948 $ (1,604) $ 3,344 Foreign currency translation adjustment (16,724) — (16,724) Unrealized (loss) on investments (189) — (189) Comprehensive (loss) $ (11,965) $ (1,604) $ (13,569) MITEK SYSTEMS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (amounts in thousands) Nine Months Ended June 30, 2022 As Previously Reported Total Adjustments As Restated Operating activities: Net income $ 4,948 $ (1,604) $ 3,344 Adjustments to reconcile net income to net cash provided by operating activities: Stock-based compensation expense 10,117 — 10,117 Amortization of intangible assets 9,176 — 9,176 Depreciation and amortization 1,064 — 1,064 Amortization of investment premiums & other 1,348 — 1,348 Accretion and amortization on debt securities 5,239 — 5,239 Net changes in estimated fair value of acquisition-related contingent consideration (vi) (2,198) 920 (1,278) Deferred taxes (i), (ii), (iii) (1,141) (564) (1,705) Changes in assets and liabilities, net of acquisitions: Accounts receivable (iii) (12,298) 65 (12,233) Contract assets (1,737) — (1,737) Other assets (iv), (vi) (1,090) 242 (848) Accounts payable 1,147 — 1,147 Accrued payroll and related taxes (2,643) — (2,643) Deferred revenue (i), (ii), (iii) 1,077 840 1,917 Restructuring accrual 1,900 — 1,900 Other liabilities (iv), (vi) 1,104 101 1,205 Net cash provided by operating activities 16,013 — 16,013 Investing activities: Purchases of investments (47,818) — (47,818) Sales and maturities of investments 173,198 — 173,198 Acquisitions, net of cash acquired (126,607) — (126,607) Purchases of property and equipment (929) — (929) Net cash used in investing activities (2,156) — (2,156) Financing activities: Proceeds from the issuance of equity plan common stock 1,162 — 1,162 Repurchases and retirements of common stock (14,828) — (14,828) Payment of acquisition-related contingent consideration (6,770) — (6,770) Loans made to non-executive employees (1,041) — (1,041) Principal payments on other borrowings (36) — (36) Net cash provided by (used in) financing activities (21,513) — (21,513) Foreign currency effect on cash and cash equivalents (1,113) — (1,113) Net increase (decrease) in cash and cash equivalents (8,769) — (8,769) Cash and cash equivalents at beginning of period 30,312 — 30,312 Cash and cash equivalents at end of period $ 21,543 $ — $ 21,543 Supplemental disclosures of cash flow information: Issuance of common stock for acquisition-related contingent consideration $ 2,722 $ — $ 2,722 Cash paid for interest 597 — 597 Cash paid for income taxes 819 — 819 Supplemental disclosures of non-cash investing and financing activities: Reclassification of convertible senior notes hedge and embedded conversion derivative to additional paid-in capital 42,821 — 42,821 Unrealized holding gain (loss) on available-for-sale investments (189) — (189) |
NATURE OF OPERATIONS AND SUMM_2
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
Nature of Operations | Nature of Operations Mitek Systems, Inc. (“Mitek,” the “Company,” “we,” “us,” and “our”) is a leading innovator of mobile image capture and digital identity verification solutions. We are a software development company with expertise in artificial intelligence and machine learning. We currently serve more than 7,900 financial services organizations and leading marketplace and financial technology (“fintech”) brands around the globe. Customers count on Mitek to deliver trusted and convenient online experiences, detect and reduce fraud, and document Know Your Customer (“KYC”) and Anti-Money Laundering (“AML”) regulatory compliance. The Company’s solutions are embedded in native mobile apps and web browsers to facilitate digital consumer experiences. Mitek’s identity verification and authentication technologies and services make it possible for banks, financial services organizations and the world’s leading marketplace and sharing platforms to verify an individual’s identity during digital transactions, allowing them to reduce risk and meet regulatory requirements. The Company’s advanced mobile deposit system enables secure, fast and convenient deposit services. Thousands of organizations use Mitek solutions to optimize the security of mobile check deposits, new account openings and more. |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements of the Company as of June 30, 2023 have been prepared in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X and, accordingly, they do not include all information and footnote disclosures required by accounting principles generally accepted in the U.S. (“GAAP”). The Company believes the footnotes and other disclosures made in the financial statements are adequate for a fair presentation of the results of the interim periods presented. The financial statements include all adjustments (solely of a normal recurring nature) which are, in the opinion of management, necessary to make the information presented not misleading. You should read these financial statements and the accompanying notes in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2022, filed with the U.S. Securities and Exchange Commission (“SEC”) on July 31, 2023. In connection with the preparation of the Company’s financial statements for the fiscal year ended September 30, 2022, the Company noted that certain revenue contracts and other items were improperly accounted for during three and six months ended March 31, 2022 and the three and nine months ended June 30, 2022. Specifically, the Company (a) did not appropriately (i) recognize revenue on its multiyear term licenses; (ii) recognize revenue related to guaranteed minimums and overages for software as a service (“SaaS”) product sales; (iii) cut off revenue related to term license sales; (iv) capitalize certain commissions paid to the HooYu Ltd (“HooYu”) sales team subsequent to the acquisition of HooYu in March 2022; (v) recognize a lease liability and right-of-use asset related to the office lease assumed in the HooYu acquisition; and (vi) recognize certain liabilities upon the acquisition of HooYu that were not valid liabilities; and (b) misclassified certain employee costs related to cloud operations as research and development expense instead of cost of revenue. Refer to Note 13. Restatement of Previously Reported Unaudited Interim Consolidated Financial Statements for further details. Results for the nine months ended June 30, 2023 are not necessarily indicative of results for any other interim period or for a full fiscal year. |
Principles of Consolidation | Principles of ConsolidationThe condensed 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. |
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 |
Reclassifications | Reclassifications A reclassification has been made to the prior periods’ condensed consolidated financial statements in order to conform to the current period presentation. Accrued interest payable and income tax payables were included in the other current liabilities line in the condensed consolidated balance sheet as of September 30, 2022, however, they have been presented separately in the condensed consolidated balance sheet as of June 30, 2023 so that the total of the other current liabilities line is less than five percent of total current liabilities. |
Recently Adopted Accounting Pronouncements, Change in Significant Accounting Policy and Recently Issued Accounting Pronouncements | Recently Adopted Accounting Pronouncements The Company did not adopt any new accounting pronouncements in the quarter ended June 30, 2023. Change in Significant Accounting Policy The Company’s significant accounting policies are disclosed in the Company’s audited condensed consolidated financial statements and related notes thereto included in the Company’s Annual Report on Form 10-K for the year ended September 30, 2022, filed with the SEC on July 31, 2023. There have been no changes to these accounting policies through June 30, 2023. Recently Issued Accounting Pronouncements In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (ASU 2020-04) and also issued subsequent amendments to the initial guidance (collectively, Topic 848). Topic 848 provides optional guidance for contract modifications and certain hedging relationships associated with the transition from reference rates that are expected to be discontinued. The Company will adopt Topic 848 when the relevant contracts are modified upon transition to alternative reference rates. The Company does not expect the adoption of Topic 848 will have a material impact on the condensed consolidated financial statements. No other new accounting pronouncement issued or effective during the three months ended June 30, 2023 had, or are expected to have, a material impact on the Company’s condensed consolidated financial statements. |
Revenue Recognition | Nature of Goods and Services The following is a description of principal activities from which the Company generates its revenue. Contracts with customers are evaluated on a contract-by-contract basis as contracts may include multiple types of goods and services as described below. Software and Hardware Software and hardware revenue is generated from on premise software license sales, as well as sales of hardware scanner boxes and on premise appliance products. Software is typically sold as a time-based license with a term of one Services and Other Services and other revenue is generated from the sale of software as a service (“SaaS”) products and services, maintenance associated with the sale of on premise software licenses and consulting and professional services. The Company’s SaaS offerings give customers the option to be charged upon their incurred usage in arrears (“Pay as You Go”), or commit to a minimum spend over their contracted period, with the ability to purchase unlimited additional transactions above the minimum during the contract term. Revenue related to Pay as You Go contracts are recognized based on the customer’s actual usage, in the period of usage. For contracts which include a minimum commitment, the Company is standing ready to provide as many transactions as desired by the customer throughout the contract term, and revenue is recognized on a ratable basis over the contract period including an estimate of usage above the minimum commitment. Usage above minimum commitment is estimated by looking at historical usage, expected volume, and other factors to project out for the remainder of the contract term. The estimated usage-based revenues are constrained to the amount the Company expects to be entitled to receive in exchange for providing access to its platform. If professional services are deemed to be distinct, revenue is recognized as services are performed. The Company does not view the signing of the contract or the provision of initial setup services as discrete earnings events that are distinct. Significant Judgments in Application of the Guidance The Company uses the following methods, inputs, and assumptions in determining amounts of revenue to recognize: Identification of Performance Obligations For contracts that contain multiple performance obligations, which include combinations of software licenses, maintenance, and services, the Company accounts for individual goods or services as a separate performance obligation if they are distinct. The good or service is distinct if the good or service is separately identifiable from other items in the arrangement and if a customer can benefit from it on its own or with other resources that are readily available to the customer. If these criteria are not met, the promised goods or services are accounted for as a combined performance obligation. Determination of Transaction Price The transaction price is determined based on the consideration to which the Company will be entitled in exchange for transferring products or services to the customer. The Company includes any fixed charges within its contracts as part of the total transaction price. To the extent that variable consideration is not constrained, the Company includes an estimate of the variable amount, as appropriate, within the total transaction price and updates its assumptions over the duration of the contract. As a practical expedient, the Company does not adjust the transaction price for the effects of a significant financing component if, at contract inception, the period between customer payment and the transfer of goods or services is expected to be one year or less. Assessment of Estimates of Variable Consideration Many of the Company’s contracts with customers contain some component of variable consideration; however, variable consideration will only be included in the transaction price to the extent it is probable that a significant reversal of revenues recognized will not occur when the uncertainty associated with the variable consideration is resolved. The Company may constrain the estimated transaction price in the event of a high degree of uncertainty as to the final consideration amount owed because of an extended length of time over which the fees may be adjusted or due to uncertainty surrounding collectability. The Company estimates variable consideration in its contracts primarily using the expected value method as the Company believes this method represents the most appropriate estimate for this consideration, based on historical usage trends, the individual contract considerations, and its best judgment at the time. Allocation of Transaction Price The transaction price, including any discounts, is allocated between separate goods and services in a contract that contains multiple performance obligations based on their relative standalone selling prices. The standalone selling prices are based on the prices at which the Company separately sells each good or service. For items that are not sold separately, the Company estimates the standalone selling prices using available information such as market conditions and internally approved pricing guidelines. In certain situations, primarily transactional SaaS revenue described above, the Company allocates variable consideration to a series of distinct goods or services within a contract. The Company allocates variable payments to one or more, but not all, of the distinct goods or services or to a series of distinct goods or services in a contract when (i) the variable payment relates specifically to the Company’s efforts to transfer the distinct good or service and (ii) the variable payment is for an amount that depicts the amount of consideration to which the Company expects to be entitled in exchange for transferring the promised goods or services to its customer. |
Fair Value Measurements and Disclosures | Level 1: Includes investments in U.S. Government and agency securities, which are valued based on recently executed transactions in the same or similar securities. • Level 2: Convertible Senior Notes and corporate debt securities. Corporate debt securities are valued using 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. On February 5, 2021, the Company issued the 2026 Notes as further described in Note 9. Concurrently with the issuance of the 2026 Notes, the Company entered into the Notes Hedge and Warrant Transactions which in combination are intended to reduce the potential dilution from the conversion of the 2026 Notes (see Note 9). The fair value of the Notes Hedge and the embedded conversion derivative were estimated using a Black-Scholes model. Based on the fair value hierarchy, the Company classified the Notes Hedge and the embedded conversion derivative as Level |
NATURE OF OPERATIONS AND SUMM_3
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
Schedule of Potentially Dilutive Common Shares Excluded from Calculation of Net Income per Share | For the three and nine months ended June 30, 2023 and 2022, the following potentially dilutive common shares were excluded from the calculation of net income (loss) per share, as they would have been antidilutive ( amounts in thousands ): Three Months Ended June 30, Nine Months Ended June 30, 2023 2022 2023 2022 Stock options 443 540 453 484 RSUs 1,256 853 1,138 861 ESPP common stock equivalents 295 148 89 36 Performance options 783 678 772 550 Performance RSUs 728 492 228 279 Convertible senior notes 7,448 7,448 7,448 7,448 Warrants 7,448 7,448 7,448 7,448 Total potentially dilutive common shares outstanding 18,401 17,607 17,576 17,106 |
Schedule of Calculation of Basic and Diluted Net Income Per Share | The calculation of basic and diluted net income (loss) per share is as follows ( amounts in thousands, except per share data) : Three Months Ended June 30, Nine Months Ended June 30, 2023 2022 As Restated 2023 2022 As Restated Net income (loss) $ (428) $ (215) $ 9,471 $ 3,344 Weighted-average shares outstanding—basic 46,002 44,669 45,625 44,721 Common stock equivalents 471 555 585 1,072 Weighted-average shares outstanding—diluted 46,473 45,224 46,210 45,793 Net income (loss) per share: Basic $ (0.01) $ (0.00) $ 0.21 $ 0.07 Diluted $ (0.01) $ (0.00) $ 0.20 $ 0.07 |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 9 Months Ended |
Jun. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenue | The following table presents the Company's revenue disaggregated by major product category ( amounts in thousands ): Three Months Ended June 30, Nine Months Ended June 30, 2023 2022 As Restated 2023 2022 As Restated Major product category Deposits software and hardware $ 18,300 $ 16,955 $ 64,979 $ 46,574 Deposits services and other 6,504 5,010 18,866 15,670 Deposits revenue 24,804 21,965 83,845 62,244 Identity verification software and hardware 3,147 2,560 8,104 6,536 Identity verification services and other 15,119 14,670 42,947 36,398 Identity verification revenue 18,266 17,230 51,051 42,934 Total revenue $ 43,070 $ 39,195 $ 134,896 $ 105,178 |
Schedule of Contract Balances | The following table provides information about contract assets and contract liabilities from contracts with customers ( amounts in thousands ): June 30, 2023 September 30, 2022 Contract assets, current $ 7,420 $ 6,273 Contract assets, non-current 7,050 4,218 Contract liabilities (deferred revenue), current 12,786 13,394 Contract liabilities (deferred revenue), non-current 2,056 1,775 |
BUSINESS COMBINATIONS (Tables)
BUSINESS COMBINATIONS (Tables) | 9 Months Ended |
Jun. 30, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Estimated Fair Values of the Assets Acquired and Liabilities Assumed as Part of a Business Acquisition | The following table summarizes the estimated fair values of the assets acquired and liabilities assumed from the HooYu Acquisition as of June 30, 2023 ( amounts in thousands ): HooYu Accounts receivable $ 1,234 Property, plant, and equipment 504 Other current assets 630 Intangible assets 73,100 Goodwill 74,206 Current liabilities (2,264) Deferred revenue (2,612) Deferred income tax liabilities (16,896) Net assets acquired $ 127,902 |
Schedule of Intangible Assets Acquired | The following table summarizes the estimated fair values and estimated useful lives of intangible assets with definite lives acquired from the HooYu Acquisition as of June 30, 2023 ( amounts in thousands, except for years ): Amortization Period Amount assigned Completed technologies 7 years $ 61,400 Customer relationships 5 years 5,000 Trade name 5 years 6,100 Covenants not to compete 3 years 600 Total intangible assets acquired $ 73,100 |
Schedule of Pro Forma Information | The following unaudited pro forma financial information should not be taken as representative of the Company’s future consolidated results of operations and includes adjustments for the amortization expense related to the identified intangible assets. The following table summarizes the Company’s unaudited pro forma financial information and is presented as if the HooYu Acquisition occurred on October 1, 2021 ( amounts shown in thousands ): Three months ended June 30, 2022 Nine months ended June 30, 2022 Pro forma revenue $ 39,195 $ 110,915 Pro forma net income (loss) $ (215) $ (6,311) The following table summarizes the results of HooYu that are included in the Company’s consolidated results ( amounts shown in thousands ): Three Months Ended June 30, Nine Months Ended June 30, 2023 2022 As Restated 2023 2022 As Restated Revenue $ 4,100 $ 2,653 $ 10,124 $ 2,958 Net income (loss) $ (3,028) $ (3,764) $ (10,798) $ (4,015) |
RESTRUCTURING (Tables)
RESTRUCTURING (Tables) | 9 Months Ended |
Jun. 30, 2023 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Changes in Restructuring Accrual | The following table summarizes changes in the restructuring accrual during the nine months ended June 30, 2023 (amounts in thousands) : Balance at September 30, 2022 $ 901 Additional costs incurred 1,986 Payments (2,942) Foreign currency effect on the restructuring accrual 55 Balance at June 30, 2023 $ — |
INVESTMENTS (Tables)
INVESTMENTS (Tables) | 9 Months Ended |
Jun. 30, 2023 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Investments by Type of Security | The following tables summarize investments by type of security as of June 30, 2023 and September 30, 2022 (amounts in thousands): June 30, 2023: Cost Gross Unrealized Gains Gross Unrealized Losses Fair Market Value Available-for-sale securities: U.S. Treasury, short-term $ 22,135 $ — $ (96) $ 22,039 Commercial paper, short-term 6,200 — (45) 6,155 Corporate debt securities, short-term 12,534 — (77) 12,457 U.S. Treasury, long-term 1,375 — (79) 1,296 Corporate debt securities, long-term 1,594 — (75) 1,519 Total $ 43,838 $ — $ (372) $ 43,466 September 30, 2022: Cost Gross Unrealized Gains Gross Unrealized Losses Fair Market Value Available-for-sale securities: U.S. Treasury, short-term $ 6,016 $ — $ (134) $ 5,882 Foreign government and agency securities, short-term 2,865 — (38) $ 2,827 Commercial paper, short-term 18,245 — (223) 18,022 Corporate debt securities, short-term 32,065 — (528) 31,537 U.S. Treasury, long-term 3,431 — (210) 3,221 Corporate debt securities, long-term 7,692 — (280) 7,412 Total $ 70,314 $ — $ (1,413) $ 68,901 |
Schedule 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 June 30, 2023 and September 30, 2022, respectively (amounts in thousands) : June 30, 2023: 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 $ 22,039 $ 22,039 $ — $ — Commercial paper 6,155 — 6,155 — Corporate debt securities 12,457 — 12,457 — Total short-term investments at fair value 40,651 22,039 18,612 — Long-term investments: U.S. Treasury 1,296 1,296 — — Corporate debt securities 1,519 — 1,519 — Total long-term investments at fair value 2,815 1,296 1,519 — Total assets at fair value $ 43,466 $ 23,335 $ 20,131 $ — Liabilities: Acquisition-related contingent consideration $ 8,013 $ — $ 8,013 $ — Total liabilities at fair value $ 8,013 $ — $ 8,013 $ — September 30, 2022: 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 $ 5,882 $ 5,882 $ — $ — Commercial paper 18,022 — 18,022 — Foreign government and agency securities 2,827 — 2,827 — Corporate debt securities 31,537 — 31,537 — Total short-term investments at fair value 58,268 5,882 52,386 — Long-term investments: U.S. Treasury 3,221 3,221 — — Corporate debt securities 7,412 — 7,412 — Total long-term investments at fair value 10,633 3,221 7,412 — Total assets at fair value $ 68,901 $ 9,103 $ 59,798 $ — Liabilities: Acquisition-related contingent consideration $ 5,920 $ — $ — $ 5,920 Total liabilities at fair value $ 5,920 $ — $ — $ 5,920 |
Schedule of Contingent Consideration Measured at Fair Value | The following table includes a roll-forward of the contingent consideration liability during the nine months ended June 30, 2023 (amounts in thousands) : Balance at September 30, 2022 $ 5,920 Expenses recorded due to changes in fair value 2,093 Balance at June 30, 2023 $ 8,013 |
Schedule of Fair Value Measurement Inputs and Valuation Techniques | The following tables summarize the quantitative information including the unobservable inputs related to our acquisition-related contingent consideration as follows (amounts in thousands) : Fair Value at September 30, 2022 Valuation Technique Unobservable Input Input Used $ 5,920 Monte Carlo simulation Weighted-average cost of capital 14.80 % Revenue weight-average cost of capital 4.40 % Revenue volatility 0.20 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Jun. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The following table summarizes changes in the balance of goodwill during the nine months ended June 30, 2023 (amounts shown in thousands) : Balance at September 30, 2022 $ 120,186 Foreign currency effect on goodwill 11,349 Balance at June 30, 2023 $ 131,535 |
Schedule of Intangible Assets | Intangible assets as of June 30, 2023 and September 30, 2022, respectively, are summarized as follows (amounts in thousands, except for years): June 30, 2023: Weighted Average Amortization Period (in years) Cost Accumulated Amortization Net Completed technologies 6.9 $ 95,761 $ 34,585 $ 61,176 Customer relationships 4.7 25,168 20,832 4,336 Trade names 5.0 7,088 2,518 4,570 Covenants not to compete 3.0 600 268 332 Total intangible assets $ 128,617 $ 58,203 $ 70,414 September 30, 2022: Weighted Average Amortization Period (in years) Cost Accumulated Amortization Net Completed technologies 6.9 $ 95,761 $ 32,265 $ 63,496 Customer relationships 4.7 25,168 18,241 6,927 Trade names 5.0 7,088 2,174 4,914 Covenants not to compete 3.0 600 181 419 Total intangible assets $ 128,617 $ 52,861 $ 75,756 |
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 in thousands): Estimated Future Amortization Expense 2023 - remaining 3,835 2024 15,050 2025 13,787 2026 12,560 2027 11,410 Thereafter 13,772 Total $ 70,414 |
STOCKHOLDERS_ EQUITY (Tables)
STOCKHOLDERS’ EQUITY (Tables) | 9 Months Ended |
Jun. 30, 2023 | |
Equity [Abstract] | |
Schedule of Stock-based Compensation Expense Related to Stock Options and RSUs | The following table summarizes stock-based compensation expense related to restricted stock units (“RSUs”), stock options, and Employee Stock Purchase Plan (“ESPP”) shares, which was allocated as follows (amounts in thousands) : Three Months Ended June 30, Nine Months Ended June 30, 2023 2022 2023 2022 Cost of revenue $ 124 $ 82 $ 316 $ 249 Selling and marketing 885 1,273 2,423 3,351 Research and development 644 1,071 2,097 2,875 General and administrative 991 1,262 2,954 3,642 Stock-based compensation expense included in expenses $ 2,644 $ 3,688 $ 7,790 $ 10,117 |
Schedule of Stock Option Activity | The following table summarizes stock option activity under the Company’s equity plans during the nine months ended June 30, 2023: Number of Shares Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term ( in years ) Aggregate Intrinsic Value ( in thousands ) Outstanding at September 30, 2022 781,092 $ 7.46 3.7 $ 1,512 Granted — $ — Exercised (97,802) $ 7.49 Canceled (30,871) $ 9.49 Outstanding at June 30, 2023 652,419 $ 7.36 4.5 2,273 Vested and Expected to Vest at June 30, 2023 652,419 $ 7.36 4.5 2,273 Exercisable at June 30, 2023 643,018 $ 7.32 4.5 2,261 |
Schedule of RSU Activity | The following table summarizes RSU activity under the Company’s equity plans during the nine months ended June 30, 2023: Number of Shares Weighted-Average Fair Market Value Per Share Outstanding at September 30, 2022 2,441,677 $ 12.29 Granted 929,268 10.04 Settled (633,364) 11.37 Canceled (610,230) 12.57 Outstanding at June 30, 2023 2,127,351 11.50 |
Schedule of Performance RSU Activity | The following table summarizes Performance RSU activity under the Company’s equity plans during the nine months ended June 30, 2023: Number of Shares Weighted-Average Fair Market Value Per Share Outstanding at September 30, 2022 919,456 $ 13.43 Granted 325,837 10.23 Settled (24,723) 9.21 Canceled (241,008) 13.20 Outstanding at June 30, 2023 979,562 12.53 |
CONVERTIBLE SENIOR NOTES (Table
CONVERTIBLE SENIOR NOTES (Tables) | 9 Months Ended |
Jun. 30, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Carrying Values of Company's 2026 Notes | The carrying values of the 0.75% convertible notes due 2026 issued by the Company in an initial aggregate principal amount of $155.3 million (the “2026 Notes”) are as follows ( amounts in thousands ): 2026 Notes: June 30, 2023 September 30, 2022 Principal amount $ 155,250 $ 155,250 Less: unamortized discount and issuance costs, net of amortization (21,671) (27,280) Carrying amount $ 133,579 $ 127,970 |
Schedule of Interest Costs Recognized Related to 2026 Notes | The following table presents the total amount of interest cost recognized relating to the 2026 Notes ( amounts in thousands ): Three Months Ended June 30, Nine Months Ended June 30, 2023 2022 2023 2022 Contractual interest expense $ 453 $ 290 $ 1,054 $ 886 Amortization of debt discount and issuance costs 1,908 1,787 5,609 5,239 Total interest expense recognized $ 2,361 $ 2,077 $ 6,663 $ 6,125 |
LEASES (Tables)
LEASES (Tables) | 9 Months Ended |
Jun. 30, 2023 | |
Leases [Abstract] | |
Schedule of Maturities of Operating Lease Liabilities | Maturities of operating lease liabilities as of June 30, 2023 were as follows (amounts in thousands) : Operating leases 2023 - remaining $ 562 2024 1,845 2025 636 2026 627 2027 632 2028 424 Thereafter 589 Total lease payments 5,315 Less: amount representing interest (224) Present value of future lease payments $ 5,091 |
RESTATEMENT OF PREVIOUSLY REP_2
RESTATEMENT OF PREVIOUSLY REPORTED UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Tables) | 9 Months Ended |
Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
Schedule of Error Corrections and Prior Period Adjustments | The financial statement line items impacted by the respective adjustments are labeled in the tables below based on the identifiers from the paragraph above. The condensed consolidated statements of stockholders’ equity have been excluded from the financial statements presented below as they were only impacted by adjustments to net income which are presented below in the condensed consolidated statements of operations and other comprehensive income (loss) and condensed consolidated balance sheets. The impact of the restatement on the Affected Quarterly Period as of and for the three and nine months ended June 30, 2022 is presented in the following tables: MITEK SYSTEMS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (amounts in thousands except share data) As of June 30, 2022 As Previously Reported Total Adjustments As Restated ASSETS Current assets: Cash and cash equivalents $ 21,543 $ — $ 21,543 Short-term investments 49,531 — 49,531 Accounts receivable, net (iii) 29,618 (65) 29,553 Contract assets (i) 5,125 — 5,125 Prepaid expenses 3,078 — 3,078 Other current assets 3,194 — 3,194 Total current assets 112,089 (65) 112,024 Long-term investments 19,534 — 19,534 Property and equipment, net 3,802 — 3,802 Right-of-use assets (v) 5,484 189 5,673 Intangible assets, net 85,743 — 85,743 Goodwill (iv) 127,992 (829) 127,163 Deferred income tax assets (i) 12,993 564 13,557 Other non-current assets (iv), (vi) 6,959 (431) 6,528 Total assets $ 374,596 $ (572) $ 374,024 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 3,981 $ — $ 3,981 Accrued payroll and related taxes 10,276 — 10,276 Accrued liabilities 4,432 (416) 4,016 Deferred revenue, current portion (ii) 13,220 427 13,647 Lease liabilities, current portion (v) 1,902 191 2,093 Acquisition-related contingent consideration (vi) 4,980 920 5,900 Restructuring accrual 1,807 — 1,807 Income taxes payable 1,332 — 1,332 Other current liabilities (iv), (vi) 1,858 — 1,858 Total current liabilities 43,788 1,122 44,910 Convertible senior notes 126,157 — 126,157 Deferred revenue, non-current portion 1,409 — 1,409 Lease liabilities, non-current portion 4,776 — 4,776 Deferred income tax liabilities, non current portion 19,227 — 19,227 Other non-current liabilities (iv), (vi) 1,923 (90) 1,833 Total liabilities 197,280 1,032 198,312 Commitments and contingencies (Note 10) Stockholders’ equity: Preferred stock, $0.001 par value, 1,000,000 shares authorized, none issued and outstanding — — — Common stock, $0.001 par value, 120,000,000 shares authorized, 44,396,263 and 44,168,745 issued and outstanding, as of June 30, 2022 and September 30, 2021, respectively 44 — 44 Additional paid-in capital 211,212 — 211,212 Accumulated other comprehensive income (loss) (17,856) — (17,856) Accumulated deficit (16,084) (1,604) (17,688) Total stockholders’ equity 177,316 (1,604) 175,712 Total liabilities and stockholders’ equity $ 374,596 $ (572) $ 374,024 MITEK SYSTEMS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE (LOSS) (amounts in thousands except per share data) Three Months Ended June 30, 2022 As Previously Reported Total Adjustments As Restated Revenue Software and hardware (i), (ii) $ 19,820 $ (305) $ 19,515 Services and other (i), (ii) 19,513 167 19,680 Total revenue 39,333 (138) 39,195 Operating costs and expenses Cost of revenue—software and hardware 508 — 508 Cost of revenue—services and other (b) 4,073 1,203 5,276 Selling and marketing 11,216 — 11,216 Research and development (b) 9,614 (1,203) 8,411 General and administrative 6,589 2 6,591 Amortization and acquisition-related costs (iv) 3,283 1,210 4,493 Restructuring costs 1,807 — 1,807 Total operating costs and expenses 37,090 1,212 38,302 Operating income 2,243 (1,350) 893 Interest expense 2,077 — 2,077 Other income, net (v) 89 — 89 Income before income taxes 255 (1,350) (1,095) Income tax benefit (i), (ii), (iii) 556 324 880 Net income (loss) $ 811 $ (1,026) $ (215) Net income (loss) per share—basic $ 0.02 $ (0.02) $ (0.00) Net income (loss) per share—diluted $ 0.02 $ (0.02) $ (0.00) Shares used in calculating net income (loss) per share—basic 44,669 — 44,669 Shares used in calculating net income (loss) per share—diluted 45,224 — 45,224 Comprehensive (loss) Net income (loss) $ 811 $ (1,026) $ (215) Foreign currency translation adjustment (13,595) — (13,595) Unrealized (loss) on investments 909 — 909 Comprehensive (loss) $ (11,875) $ (1,026) $ (12,901) MITEK SYSTEMS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE (LOSS) (amounts in thousands except per share data) Nine Months Ended June 30, 2022 As Previously Reported Total Adjustments As Restated Revenue Software and hardware (i), (ii) $ 54,545 $ (1,435) $ 53,110 Services and other (i), (ii) 51,975 93 52,068 Total revenue 106,520 (1,342) 105,178 Operating costs and expenses Cost of revenue—software and hardware 1,196 — 1,196 Cost of revenue—services and other (b) 10,051 3,543 13,594 Selling and marketing 28,859 — 28,859 Research and development (b) 25,457 (3,543) 21,914 General and administrative 18,626 2 18,628 Amortization and acquisition-related costs (iv) 9,947 830 10,777 Restructuring costs 1,807 — 1,807 Total operating costs and expenses 95,943 832 96,775 Operating income 10,577 (2,174) 8,403 Interest expense 6,125 — 6,125 Other income (expense), net (v) (8) 6 (2) Income before income taxes 4,444 (2,168) 2,276 Income tax benefit (i), (ii), (iii) 504 564 1,068 Net income $ 4,948 $ (1,604) $ 3,344 Net income per share—basic $ 0.11 $ (0.04) $ 0.07 Net income per share—diluted $ 0.11 $ (0.04) $ 0.07 Shares used in calculating net income per share—basic 44,721 — 44,721 Shares used in calculating net income per share—diluted 45,793 — 45,793 Comprehensive (loss) Net income $ 4,948 $ (1,604) $ 3,344 Foreign currency translation adjustment (16,724) — (16,724) Unrealized (loss) on investments (189) — (189) Comprehensive (loss) $ (11,965) $ (1,604) $ (13,569) MITEK SYSTEMS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (amounts in thousands) Nine Months Ended June 30, 2022 As Previously Reported Total Adjustments As Restated Operating activities: Net income $ 4,948 $ (1,604) $ 3,344 Adjustments to reconcile net income to net cash provided by operating activities: Stock-based compensation expense 10,117 — 10,117 Amortization of intangible assets 9,176 — 9,176 Depreciation and amortization 1,064 — 1,064 Amortization of investment premiums & other 1,348 — 1,348 Accretion and amortization on debt securities 5,239 — 5,239 Net changes in estimated fair value of acquisition-related contingent consideration (vi) (2,198) 920 (1,278) Deferred taxes (i), (ii), (iii) (1,141) (564) (1,705) Changes in assets and liabilities, net of acquisitions: Accounts receivable (iii) (12,298) 65 (12,233) Contract assets (1,737) — (1,737) Other assets (iv), (vi) (1,090) 242 (848) Accounts payable 1,147 — 1,147 Accrued payroll and related taxes (2,643) — (2,643) Deferred revenue (i), (ii), (iii) 1,077 840 1,917 Restructuring accrual 1,900 — 1,900 Other liabilities (iv), (vi) 1,104 101 1,205 Net cash provided by operating activities 16,013 — 16,013 Investing activities: Purchases of investments (47,818) — (47,818) Sales and maturities of investments 173,198 — 173,198 Acquisitions, net of cash acquired (126,607) — (126,607) Purchases of property and equipment (929) — (929) Net cash used in investing activities (2,156) — (2,156) Financing activities: Proceeds from the issuance of equity plan common stock 1,162 — 1,162 Repurchases and retirements of common stock (14,828) — (14,828) Payment of acquisition-related contingent consideration (6,770) — (6,770) Loans made to non-executive employees (1,041) — (1,041) Principal payments on other borrowings (36) — (36) Net cash provided by (used in) financing activities (21,513) — (21,513) Foreign currency effect on cash and cash equivalents (1,113) — (1,113) Net increase (decrease) in cash and cash equivalents (8,769) — (8,769) Cash and cash equivalents at beginning of period 30,312 — 30,312 Cash and cash equivalents at end of period $ 21,543 $ — $ 21,543 Supplemental disclosures of cash flow information: Issuance of common stock for acquisition-related contingent consideration $ 2,722 $ — $ 2,722 Cash paid for interest 597 — 597 Cash paid for income taxes 819 — 819 Supplemental disclosures of non-cash investing and financing activities: Reclassification of convertible senior notes hedge and embedded conversion derivative to additional paid-in capital 42,821 — 42,821 Unrealized holding gain (loss) on available-for-sale investments (189) — (189) |
NATURE OF OPERATIONS AND SUMM_4
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Jun. 30, 2023 USD ($) institution | Sep. 30, 2022 USD ($) | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Number of financial services organizations, leading marketplace and financial technology brands (more than) | institution | 7,900 | ||
Spanish Government Agencies | HooYu | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Debt interest rate (as a percent) | 0% | ||
Amount outstanding under loan agreement | $ 1.3 | $ 1.3 | |
Spanish Government Agencies | HooYu | Other current liabilities | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Current loans payable | 0.1 | 0.1 | |
Spanish Government Agencies | HooYu | Other non-current liabilities | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Noncurrent loans payable | $ 1.2 | $ 1.2 | |
Spanish Government Agencies | Minimum | HooYu | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Term of loan agreement (in years) | 5 years | ||
Spanish Government Agencies | Maximum | HooYu | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Term of loan agreement (in years) | 12 years |
NATURE OF OPERATIONS AND SUMM_5
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Potentially Dilutive Common Shares Excluded from Calculation of Net Income per Share (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Total potentially dilutive common shares outstanding (in shares) | 18,401 | 17,607 | 17,576 | 17,106 |
Stock options | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Total potentially dilutive common shares outstanding (in shares) | 443 | 540 | 453 | 484 |
RSUs | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Total potentially dilutive common shares outstanding (in shares) | 1,256 | 853 | 1,138 | 861 |
ESPP common stock equivalents | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Total potentially dilutive common shares outstanding (in shares) | 295 | 148 | 89 | 36 |
Performance options | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Total potentially dilutive common shares outstanding (in shares) | 783 | 678 | 772 | 550 |
Performance RSUs | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Total potentially dilutive common shares outstanding (in shares) | 728 | 492 | 228 | 279 |
Convertible senior notes | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Total potentially dilutive common shares outstanding (in shares) | 7,448 | 7,448 | 7,448 | 7,448 |
Warrants | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Total potentially dilutive common shares outstanding (in shares) | 7,448 | 7,448 | 7,448 | 7,448 |
NATURE OF OPERATIONS AND SUMM_6
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Calculation of Basic and Diluted Net Income Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Accounting Policies [Abstract] | ||||
Net income (loss) | $ (428) | $ (215) | $ 9,471 | $ 3,344 |
Weighted-average shares outstanding - basic (in shares) | 46,002 | 44,669 | 45,625 | 44,721 |
Common stock equivalents (in shares) | 471 | 555 | 585 | 1,072 |
Weighted-average shares outstanding - diluted (in shares) | 46,473 | 45,224 | 46,210 | 45,793 |
Net income (loss) per share: | ||||
Basic (in dollars per share) | $ (0.01) | $ 0 | $ 0.21 | $ 0.07 |
Diluted (in dollars per share) | $ (0.01) | $ 0 | $ 0.20 | $ 0.07 |
REVENUE RECOGNITION - Narrative
REVENUE RECOGNITION - Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Sep. 30, 2022 | |
Disaggregation of Revenue [Line Items] | |||||
Revenue recognized included in contract liability balance at the beginning of the period | $ 1,800,000 | $ 1,200,000 | $ 11,700,000 | $ 11,100,000 | |
Unbilled receivables | 6,100,000 | 6,100,000 | $ 1,900,000 | ||
Impairment losses recognized on contract costs | 0 | 0 | |||
Selling and marketing | |||||
Disaggregation of Revenue [Line Items] | |||||
Contract costs included in selling and marketing expenses | 400,000 | $ 300,000 | 1,100,000 | $ 1,000,000 | |
Other Current and Non-current Assets | |||||
Disaggregation of Revenue [Line Items] | |||||
Contract costs | $ 2,300,000 | $ 2,300,000 | $ 2,400,000 | ||
Minimum | |||||
Disaggregation of Revenue [Line Items] | |||||
Estimated useful lives of intangible assets (in years) | 3 years | 3 years | |||
Minimum | Software | |||||
Disaggregation of Revenue [Line Items] | |||||
Estimated useful lives of intangible assets (in years) | 1 year | 1 year | |||
Maximum | |||||
Disaggregation of Revenue [Line Items] | |||||
Estimated useful lives of intangible assets (in years) | 7 years | 7 years | |||
Maximum | Software | |||||
Disaggregation of Revenue [Line Items] | |||||
Estimated useful lives of intangible assets (in years) | 3 years | 3 years |
REVENUE RECOGNITION - Disaggreg
REVENUE RECOGNITION - Disaggregation of Revenues (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 43,070 | $ 39,195 | $ 134,896 | $ 105,178 |
Deposits revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 24,804 | 21,965 | 83,845 | 62,244 |
Identity verification revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 18,266 | 17,230 | 51,051 | 42,934 |
Transferred at Point in Time | Deposits software and hardware | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 18,300 | 16,955 | 64,979 | 46,574 |
Transferred at Point in Time | Identity verification software and hardware | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 3,147 | 2,560 | 8,104 | 6,536 |
Transferred over Time | Deposits services and other | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 6,504 | 5,010 | 18,866 | 15,670 |
Transferred over Time | Identity verification services and other | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 15,119 | $ 14,670 | $ 42,947 | $ 36,398 |
REVENUE RECOGNITION - Contract
REVENUE RECOGNITION - Contract Balances (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Sep. 30, 2022 | Jun. 30, 2022 |
Revenue from Contract with Customer [Abstract] | |||
Contract assets, current | $ 7,420 | $ 6,273 | $ 5,125 |
Contract assets, non-current | 7,050 | 4,218 | |
Contract liabilities (deferred revenue), current | 12,786 | 13,394 | 13,647 |
Contract liabilities (deferred revenue), non-current | $ 2,056 | $ 1,775 | $ 1,409 |
BUSINESS COMBINATIONS - Narrati
BUSINESS COMBINATIONS - Narrative (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Mar. 23, 2022 | Jul. 31, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Business Acquisition [Line Items] | ||||||
Amortization and acquisition-related costs | $ 6,207 | $ 4,493 | $ 15,302 | $ 10,777 | ||
Payment to acquired business, net of cash acquired | $ 0 | $ 126,607 | ||||
HooYu | ||||||
Business Acquisition [Line Items] | ||||||
Percentage of outstanding share capital acquired | 100% | |||||
Initial cash payment paid for acquisition | $ 129,100 | $ 400 | ||||
Payment to acquired business, net of cash acquired | 1,600 | |||||
Amortization and acquisition-related costs | 3,200 | |||||
Payments to Sellers and third-party legal and investment advisors | 127,500 | |||||
Payment to acquired business, net of cash acquired | $ 500 |
BUSINESS COMBINATIONS - Schedul
BUSINESS COMBINATIONS - Schedule of Estimated Fair Values of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Sep. 30, 2022 | Jun. 30, 2022 |
Business Acquisition [Line Items] | |||
Goodwill | $ 131,535 | $ 120,186 | $ 127,163 |
HooYu | |||
Business Acquisition [Line Items] | |||
Accounts receivable | 1,234 | ||
Property, plant, and equipment | 504 | ||
Other current assets | 630 | ||
Intangible assets | 73,100 | ||
Goodwill | 74,206 | ||
Current liabilities | (2,264) | ||
Deferred revenue | (2,612) | ||
Deferred income tax liabilities | (16,896) | ||
Net assets acquired | $ 127,902 |
BUSINESS COMBINATIONS - Sched_2
BUSINESS COMBINATIONS - Schedule of Intangible Assets Acquired (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Jun. 30, 2023 | Sep. 30, 2022 | |
Customer relationships | ||
Acquired Indefinite-lived Intangible Assets [Line Items] | ||
Amortization Period (in years) | 4 years 8 months 12 days | 4 years 8 months 12 days |
Covenants not to compete | ||
Acquired Indefinite-lived Intangible Assets [Line Items] | ||
Amortization Period (in years) | 3 years | 3 years |
HooYu | ||
Acquired Indefinite-lived Intangible Assets [Line Items] | ||
Total intangible assets acquired | $ 73,100 | |
HooYu | Completed technologies | ||
Acquired Indefinite-lived Intangible Assets [Line Items] | ||
Amortization Period (in years) | 7 years | |
Total intangible assets acquired | $ 61,400 | |
HooYu | Customer relationships | ||
Acquired Indefinite-lived Intangible Assets [Line Items] | ||
Amortization Period (in years) | 5 years | |
Total intangible assets acquired | $ 5,000 | |
HooYu | Trade name | ||
Acquired Indefinite-lived Intangible Assets [Line Items] | ||
Amortization Period (in years) | 5 years | |
Total intangible assets acquired | $ 6,100 | |
HooYu | Covenants not to compete | ||
Acquired Indefinite-lived Intangible Assets [Line Items] | ||
Amortization Period (in years) | 3 years | |
Total intangible assets acquired | $ 600 |
Business Combinations - Pro For
Business Combinations - Pro Forma Information (Details) - HooYu - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Jun. 30, 2022 | Jun. 30, 2022 | |
Business Acquisition [Line Items] | ||
Pro forma revenue | $ 39,195 | $ 110,915 |
Pro forma net income (loss) | $ (215) | $ (6,311) |
BUSINESS COMBINATIONS - Consoli
BUSINESS COMBINATIONS - Consolidated Results (Details) - HooYu - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Business Acquisition [Line Items] | ||||
Revenue | $ 4,100 | $ 2,653 | $ 10,124 | $ 2,958 |
Net income (loss) | $ (3,028) | $ (3,764) | $ (10,798) | $ (4,015) |
RESTRUCTURING (Details)
RESTRUCTURING (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Restructuring Reserve [Roll Forward] | ||||
Restructuring Reserve, Beginning Balance | $ 901 | |||
Additional costs incurred | $ 14 | $ 1,807 | 2,000 | $ 1,807 |
Additional costs incurred | 1,986 | |||
Payments | (2,942) | |||
Foreign currency effect on the restructuring accrual | 55 | |||
Restructuring Reserve, Ending Balance | $ 0 | $ 0 |
INVESTMENTS - Summary of Invest
INVESTMENTS - Summary of Investments by Type of Security (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Sep. 30, 2022 |
Schedule Of Available For Sale Securities [Line Items] | ||
Cost | $ 43,838 | $ 70,314 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (372) | (1,413) |
Short-term investments: | 40,651 | 58,268 |
Long-term investments: | 2,815 | 10,633 |
Fair Market Value | 43,466 | 68,901 |
U.S. Treasury | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Amortized cost, short-term | 22,135 | 6,016 |
Amortized cost, long-term | 1,375 | 3,431 |
Gross Unrealized Gains, short-term | 0 | 0 |
Gross Unrealized Gains, long-term | 0 | 0 |
Gross Unrealized Losses, short-term | (96) | (134) |
Gross Unrealized Losses, long-term | (79) | (210) |
Short-term investments: | 22,039 | 5,882 |
Long-term investments: | 1,296 | 3,221 |
Commercial paper | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Amortized cost, short-term | 6,200 | 18,245 |
Gross Unrealized Gains, short-term | 0 | 0 |
Gross Unrealized Losses, short-term | (45) | (223) |
Short-term investments: | 6,155 | 18,022 |
Corporate debt securities | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Amortized cost, short-term | 12,534 | 32,065 |
Amortized cost, long-term | 1,594 | 7,692 |
Gross Unrealized Gains, short-term | 0 | 0 |
Gross Unrealized Gains, long-term | 0 | 0 |
Gross Unrealized Losses, short-term | (77) | (528) |
Gross Unrealized Losses, long-term | (75) | (280) |
Short-term investments: | 12,457 | 31,537 |
Long-term investments: | $ 1,519 | 7,412 |
Foreign government and agency securities | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Amortized cost, short-term | 2,865 | |
Gross Unrealized Gains, short-term | 0 | |
Gross Unrealized Losses, short-term | (38) | |
Short-term investments: | $ 2,827 |
INVESTMENTS - Narrative (Detail
INVESTMENTS - Narrative (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Sep. 30, 2022 | Jun. 30, 2022 |
Investments, Debt and Equity Securities [Abstract] | |||
Contractual maturities of available-for-sale securities due within one year | $ 40,700 | $ 58,300 | |
Contractual maturities of available-for-sale securities due beyond one year to five years | 2,800 | 10,600 | |
Acquisition-related consideration, current | $ 8,013 | $ 5,920 | $ 5,900 |
INVESTMENTS - Summary of Fair V
INVESTMENTS - Summary of Fair Value of Investments Measured on Recurring Basis (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Sep. 30, 2022 | Jun. 30, 2022 |
Assets: | |||
Short-term investments: | $ 40,651 | $ 58,268 | |
Long-term investments: | 2,815 | 10,633 | |
Total assets at fair value | 43,466 | 68,901 | |
Liabilities: | |||
Acquisition-related contingent consideration | 8,013 | 5,920 | $ 5,900 |
Total liabilities at fair value | 8,013 | 5,920 | |
U.S. Treasury | |||
Assets: | |||
Short-term investments: | 22,039 | 5,882 | |
Long-term investments: | 1,296 | 3,221 | |
Commercial paper | |||
Assets: | |||
Short-term investments: | 6,155 | 18,022 | |
Foreign government and agency securities | |||
Assets: | |||
Short-term investments: | 2,827 | ||
Corporate debt securities | |||
Assets: | |||
Short-term investments: | 12,457 | 31,537 | |
Long-term investments: | 1,519 | 7,412 | |
Quoted Prices in Active Markets (Level 1) | |||
Assets: | |||
Short-term investments: | 22,039 | 5,882 | |
Long-term investments: | 1,296 | 3,221 | |
Total assets at fair value | 23,335 | 9,103 | |
Liabilities: | |||
Acquisition-related contingent consideration | 0 | 0 | |
Total liabilities at fair value | 0 | 0 | |
Quoted Prices in Active Markets (Level 1) | U.S. Treasury | |||
Assets: | |||
Short-term investments: | 22,039 | 5,882 | |
Long-term investments: | 1,296 | 3,221 | |
Quoted Prices in Active Markets (Level 1) | Commercial paper | |||
Assets: | |||
Short-term investments: | 0 | 0 | |
Quoted Prices in Active Markets (Level 1) | Foreign government and agency securities | |||
Assets: | |||
Short-term investments: | 0 | ||
Quoted Prices in Active Markets (Level 1) | Corporate debt securities | |||
Assets: | |||
Short-term investments: | 0 | 0 | |
Long-term investments: | 0 | 0 | |
Significant Other Observable Inputs (Level 2) | |||
Assets: | |||
Short-term investments: | 18,612 | 52,386 | |
Long-term investments: | 1,519 | 7,412 | |
Total assets at fair value | 20,131 | 59,798 | |
Liabilities: | |||
Acquisition-related contingent consideration | 8,013 | 0 | |
Total liabilities at fair value | 8,013 | 0 | |
Significant Other Observable Inputs (Level 2) | U.S. Treasury | |||
Assets: | |||
Short-term investments: | 0 | 0 | |
Long-term investments: | 0 | 0 | |
Significant Other Observable Inputs (Level 2) | Commercial paper | |||
Assets: | |||
Short-term investments: | 6,155 | 18,022 | |
Significant Other Observable Inputs (Level 2) | Foreign government and agency securities | |||
Assets: | |||
Short-term investments: | 2,827 | ||
Significant Other Observable Inputs (Level 2) | Corporate debt securities | |||
Assets: | |||
Short-term investments: | 12,457 | 31,537 | |
Long-term investments: | 1,519 | 7,412 | |
Significant Unobservable Inputs (Level 3) | |||
Assets: | |||
Short-term investments: | 0 | 0 | |
Long-term investments: | 0 | 0 | |
Total assets at fair value | 0 | 0 | |
Liabilities: | |||
Acquisition-related contingent consideration | 0 | 5,920 | |
Total liabilities at fair value | 0 | 5,920 | |
Significant Unobservable Inputs (Level 3) | U.S. Treasury | |||
Assets: | |||
Short-term investments: | 0 | 0 | |
Long-term investments: | 0 | 0 | |
Significant Unobservable Inputs (Level 3) | Commercial paper | |||
Assets: | |||
Short-term investments: | 0 | 0 | |
Significant Unobservable Inputs (Level 3) | Foreign government and agency securities | |||
Assets: | |||
Short-term investments: | 0 | ||
Significant Unobservable Inputs (Level 3) | Corporate debt securities | |||
Assets: | |||
Short-term investments: | 0 | 0 | |
Long-term investments: | $ 0 | $ 0 |
INVESTMENTS - Summary of Contin
INVESTMENTS - Summary of Contingent Consideration Measured at Fair Value (Details) - Significant Unobservable Inputs (Level 3) - Contingent Consideration $ in Thousands | 9 Months Ended |
Jun. 30, 2023 USD ($) | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Beginning Balance | $ 5,920 |
Expenses recorded due to changes in fair value | 2,093 |
Ending Balance | $ 8,013 |
INVESTMENTS - Fair Value Measur
INVESTMENTS - Fair Value Measurement Inputs and Valuation Techniques (Details) $ in Thousands | Jun. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) |
Measurement Input, Weighted-Average Cost Of Capital | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Business combination, contingent consideration, liability, measurement input | 0.1480 | |
Measurement Input, Revenue Weight-Average Cost Of Capital | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Business combination, contingent consideration, liability, measurement input | 0.0440 | |
Measurement Input, Revenue Volatility | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Business combination, contingent consideration, liability, measurement input | 200 | |
Significant Unobservable Inputs (Level 3) | Contingent Consideration | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Acquisition-related contingent consideration | $ 8,013 | $ 5,920 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Sep. 30, 2022 | |
Goodwill and Intangible Assets [Line Items] | |||||
Goodwill | $ 131,535 | $ 127,163 | $ 131,535 | $ 127,163 | $ 120,186 |
Amortization of intangible assets | $ 4,300 | $ 4,700 | $ 13,270 | $ 9,176 | |
Minimum | |||||
Goodwill and Intangible Assets [Line Items] | |||||
Estimated useful lives of intangible assets (in years) | 3 years | 3 years | |||
Maximum | |||||
Goodwill and Intangible Assets [Line Items] | |||||
Estimated useful lives of intangible assets (in years) | 7 years | 7 years |
GOODWILL AND INTANGIBLE ASSET_3
GOODWILL AND INTANGIBLE ASSETS - Changes in Goodwill (Details) $ in Thousands | 9 Months Ended |
Jun. 30, 2023 USD ($) | |
Goodwill [Roll Forward] | |
Beginning balance | $ 120,186 |
Foreign currency effect on goodwill | 11,349 |
Ending balance | $ 131,535 |
GOODWILL AND INTANGIBLE ASSET_4
GOODWILL AND INTANGIBLE ASSETS - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |
Jun. 30, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | |
Indefinite Lived Intangible Assets By Major Class [Line Items] | |||
Cost | $ 128,617 | $ 128,617 | |
Accumulated Amortization | 58,203 | 52,861 | |
Net | $ 70,414 | $ 75,756 | $ 85,743 |
Completed technologies | |||
Indefinite Lived Intangible Assets By Major Class [Line Items] | |||
Weighted Average Amortization Period (in years) | 6 years 10 months 24 days | 6 years 10 months 24 days | |
Cost | $ 95,761 | $ 95,761 | |
Accumulated Amortization | 34,585 | 32,265 | |
Net | $ 61,176 | $ 63,496 | |
Customer relationships | |||
Indefinite Lived Intangible Assets By Major Class [Line Items] | |||
Weighted Average Amortization Period (in years) | 4 years 8 months 12 days | 4 years 8 months 12 days | |
Cost | $ 25,168 | $ 25,168 | |
Accumulated Amortization | 20,832 | 18,241 | |
Net | $ 4,336 | $ 6,927 | |
Trade names | |||
Indefinite Lived Intangible Assets By Major Class [Line Items] | |||
Weighted Average Amortization Period (in years) | 5 years | 5 years | |
Cost | $ 7,088 | $ 7,088 | |
Accumulated Amortization | 2,518 | 2,174 | |
Net | $ 4,570 | $ 4,914 | |
Covenants not to compete | |||
Indefinite Lived Intangible Assets By Major Class [Line Items] | |||
Weighted Average Amortization Period (in years) | 3 years | 3 years | |
Cost | $ 600 | $ 600 | |
Accumulated Amortization | 268 | 181 | |
Net | $ 332 | $ 419 |
GOODWILL AND INTANGIBLE ASSET_5
GOODWILL AND INTANGIBLE ASSETS - Schedule of Estimated Future Amortization Expense (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Sep. 30, 2022 | Jun. 30, 2022 |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
2023 - remaining | $ 3,835 | ||
2024 | 15,050 | ||
2025 | 13,787 | ||
2026 | 12,560 | ||
2027 | 11,410 | ||
Thereafter | 13,772 | ||
Net | $ 70,414 | $ 75,756 | $ 85,743 |
STOCKHOLDERS_ EQUITY - Stock-ba
STOCKHOLDERS’ EQUITY - Stock-based Compensation Expense Related to Stock Options and RSUs (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Stock-based compensation expense included in expenses | $ 2,644 | $ 3,688 | $ 7,790 | $ 10,117 |
Cost of revenue | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Stock-based compensation expense included in expenses | 124 | 82 | 316 | 249 |
Selling and marketing | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Stock-based compensation expense included in expenses | 885 | 1,273 | 2,423 | 3,351 |
Research and development | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Stock-based compensation expense included in expenses | 644 | 1,071 | 2,097 | 2,875 |
General and administrative | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Stock-based compensation expense included in expenses | $ 991 | $ 1,262 | $ 2,954 | $ 3,642 |
STOCKHOLDERS_ EQUITY - Narrativ
STOCKHOLDERS’ EQUITY - Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||||||||
Nov. 06, 2018 | Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Oct. 02, 2023 | Sep. 30, 2022 | Jun. 15, 2021 | Jan. 31, 2020 | Mar. 07, 2018 | Mar. 10, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Unrecognized compensation expense related to outstanding stock options and RSUs | $ 22,700,000 | $ 22,700,000 | |||||||||
Weighted average period for unrecognized compensation expense expected to be recognized (in years) | 2 years 4 months 24 days | ||||||||||
Purchase of common stock (in shares) | 652,419 | 652,419 | 781,092 | ||||||||
Recognized compensation expense | $ 2,644,000 | $ 3,688,000 | $ 7,790,000 | $ 10,117,000 | |||||||
Total intrinsic value of options exercised | $ 700,000 | $ 300,000 | |||||||||
Options granted (in shares) | 0 | 0 | |||||||||
Amount authorized and approved under share repurchase program | $ 15,000,000 | ||||||||||
Amount of shares repurchased | $ 14,800,000 | ||||||||||
Number of shares repurchased (in shares) | 886,204 | ||||||||||
Average price of shares repurchased (in dollars per share) | $ 16.73 | ||||||||||
Minimum | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Discount rate from market price, purchase date | 15% | ||||||||||
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 7 months 6 days | ||||||||||
Awards outstanding (in shares) | 2,127,351 | 2,127,351 | 2,441,677 | ||||||||
Recognized compensation expense | $ 1,900,000 | 2,500,000 | $ 5,400,000 | $ 7,100,000 | |||||||
Unrecognized compensation expense related to nonvested awards | $ 17,500,000 | $ 17,500,000 | |||||||||
Performance 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) | 1 year 10 months 24 days | ||||||||||
Awards outstanding (in shares) | 979,562 | 979,562 | 919,456 | ||||||||
Recognized compensation expense | $ 600,000 | 900,000 | $ 2,000,000 | 2,100,000 | |||||||
Unrecognized compensation expense related to nonvested awards | 5,000,000 | 5,000,000 | |||||||||
Stock options | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Recognized compensation expense | 29,000 | 100,000 | 100,000 | 400,000 | |||||||
Unrecognized compensation expense of stock options | 0 | 0 | |||||||||
Performance options | Chief Executive Officer | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Number of common stock reserved for future grants (in shares) | 800,000 | ||||||||||
Recognized compensation expense | $ 0 | 0 | $ 0 | 100,000 | |||||||
Exercise price per share (in dollars per share) | $ 9.50 | ||||||||||
2020 Plan | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Common stock reserved for issuance (in shares) | 4,500,000 | ||||||||||
Number of common stock reserved for future grants (in shares) | 1,193,194 | 1,193,194 | |||||||||
2020 Plan | Subsequent Event | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Common stock reserved for issuance (in shares) | 5,108,000 | ||||||||||
2020 Plan | RSUs | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Awards outstanding (in shares) | 2,503,543 | 2,503,543 | |||||||||
2020 Plan | Performance RSUs | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Awards outstanding (in shares) | 808,446 | 808,446 | |||||||||
Prior Plans | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Common stock reserved for issuance (in shares) | 107,903 | ||||||||||
Purchase of common stock (in shares) | 435,240 | 435,240 | |||||||||
Prior Plans | RSUs | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Awards outstanding (in shares) | 102,900 | 102,900 | |||||||||
ESPP common stock equivalents | |||||||||||
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) | 320,636 | 320,636 | |||||||||
Issuance of common stock under employee stock purchase plan (in shares) | 679,364 | ||||||||||
Recognized compensation expense | $ 100,000 | $ 100,000 | $ 200,000 | $ 400,000 | |||||||
ESPP common stock equivalents | Maximum | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Discount rate from market price, offering date | 15% | ||||||||||
Director Plan | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Common stock reserved for issuance (in shares) | 1,500,000 | ||||||||||
Number of common stock reserved for future grants (in shares) | 0 | 0 | |||||||||
Director Plan | RSUs | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Purchase of common stock (in shares) | 259,513 | 259,513 |
STOCKHOLDERS_ EQUITY - Stock Op
STOCKHOLDERS’ EQUITY - Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | 12 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | Sep. 30, 2022 | |
Number of Shares | |||
Outstanding at beginning of period (in shares) | 781,092 | ||
Granted (in shares) | 0 | 0 | |
Exercised (in shares) | (97,802) | ||
Canceled (in shares) | (30,871) | ||
Outstanding at end of period (in shares) | 652,419 | 781,092 | |
Weighted-Average Exercise Price (in dollars per share) | |||
Outstanding at beginning of period (in dollars per share) | $ 7.46 | ||
Granted (in dollars per share) | 0 | ||
Exercised (in dollars per share) | 7.49 | ||
Canceled (in dollars per share) | 9.49 | ||
Outstanding at end of period (in dollars per share) | $ 7.36 | $ 7.46 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | |||
Vested and Expected to Vest (in shares) | 652,419 | ||
Exercisable (in shares) | 643,018 | ||
Vested and Expected to Vest, Weighted-Average Exercise Price (in dollars per share) | $ 7.36 | ||
Exercisable, Weighted-Average Exercise Price (in dollars per share) | $ 7.32 | ||
Outstanding, Weighted-Average Remaining Contractual Terms (in Years) | 4 years 6 months | 3 years 8 months 12 days | |
Vested and Expected to Vest, Weighted-Average Remaining Contractual Term (in Years) | 4 years 6 months | ||
Exercisable, Weighted-Average Remaining Contractual Term (in Years) | 4 years 6 months | ||
Outstanding, Aggregate Intrinsic Value | $ 2,273 | $ 1,512 | |
Vested and Expected to Vest, Aggregate Intrinsic Value | 2,273 | ||
Exercisable, Aggregate Intrinsic Value | $ 2,261 |
STOCKHOLDERS_ EQUITY - RSU Acti
STOCKHOLDERS’ EQUITY - RSU Activity (Details) - RSUs | 9 Months Ended |
Jun. 30, 2023 $ / shares shares | |
Number of Shares | |
Outstanding at beginning of period (in shares) | shares | 2,441,677 |
Granted (in shares) | shares | 929,268 |
Settled (in shares) | shares | (633,364) |
Canceled (in shares) | shares | (610,230) |
Outstanding at end of period (in shares) | shares | 2,127,351 |
Weighted-Average Fair Market Value Per Share | |
Outstanding at beginning of period (in dollars per share) | $ / shares | $ 12.29 |
Granted (in dollars per share) | $ / shares | 10.04 |
Settled (in dollars per share) | $ / shares | 11.37 |
Canceled (in dollars per share) | $ / shares | 12.57 |
Outstanding at end of period (in dollars per share) | $ / shares | $ 11.50 |
STOCKHOLDERS_ EQUITY - Performa
STOCKHOLDERS’ EQUITY - Performance RSU Activity (Details) - Performance RSUs | 9 Months Ended |
Jun. 30, 2023 $ / shares shares | |
Number of Shares | |
Outstanding at beginning of period (in shares) | shares | 919,456 |
Granted (in shares) | shares | 325,837 |
Settled (in shares) | shares | (24,723) |
Canceled (in shares) | shares | (241,008) |
Outstanding at end of period (in shares) | shares | 979,562 |
Weighted-Average Fair Market Value Per Share | |
Outstanding at beginning of period (in dollars per share) | $ / shares | $ 13.43 |
Granted (in dollars per share) | $ / shares | 10.23 |
Settled (in dollars per share) | $ / shares | 9.21 |
Canceled (in dollars per share) | $ / shares | 13.20 |
Outstanding at end of period (in dollars per share) | $ / shares | $ 12.53 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Income Tax Disclosure [Abstract] | ||||
Income tax provision (benefit) | $ 783 | $ (880) | $ 4,437 | $ (1,068) |
Effective tax rate (as a percent) | (221.00%) | (80.00%) | (32.00%) | 47% |
CONVERTIBLE SENIOR NOTES - Carr
CONVERTIBLE SENIOR NOTES - Carrying Value of 2026 Notes (Details) - Convertible Debt - 2026 Notes - USD ($) | Jun. 30, 2023 | Sep. 30, 2022 | Feb. 28, 2021 | Feb. 05, 2021 |
Debt Instrument [Line Items] | ||||
Debt interest rate (as a percent) | 75% | 0.75% | ||
Debt issued | $ 155,300,000 | $ 155,300,000 | ||
Principal amount | 155,250,000 | $ 155,250,000 | ||
Less: unamortized discount and issuance costs, net of amortization | (21,671,000) | (27,280,000) | ||
Carrying amount | $ 133,579,000 | $ 127,970,000 |
CONVERTIBLE SENIOR NOTES- Narra
CONVERTIBLE SENIOR NOTES- Narrative (Details) - Convertible Debt | 3 Months Ended | 9 Months Ended | 17 Months Ended | 25 Months Ended | |||||
Feb. 05, 2021 USD ($) tradingDay shares $ / shares | Jun. 30, 2023 USD ($) shares | Jun. 30, 2023 USD ($) shares | Jun. 30, 2022 shares | Jun. 30, 2023 USD ($) shares | Jan. 13, 2023 | Sep. 30, 2022 USD ($) | Feb. 28, 2021 USD ($) | Feb. 02, 2021 $ / shares | |
2026 Notes | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt issued | $ 155,300,000 | $ 155,300,000 | $ 155,300,000 | $ 155,300,000 | |||||
Debt interest rate (as a percent) | 0.75% | 75% | 75% | 75% | |||||
Debt conversion ratio (per $1,000 principal amount) | 0.0479731000 | ||||||||
Debt conversion price (in dollars per share) | $ / shares | $ 20.85 | ||||||||
Conversion price premium percentage | 37.50% | ||||||||
Proceeds from debt offerings, net of discounts, commissions and expenses | $ 149,700,000 | ||||||||
Debt issuance costs | $ 5,500,000 | ||||||||
Remaining unamortized debt discount | $ 21,671,000 | $ 21,671,000 | $ 21,671,000 | $ 27,280,000 | |||||
2026 Notes | Common Stock | |||||||||
Debt Instrument [Line Items] | |||||||||
Share price (in dollars per share) | $ / shares | $ 15.16 | ||||||||
2026 Notes | During any calendar quarter commencing after the calendar quarter ending on June 30, 2021 | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt conversion price percentage | 130% | ||||||||
Trading days in period (in days) | tradingDay | 20 | ||||||||
Consecutive trading days in period (in days) | tradingDay | 30 | ||||||||
2026 Notes | Measurement period | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt conversion price percentage | 98% | ||||||||
Consecutive trading days in period (in days) | tradingDay | 5 | ||||||||
2026 Notes | Embedded Derivative Financial Instruments | |||||||||
Debt Instrument [Line Items] | |||||||||
Payment costs related to hedge transactions | $ 9,300,000 | ||||||||
Embedded conversion derivative | 33,200,000 | ||||||||
Value of remaining embedded derivative allocated to host contract | $ 116,500,000 | ||||||||
Derivative interest rate | 6.71% | 6.71% | 6.71% | ||||||
Remaining unamortized debt discount | $ 21,700,000 | $ 21,700,000 | $ 21,700,000 | ||||||
Remaining debt discount amortization period (in years) | 2 years 7 months 6 days | ||||||||
2026 Notes | Interest Rate Period One | |||||||||
Debt Instrument [Line Items] | |||||||||
Additional interest percentage | 0.25% | ||||||||
Interest rate threshold period | 90 days | ||||||||
2026 Notes | Interest Rate Period Two | |||||||||
Debt Instrument [Line Items] | |||||||||
Additional interest percentage | 0.50% | ||||||||
Interest rate threshold period | 180 days | ||||||||
Additional Notes | |||||||||
Debt Instrument [Line Items] | |||||||||
Option period to purchase additional notes (in days) | 13 days | ||||||||
Additional aggregate principal amount purchased | $ 20,250,000 | ||||||||
Notes Hedge | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt conversion price (in dollars per share) | $ / shares | $ 20.85 | ||||||||
Conversion price premium percentage | 75% | ||||||||
Number of shares that can initially be converted into common stock (in shares) | shares | 7,400,000 | ||||||||
Strike price of warrants (in dollar per share) | $ / shares | $ 26.53 | ||||||||
Senior notes hedge balance | $ 33,200,000 | ||||||||
Shares purchased under the notes hedge (in shares) | shares | 0 | ||||||||
Increase in additional paid-in-capital for sale or warrants | $ 23,900,000 | ||||||||
Warrants exercised (in shares) | shares | 0 | ||||||||
Warrants outstanding (in shares) | shares | 0 | 0 | 0 | ||||||
Notes Hedge | Observation period | |||||||||
Debt Instrument [Line Items] | |||||||||
Consecutive trading days in period (in days) | tradingDay | 80 | ||||||||
Incremental dilution of earnings per share of warrants (in shares) | shares | 0 |
CONVERTIBLE SENIOR NOTES - Inte
CONVERTIBLE SENIOR NOTES - Interest Costs Recognized on 2026 Notes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Debt Instrument [Line Items] | ||||
Total interest expense recognized | $ 2,362 | $ 2,077 | $ 6,662 | $ 6,125 |
Convertible Debt | 2026 Notes | ||||
Debt Instrument [Line Items] | ||||
Contractual interest expense | 453 | 290 | 1,054 | 886 |
Amortization of debt discount and issuance costs | 1,908 | 1,787 | 5,609 | 5,239 |
Total interest expense recognized | $ 2,361 | $ 2,077 | $ 6,663 | $ 6,125 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) € in Thousands | 1 Months Ended | 2 Months Ended | 3 Months Ended | 9 Months Ended | ||||||||||||||||||
Feb. 16, 2023 USD ($) patent | Sep. 02, 2022 EUR (€) | Jun. 07, 2022 EUR (€) | Jun. 02, 2022 USD ($) | Dec. 13, 2021 USD ($) | Jul. 21, 2021 patent | Dec. 18, 2020 patent | Dec. 04, 2020 patent | Sep. 30, 2020 patent | Jan. 10, 2020 USD ($) patent | Nov. 06, 2019 USD ($) patent | Jul. 31, 2019 patent | Aug. 17, 2018 patent | Jul. 07, 2018 patent | May 31, 2022 USD ($) patent | Mar. 31, 2021 patent | Sep. 30, 2020 patent | Jan. 26, 2021 patent | Jun. 30, 2023 USD ($) | Feb. 23, 2021 patent | Jun. 30, 2023 USD ($) | Jun. 19, 2020 USD ($) | |
Maplebear, Inc (dba Instacart) | Subscription to Mobile Verify Advance Service | ||||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||||
Annual commitment amount | $ | $ 1,200,000 | |||||||||||||||||||||
Pending Litigation | General and administrative | ||||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||||
Legal fees | $ | $ 400,000 | $ 1,100,000 | ||||||||||||||||||||
Pending Litigation | UrbanFT | ||||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||||
Number of patents allegedly infringed | 2 | 5 | ||||||||||||||||||||
Number of invalid patents | 2 | |||||||||||||||||||||
Number of patents not infringed | 2 | |||||||||||||||||||||
Global Equity & Corporate Consulting, S.L. | HooYu | Pending Litigation | ||||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||||
Compensatory damages awarded | € 800 | $ 800,000 | ||||||||||||||||||||
Global Equity & Corporate Consulting, S.L.- Breach of Services Agreement | ICAR Vision Systems S.L. | Pending Litigation | ||||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||||
Litigation settlement interest percentage | 30% | |||||||||||||||||||||
Litigation settlement interest | € | € 1,100 | |||||||||||||||||||||
Claims against escrow funds | € | 900 | |||||||||||||||||||||
Escrow deposit | € | 200 | |||||||||||||||||||||
Loss contingency, receivable | € | 16,475 | |||||||||||||||||||||
Litigation settlement, expense | € | € 10,995 | |||||||||||||||||||||
USAA | Pending Litigation | Wells Fargo | ||||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||||
Number of patents allegedly infringed | 2 | 3 | 5 | 4 | 2 | 4 | ||||||||||||||||
Number of patents infringed (at least) | 1 | 1 | ||||||||||||||||||||
Amount awarded in damages to other party | $ | $ 102,000,000 | $ 200,000,000 | ||||||||||||||||||||
Number of patents dropped | 2 | |||||||||||||||||||||
Number of invalid patents | 1 | |||||||||||||||||||||
Number of patents instituted | 3 | |||||||||||||||||||||
Number of patents denied institution petition | 1 | |||||||||||||||||||||
USAA | Pending Litigation | PNC Bank | ||||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||||
Number of patents allegedly infringed | 2 | 2 | 1 | |||||||||||||||||||
Amount awarded in damages to other party | $ | $ 218,000,000 | |||||||||||||||||||||
Number of patents denied institution petition | 6 | 2 | ||||||||||||||||||||
USAA | Settled Litigation | PNC Bank | ||||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||||
Number of patents infringed (at least) | 1 | |||||||||||||||||||||
Amount awarded in damages to other party | $ | $ 4,300,000 | |||||||||||||||||||||
UrbanFT | Settled Litigation | ||||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||||
Amount awarded from other parties | $ | $ 2,300,000 | |||||||||||||||||||||
UrbanFT | Settled Litigation | Compensatory Damages | ||||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||||
Amount awarded from other parties | $ | 1,700,000 | |||||||||||||||||||||
UrbanFT | Settled Litigation | Costs Of Judgement Awarded | ||||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||||
Amount awarded from other parties | $ | 2,600 | |||||||||||||||||||||
UrbanFT | Settled Litigation | Attorneys' Fees | ||||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||||
Amount awarded from other parties | $ | $ 600,000 | |||||||||||||||||||||
Maplebear, Inc (dba Instacart) | Pending Litigation | ||||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||||
Contingency amount claimed | $ | $ 2,000,000 |
LEASES - Narrative (Details)
LEASES - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Sep. 30, 2022 | |
Leases [Abstract] | |||||
Weighted average remaining lease term of operating leases (in years) | 4 years 8 months 12 days | 4 years 8 months 12 days | |||
Weighted average discount rate of operating leases(as a percent) | 3.10% | 3.10% | |||
Right-of-use assets | $ 4,335 | $ 5,673 | $ 4,335 | $ 5,673 | $ 5,155 |
ROU liabilities | 5,091 | 5,091 | 6,200 | ||
Lease liabilities, current portion | 2,123 | 2,093 | 2,123 | 2,093 | 2,110 |
Lease liabilities, non-current portion | 2,968 | 4,776 | 2,968 | 4,776 | $ 4,106 |
Operating lease costs | $ 500 | $ 600 | 1,500 | $ 1,700 | |
Operating cash flows for operating leases paid | $ 1,800 |
LEASES - Schedule of Maturities
LEASES - Schedule of Maturities of Operating Lease Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Sep. 30, 2022 |
Leases [Abstract] | ||
2023 - remaining | $ 562 | |
2024 | 1,845 | |
2025 | 636 | |
2026 | 627 | |
2027 | 632 | |
2028 | 424 | |
Thereafter | 589 | |
Total lease payments | 5,315 | |
Less: amount representing interest | (224) | |
Present value of future lease payments | $ 5,091 | $ 6,200 |
REVENUE CONCENTRATION (Details)
REVENUE CONCENTRATION (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Sep. 30, 2022 | |
Revenue, Major Customer [Line Items] | |||||
Revenue | $ 43,070 | $ 39,195 | $ 134,896 | $ 105,178 | |
Accounts receivable, net | 37,616 | 29,553 | 37,616 | 29,553 | $ 27,874 |
Customer Concentration Risk | Sales Revenue Net | |||||
Revenue, Major Customer [Line Items] | |||||
Revenue | 7,000 | 13,600 | 35,200 | 16,900 | |
Customer Concentration Risk | Accounts Receivable | |||||
Revenue, Major Customer [Line Items] | |||||
Accounts receivable, net | $ 7,100 | $ 5,300 | $ 7,100 | $ 5,300 | |
Customer Concentration Risk | Customer One | Sales Revenue Net | |||||
Revenue, Major Customer [Line Items] | |||||
Total revenue, percentage | 16% | 14% | 15% | 16% | |
Customer Concentration Risk | Customer Two | Sales Revenue Net | |||||
Revenue, Major Customer [Line Items] | |||||
Total revenue, percentage | 10% | 11% | |||
Customer Concentration Risk | Customer Three | Sales Revenue Net | |||||
Revenue, Major Customer [Line Items] | |||||
Total revenue, percentage | 10% | ||||
Geographic Concentration Risk | Sales Revenue Net | International | |||||
Revenue, Major Customer [Line Items] | |||||
Total revenue, percentage | 29% | 28% | 25% | 29% | |
Geographic Concentration Risk | Long-term Assets | International | |||||
Revenue, Major Customer [Line Items] | |||||
Total revenue, percentage | 70% | 69% | |||
Geographic Concentration Risk | Long-term Assets, Excluding Goodwill and Other Intangibles | International | |||||
Revenue, Major Customer [Line Items] | |||||
Total revenue, percentage | 16% | 19% |
RESTATEMENT OF PREVIOUSLY REP_3
RESTATEMENT OF PREVIOUSLY REPORTED UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS - Schedule of Balance Sheet (Details) - USD ($) $ / shares in Units, $ in Thousands | Jun. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | ||
Current assets: | ||||||||
Cash and cash equivalents | $ 87,490 | $ 32,059 | $ 21,543 | |||||
Short-term investments | 40,651 | 58,268 | 49,531 | |||||
Accounts receivable, net | 37,616 | 27,874 | 29,553 | |||||
Contract assets | 7,420 | 6,273 | 5,125 | |||||
Prepaid expenses | 2,227 | 2,000 | 3,078 | |||||
Other current assets | 2,828 | 2,622 | 3,194 | |||||
Total current assets | 178,232 | 129,096 | 112,024 | |||||
Long-term investments | 2,815 | 10,633 | 19,534 | |||||
Property and equipment, net | 3,010 | 3,493 | 3,802 | |||||
Right-of-use assets | 4,335 | 5,155 | 5,673 | |||||
Intangible assets, net | 70,414 | 75,756 | 85,743 | |||||
Goodwill | 131,535 | 120,186 | 127,163 | |||||
Deferred income tax assets | 18,553 | 10,245 | 13,557 | |||||
Other non-current assets | 1,533 | 1,628 | 6,528 | |||||
Total assets | 417,477 | 360,410 | 374,024 | |||||
Current liabilities: | ||||||||
Accounts payable | 7,733 | 4,974 | 3,981 | |||||
Accrued payroll and related taxes | 9,548 | 10,393 | 10,276 | |||||
Accrued liabilities | 1,231 | 1,155 | 4,016 | |||||
Deferred revenue, current portion | 12,786 | 13,394 | 13,647 | |||||
Lease liabilities, current portion | 2,123 | 2,110 | 2,093 | |||||
Acquisition-related contingent consideration | 8,013 | 5,920 | 5,900 | |||||
Restructuring accrual | 0 | 901 | 1,807 | |||||
Income taxes payable | 10,059 | [1] | 194 | [1] | 1,332 | |||
Other current liabilities | 1,521 | [1] | 1,254 | [1] | 1,858 | |||
Total current liabilities | 53,687 | 40,497 | 44,910 | |||||
Convertible senior notes | 133,579 | 127,970 | 126,157 | |||||
Deferred revenue, non-current portion | 2,056 | 1,775 | 1,409 | |||||
Lease liabilities, non-current portion | 2,968 | 4,106 | 4,776 | |||||
Deferred income tax liabilities, non current portion | 15,970 | 14,132 | 19,227 | |||||
Other non-current liabilities | 1,573 | 1,613 | 1,833 | |||||
Total liabilities | 209,833 | 190,093 | 198,312 | |||||
Commitments and contingencies (Note 10) | ||||||||
Stockholders’ equity: | ||||||||
Preferred stock, $0.001 par value, 1,000,000 shares authorized, none issued and outstanding | 0 | 0 | 0 | |||||
Common stock, $0.001 par value, 120,000,000 and 120,000,000 shares authorized, 45,507,401 and 44,680,429 issued and outstanding, as of June 30, 2023 and September 30, 2022, respectively | 45 | 44 | 44 | |||||
Additional paid-in capital | 225,633 | 216,493 | 211,212 | |||||
Accumulated other comprehensive income (loss) | (9,504) | (28,219) | (17,856) | |||||
Accumulated deficit | (8,530) | (18,001) | (17,688) | |||||
Total stockholders’ equity | 207,644 | $ 203,030 | 170,317 | 175,712 | $ 184,892 | $ 192,830 | ||
Total liabilities and stockholders’ equity | $ 417,477 | $ 360,410 | $ 374,024 | |||||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | |||||
Preferred stock, shares authorized (in shares) | 1,000,000 | 1,000,000 | 1,000,000 | |||||
Preferred stock, shares issued (in shares) | 0 | 0 | 0 | |||||
Preferred stock, shares outstanding (in shares) | 0 | 0 | 0 | |||||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | ||||
Common stock, shares authorized (in shares) | 120,000,000 | 120,000,000 | 120,000,000 | 120,000,000 | ||||
Common stock, shares issued (in shares) | 45,507,401 | 44,680,429 | 44,396,263 | 44,168,745 | ||||
Common stock, shares outstanding (in shares) | 45,507,401 | 44,680,429 | 44,396,263 | 44,168,745 | ||||
As Previously Reported | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ 21,543 | |||||||
Short-term investments | 49,531 | |||||||
Accounts receivable, net | 29,618 | |||||||
Contract assets | 5,125 | |||||||
Prepaid expenses | 3,078 | |||||||
Other current assets | 3,194 | |||||||
Total current assets | 112,089 | |||||||
Long-term investments | 19,534 | |||||||
Property and equipment, net | 3,802 | |||||||
Right-of-use assets | 5,484 | |||||||
Intangible assets, net | 85,743 | |||||||
Goodwill | 127,992 | |||||||
Deferred income tax assets | 12,993 | |||||||
Other non-current assets | 6,959 | |||||||
Total assets | 374,596 | |||||||
Current liabilities: | ||||||||
Accounts payable | 3,981 | |||||||
Accrued payroll and related taxes | 10,276 | |||||||
Accrued liabilities | 4,432 | |||||||
Deferred revenue, current portion | 13,220 | |||||||
Lease liabilities, current portion | 1,902 | |||||||
Acquisition-related contingent consideration | 4,980 | |||||||
Restructuring accrual | 1,807 | |||||||
Income taxes payable | 1,332 | |||||||
Other current liabilities | 1,858 | |||||||
Total current liabilities | 43,788 | |||||||
Convertible senior notes | 126,157 | |||||||
Deferred revenue, non-current portion | 1,409 | |||||||
Lease liabilities, non-current portion | 4,776 | |||||||
Deferred income tax liabilities, non current portion | 19,227 | |||||||
Other non-current liabilities | 1,923 | |||||||
Total liabilities | 197,280 | |||||||
Commitments and contingencies (Note 10) | ||||||||
Stockholders’ equity: | ||||||||
Preferred stock, $0.001 par value, 1,000,000 shares authorized, none issued and outstanding | 0 | |||||||
Common stock, $0.001 par value, 120,000,000 and 120,000,000 shares authorized, 45,507,401 and 44,680,429 issued and outstanding, as of June 30, 2023 and September 30, 2022, respectively | 44 | |||||||
Additional paid-in capital | 211,212 | |||||||
Accumulated other comprehensive income (loss) | (17,856) | |||||||
Accumulated deficit | (16,084) | |||||||
Total stockholders’ equity | 177,316 | |||||||
Total liabilities and stockholders’ equity | 374,596 | |||||||
Total Adjustments | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | 0 | |||||||
Short-term investments | 0 | |||||||
Accounts receivable, net | (65) | |||||||
Contract assets | 0 | |||||||
Prepaid expenses | 0 | |||||||
Other current assets | 0 | |||||||
Total current assets | (65) | |||||||
Long-term investments | 0 | |||||||
Property and equipment, net | 0 | |||||||
Right-of-use assets | 189 | |||||||
Intangible assets, net | 0 | |||||||
Goodwill | (829) | |||||||
Deferred income tax assets | 564 | |||||||
Other non-current assets | (431) | |||||||
Total assets | (572) | |||||||
Current liabilities: | ||||||||
Accounts payable | 0 | |||||||
Accrued payroll and related taxes | 0 | |||||||
Accrued liabilities | (416) | |||||||
Deferred revenue, current portion | 427 | |||||||
Lease liabilities, current portion | 191 | |||||||
Acquisition-related contingent consideration | 920 | |||||||
Restructuring accrual | 0 | |||||||
Income taxes payable | 0 | |||||||
Other current liabilities | 0 | |||||||
Total current liabilities | 1,122 | |||||||
Convertible senior notes | 0 | |||||||
Deferred revenue, non-current portion | 0 | |||||||
Lease liabilities, non-current portion | 0 | |||||||
Deferred income tax liabilities, non current portion | 0 | |||||||
Other non-current liabilities | (90) | |||||||
Total liabilities | 1,032 | |||||||
Commitments and contingencies (Note 10) | ||||||||
Stockholders’ equity: | ||||||||
Preferred stock, $0.001 par value, 1,000,000 shares authorized, none issued and outstanding | 0 | |||||||
Common stock, $0.001 par value, 120,000,000 and 120,000,000 shares authorized, 45,507,401 and 44,680,429 issued and outstanding, as of June 30, 2023 and September 30, 2022, respectively | 0 | |||||||
Additional paid-in capital | 0 | |||||||
Accumulated other comprehensive income (loss) | 0 | |||||||
Accumulated deficit | (1,604) | |||||||
Total stockholders’ equity | (1,604) | |||||||
Total liabilities and stockholders’ equity | $ (572) | |||||||
[1]September 30, 2022 condensed consolidated balance sheet reflects reclassifications to conform to the current year presentation. |
RESTATEMENT OF PREVIOUSLY REP_4
RESTATEMENT OF PREVIOUSLY REPORTED UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS - Schedule of Operations and Other Comprehensive Income (Loss) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenue | $ 43,070 | $ 39,195 | $ 134,896 | $ 105,178 |
Operating costs and expenses | ||||
Selling and marketing | 10,296 | 11,216 | 29,434 | 28,859 |
Research and development | 7,461 | 8,411 | 22,504 | 21,914 |
General and administrative | 11,588 | 6,591 | 30,126 | 18,628 |
Amortization and acquisition-related costs | 6,207 | 4,493 | 15,302 | 10,777 |
Restructuring costs | 14 | 1,807 | 2,000 | 1,807 |
Total operating costs and expenses | 41,278 | 38,302 | 116,045 | 96,775 |
Operating income | 1,792 | 893 | 18,851 | 8,403 |
Interest expense | 2,362 | 2,077 | 6,662 | 6,125 |
Other income, net | 925 | 89 | 1,719 | (2) |
Income (loss) before income taxes | 355 | (1,095) | 13,908 | 2,276 |
Income tax benefit | (783) | 880 | (4,437) | 1,068 |
Net income (loss) | $ (428) | $ (215) | $ 9,471 | $ 3,344 |
Net income (loss) per share – basic (in dollars per share) | $ (0.01) | $ 0 | $ 0.21 | $ 0.07 |
Net income (loss) per share - diluted (in dollars per share) | $ (0.01) | $ 0 | $ 0.20 | $ 0.07 |
Shares used in calculating net income (loss) per share - basic (in shares) | 46,002 | 44,669 | 45,625 | 44,721 |
Shares used in calculating net income (loss) per share – diluted (in shares) | 46,473 | 45,224 | 46,210 | 45,793 |
Other comprehensive income (loss) | ||||
Net income (loss) | $ (428) | $ (215) | $ 9,471 | $ 3,344 |
Foreign currency translation adjustment | 2,219 | (13,595) | 17,944 | (16,724) |
Unrealized gain (loss) on investments | 123 | 909 | 771 | (189) |
Total other comprehensive loss | 1,914 | (12,901) | 28,186 | (13,569) |
As Previously Reported | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenue | 39,333 | 106,520 | ||
Operating costs and expenses | ||||
Selling and marketing | 11,216 | 28,859 | ||
Research and development | 9,614 | 25,457 | ||
General and administrative | 6,589 | 18,626 | ||
Amortization and acquisition-related costs | 3,283 | 9,947 | ||
Restructuring costs | 1,807 | 1,807 | ||
Total operating costs and expenses | 37,090 | 95,943 | ||
Operating income | 2,243 | 10,577 | ||
Interest expense | 2,077 | 6,125 | ||
Other income, net | 89 | (8) | ||
Income (loss) before income taxes | 255 | 4,444 | ||
Income tax benefit | 556 | 504 | ||
Net income (loss) | $ 811 | $ 4,948 | ||
Net income (loss) per share – basic (in dollars per share) | $ 0.02 | $ 0.11 | ||
Net income (loss) per share - diluted (in dollars per share) | $ 0.02 | $ 0.11 | ||
Shares used in calculating net income (loss) per share - basic (in shares) | 44,669 | 44,721 | ||
Shares used in calculating net income (loss) per share – diluted (in shares) | 45,224 | 45,793 | ||
Other comprehensive income (loss) | ||||
Net income (loss) | $ 811 | $ 4,948 | ||
Foreign currency translation adjustment | (13,595) | (16,724) | ||
Unrealized gain (loss) on investments | 909 | (189) | ||
Total other comprehensive loss | (11,875) | (11,965) | ||
Total Adjustments | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenue | (138) | (1,342) | ||
Operating costs and expenses | ||||
Selling and marketing | 0 | 0 | ||
Research and development | (1,203) | (3,543) | ||
General and administrative | 2 | 2 | ||
Amortization and acquisition-related costs | 1,210 | 830 | ||
Restructuring costs | 0 | 0 | ||
Total operating costs and expenses | 1,212 | 832 | ||
Operating income | (1,350) | (2,174) | ||
Interest expense | 0 | 0 | ||
Other income, net | 0 | 6 | ||
Income (loss) before income taxes | (1,350) | (2,168) | ||
Income tax benefit | 324 | 564 | ||
Net income (loss) | $ (1,026) | $ (1,604) | ||
Net income (loss) per share – basic (in dollars per share) | $ (0.02) | $ (0.04) | ||
Net income (loss) per share - diluted (in dollars per share) | $ (0.02) | $ (0.04) | ||
Shares used in calculating net income (loss) per share - basic (in shares) | 0 | 0 | ||
Shares used in calculating net income (loss) per share – diluted (in shares) | 0 | 0 | ||
Other comprehensive income (loss) | ||||
Net income (loss) | $ (1,026) | $ (1,604) | ||
Foreign currency translation adjustment | 0 | 0 | ||
Unrealized gain (loss) on investments | 0 | 0 | ||
Total other comprehensive loss | (1,026) | (1,604) | ||
Software and hardware | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenue | 21,447 | 19,515 | 73,083 | 53,110 |
Operating costs and expenses | ||||
Cost of revenue | 428 | 508 | 816 | 1,196 |
Software and hardware | As Previously Reported | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenue | 19,820 | 54,545 | ||
Operating costs and expenses | ||||
Cost of revenue | 508 | 1,196 | ||
Software and hardware | Total Adjustments | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenue | (305) | (1,435) | ||
Operating costs and expenses | ||||
Cost of revenue | 0 | 0 | ||
Services and other | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenue | 21,623 | 19,680 | 61,813 | 52,068 |
Operating costs and expenses | ||||
Cost of revenue | $ 5,284 | 5,276 | $ 15,863 | 13,594 |
Services and other | As Previously Reported | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenue | 19,513 | 51,975 | ||
Operating costs and expenses | ||||
Cost of revenue | 4,073 | 10,051 | ||
Services and other | Total Adjustments | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenue | 167 | 93 | ||
Operating costs and expenses | ||||
Cost of revenue | $ 1,203 | $ 3,543 |
RESTATEMENT OF PREVIOUSLY REP_5
RESTATEMENT OF PREVIOUSLY REPORTED UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS - Schedule of Cashflows (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Net income | $ (428) | $ (215) | $ 9,471 | $ 3,344 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||||
Stock-based compensation expense | 7,790 | 10,117 | ||
Amortization of intangible assets | 4,300 | 4,700 | 13,270 | 9,176 |
Depreciation and amortization | 1,187 | 1,064 | ||
Amortization of investment premiums & other | (64) | 1,348 | ||
Accretion and amortization on debt securities | 5,609 | 5,239 | ||
Net changes in estimated fair value of acquisition-related contingent consideration | 2,093 | (1,278) | ||
Deferred taxes | (8,246) | (1,705) | ||
Changes in assets and liabilities, net of acquisitions: | ||||
Accounts receivable | (9,014) | (12,233) | ||
Contract assets | (3,758) | (1,737) | ||
Other assets | (73) | (848) | ||
Accounts payable | 2,633 | 1,147 | ||
Accrued payroll and related taxes | (1,099) | (2,643) | ||
Deferred revenue | (752) | 1,917 | ||
Restructuring accrual | (971) | 1,900 | ||
Other liabilities | 1,205 | |||
Net cash provided by operating activities | 28,113 | 16,013 | ||
Investing activities: | ||||
Purchases of investments | (23,723) | (47,818) | ||
Sales and maturities of investments | 50,000 | 173,198 | ||
Acquisitions, net of cash acquired | 0 | (126,607) | ||
Purchases of property and equipment | (656) | (929) | ||
Net cash provided by (used in) investing activities | 25,621 | (2,156) | ||
Financing activities: | ||||
Proceeds from the issuance of equity plan common stock | 1,351 | 1,162 | ||
Repurchases and retirements of common stock | 0 | (14,828) | ||
Payment of acquisition-related contingent consideration | 0 | (6,770) | ||
Loans made to non-executive employees | 0 | (1,041) | ||
Principal payments on other borrowings | (36) | |||
Net cash provided by (used in) financing activities | 1,315 | (21,513) | ||
Foreign currency effect on cash and cash equivalents | 382 | (1,113) | ||
Net increase (decrease) in cash and cash equivalents | 55,431 | (8,769) | ||
Cash and cash equivalents at beginning of period | 32,059 | 30,312 | ||
Cash and cash equivalents at end of period | 87,490 | 21,543 | 87,490 | 21,543 |
Supplemental disclosures of cash flow information: | ||||
Issuance of common stock for acquisition-related contingent consideration | 0 | 2,722 | ||
Cash paid for interest | 829 | 597 | ||
Cash paid for income taxes | 3,074 | 819 | ||
Supplemental disclosures of non-cash investing and financing activities: | ||||
Reclassification of convertible senior notes hedge and embedded conversion derivative to additional paid-in capital | 0 | 42,821 | ||
Unrealized holding gain (loss) on available for sale investments | $ 123 | 909 | $ 771 | (189) |
As Previously Reported | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Net income | 811 | 4,948 | ||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||
Stock-based compensation expense | 10,117 | |||
Amortization of intangible assets | 9,176 | |||
Depreciation and amortization | 1,064 | |||
Amortization of investment premiums & other | 1,348 | |||
Accretion and amortization on debt securities | 5,239 | |||
Net changes in estimated fair value of acquisition-related contingent consideration | (2,198) | |||
Deferred taxes | (1,141) | |||
Changes in assets and liabilities, net of acquisitions: | ||||
Accounts receivable | (12,298) | |||
Contract assets | (1,737) | |||
Other assets | (1,090) | |||
Accounts payable | 1,147 | |||
Accrued payroll and related taxes | (2,643) | |||
Deferred revenue | 1,077 | |||
Restructuring accrual | 1,900 | |||
Other liabilities | 1,104 | |||
Net cash provided by operating activities | 16,013 | |||
Investing activities: | ||||
Purchases of investments | (47,818) | |||
Sales and maturities of investments | 173,198 | |||
Acquisitions, net of cash acquired | (126,607) | |||
Purchases of property and equipment | (929) | |||
Net cash provided by (used in) investing activities | (2,156) | |||
Financing activities: | ||||
Proceeds from the issuance of equity plan common stock | 1,162 | |||
Repurchases and retirements of common stock | (14,828) | |||
Payment of acquisition-related contingent consideration | (6,770) | |||
Loans made to non-executive employees | (1,041) | |||
Principal payments on other borrowings | (36) | |||
Net cash provided by (used in) financing activities | (21,513) | |||
Foreign currency effect on cash and cash equivalents | (1,113) | |||
Net increase (decrease) in cash and cash equivalents | (8,769) | |||
Cash and cash equivalents at beginning of period | 30,312 | |||
Cash and cash equivalents at end of period | 21,543 | 21,543 | ||
Supplemental disclosures of cash flow information: | ||||
Issuance of common stock for acquisition-related contingent consideration | 2,722 | |||
Cash paid for interest | 597 | |||
Cash paid for income taxes | 819 | |||
Supplemental disclosures of non-cash investing and financing activities: | ||||
Reclassification of convertible senior notes hedge and embedded conversion derivative to additional paid-in capital | 42,821 | |||
Unrealized holding gain (loss) on available for sale investments | 909 | (189) | ||
Total Adjustments | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Net income | (1,026) | (1,604) | ||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||
Stock-based compensation expense | 0 | |||
Amortization of intangible assets | 0 | |||
Depreciation and amortization | 0 | |||
Amortization of investment premiums & other | 0 | |||
Accretion and amortization on debt securities | 0 | |||
Net changes in estimated fair value of acquisition-related contingent consideration | 920 | |||
Deferred taxes | (564) | |||
Changes in assets and liabilities, net of acquisitions: | ||||
Accounts receivable | 65 | |||
Contract assets | 0 | |||
Other assets | 242 | |||
Accounts payable | 0 | |||
Accrued payroll and related taxes | 0 | |||
Deferred revenue | 840 | |||
Restructuring accrual | 0 | |||
Other liabilities | 101 | |||
Net cash provided by operating activities | 0 | |||
Investing activities: | ||||
Purchases of investments | 0 | |||
Sales and maturities of investments | 0 | |||
Acquisitions, net of cash acquired | 0 | |||
Purchases of property and equipment | 0 | |||
Net cash provided by (used in) investing activities | 0 | |||
Financing activities: | ||||
Proceeds from the issuance of equity plan common stock | 0 | |||
Repurchases and retirements of common stock | 0 | |||
Payment of acquisition-related contingent consideration | 0 | |||
Loans made to non-executive employees | 0 | |||
Principal payments on other borrowings | 0 | |||
Net cash provided by (used in) financing activities | 0 | |||
Foreign currency effect on cash and cash equivalents | 0 | |||
Net increase (decrease) in cash and cash equivalents | 0 | |||
Cash and cash equivalents at beginning of period | 0 | |||
Cash and cash equivalents at end of period | 0 | 0 | ||
Supplemental disclosures of cash flow information: | ||||
Issuance of common stock for acquisition-related contingent consideration | 0 | |||
Cash paid for interest | 0 | |||
Cash paid for income taxes | 0 | |||
Supplemental disclosures of non-cash investing and financing activities: | ||||
Reclassification of convertible senior notes hedge and embedded conversion derivative to additional paid-in capital | 0 | |||
Unrealized holding gain (loss) on available for sale investments | $ 0 | $ 0 |