Mitek Systems Reports 18% Q3 Revenue Growth, Raises FY2026 Guidance

Mitek Systems (NASDAQ: MITK ) held its third-quarter earnings conference call on Thursday. Below is the complete transcript from the call. This transcript is brought to you APIs. For real-time access to our entire catalog, please visit for a consultation.

View the webcast at Summary Mitek Systems reported an 18% year-over-year revenue growth in its fiscal third quarter, surpassing expectations, with record fraud and identity revenue and total SaaS revenue up 36%. The company highlighted the scaling of its Check Fraud Defender (CFD) data consortium, with significant partnerships including Fiserv now reselling CFD, expanding its reach. Future outlook includes raised full-year revenue guidance to $195-$200 million, with strong growth anticipated in the fraud and identity sector, and a focus on expanding SaaS revenue. 5% and a net cash position of $46 million, reflecting strong financial health and operational leverage.

Management emphasized the strategic importance of the Check Verification business despite its gradual decline, and announced the unification of go-to-market functions under a new Chief Revenue Officer. Full Transcript OPERATOR Good afternoon, ladies and gentlemen, and welcome to Mitek Systems' fiscal third quarter 2026 financial results. At this time, all lines are in listen-only mode. Following the presentation, we will conduct a question-and-answer session.

If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on August 6, 2026. I would now like to turn the conference over to Ryan Flanagan with ICR. Please go ahead.

Ryan Flanagan, ICR Thank you, operator. Good afternoon, and thank you for joining us today to discuss Mitek Systems' fiscal third quarter 2026 financial results. Joining me today are Chief Executive Officer Ed West and Chief Financial Officer Dave Lyle. Please note that today's call will include forward-looking statements, and because these statements are based on the Company's current intent, statements, expectations, and projections, they are not guarantees of future performance, and a variety of factors could cause actual results to differ materially.

A description of these risks and uncertainties can be found in our 10-Q filing dated 8-6-2026 and our other SEC filings. These forward-looking statements include, but are not limited to, our expectations around customer demand for our products and services, expansion of our Check Fraud Defender, or CFD, data consortium, the ongoing stability of our check verification business, our growth and investment plans, expected improvements in gross profits and unit economics, improvement to operating leverage and scale, expected free cash flow conversion rates, and our FY26 financial outlook and guidance.

Except as required by law, we do not undertake any obligation to update these forward-looking statements. This call will also include references to non-GAAP adjusted results. Please reference this afternoon's press release and our Investor Relations website for further information regarding forward-looking statements and reconciliations of GAAP to non-GAAP financial measures. And with that I'd like to turn the call over to Ed.

Ed West, CEO Good afternoon, everyone, and thank you for joining us today. I would like to give a quick summary of the quarter, provide some background on Mitek Systems, and then hit four key takeaways for you. The team delivered a strong fiscal third quarter with total revenue growth of 18% versus last year, above our previous expectations. We also achieved record fraud and identity revenue and record total SaaS revenue, up 36% versus last year, along with strong profitability and continued margin expansion.

Now, for those less familiar with Mitek Systems, our mission is to establish trust in digital interactions. We provide the verification, authentication, and fraud decisioning infrastructure that high-assurance institutions rely on to protect customers and stop fraud across a broad digital life cycle. Whether someone is opening an account, logging in, depositing a check, or approving a high-risk payment, our role is to help determine whether that person, session, document, check, or transaction can be trusted.

By leveraging our data network platform of digital fraud and detection solutions, expertise, and history in financial services, we believe that we are well aligned to how the market is evolving to fight increasingly sophisticated AI-assisted digital fraud. This quarter's progress is a good indicator of that alignment. Now, with that as context, I'd like to walk through four key takeaways from the quarter. First, our consortium network is scaling into a differentiated, data-driven fraud prevention capability.

Second, our fraud and identity portfolio is deepening across the customer life cycle and into new high-assurance demand. Third, check verification continues to perform well and deliver strategically important core capabilities with deep FI and channel partner relationships and remains a durable, cash-generative foundation. And fourth, our strong execution is showing up in the numbers. Now, beginning with our first takeaway, this quarter our consortium data network reached an important milestone.

S. bank has now successfully completed its pilot and is now moving into the Check Fraud Defender consortium network. We earned this move by showing that the power of the network, combined with our cloud-based fraud software, delivered superior results to their existing solution even though they're one of the largest banks in the nation. Our partner channel is also accelerating into tangible recurring contribution.

I'm honored to announce that Fiserv is now live as a reseller of Check Fraud Defender, extending the network's availability to the thousands of institutions that they serve. We added dozens of new logos this quarter through our partner channel, including through partners Abrigo, CSI, and DataVisor, which brings the consortium's shared intelligence to community and regional banks. As more institutions participate, the shared pool of data grows, and the network becomes more valuable to everyone who participates. S.

checking accounts and annualized volumes now measured in the billions. Check Fraud Defender ACV grew 73% year over year, with growth accelerating over recent quarters. The network strength is also opening adjacent opportunities. Positive Pay Plus, which extends fraud detection to the point of check presentment, continued to gain traction.

We expanded with an existing bank and added our first non-bank design partner, a leading business payments company, extending these capabilities into B2B payments and accounts payable for the first time. Now, that strength extends into our second key takeaway. Our fraud and identity portfolio is deepening both with existing customers and in entirely new areas of demand.

At a high level, our portfolio summarizes to two core solutions: one, a data-driven network consisting of hundreds of FIs addressing the payments use case of check fraud; and second, our core identity platform with the Mobile Verify and MiVIP engines, which is enhanced by our proprietary and leading biometric capabilities. Customers engage with our platform in different ways. Some adopt the full journey across onboarding, verification, and authentication. Others come to us for a single capability.

A striking example this quarter came in the use of age verification. Demand ran many millions of transactions beyond our expectations and drove identity transaction volumes well above any prior quarter. Our expertise, reliability, and ability to scale served this situation well. Importantly, this unexpected surge was tied to a specific regulatory driver involving age assurance.

Our existing customers continue to deepen their relationships with us, increasingly through multi-year committed contracts. We also continue to win beyond our traditional FI core customer group. Recent examples range from a large enterprise software company using our verification for employee screening to one of the largest football clubs in the United Kingdom verifying and authenticating its season ticket holders. A common thread is that they all want the same bank-grade, high-assurance verification and authentication delivered as reliable infrastructure, not a patchwork of point tools.

Increasingly, more of what we sell are multi-signal, fully orchestrated KYC journeys rather than single checks, with transactions per journey holding up well as customers adopt richer workflows. Now, turning to our third key takeaway. Check verification continues to deliver industry-leading convenience for millions of consumers like you and me and thousands of financial institutions on a daily basis. This solution brings Mitek Systems credibility, expertise, an exceptional network of channel partners, and of course terrific cash flow.

Check verification also provides the core software for check fraud detection, software at the heart of our Check Fraud Defender network. 2 billion checks written in the United States in 2024. Against that backdrop, our check verification revenue has stayed range-bound on a trailing twelve-month basis, as mobile deposit penetration driven by its inherent convenience and disciplined pricing have offset volume declines. So while we plan for check verification revenue to soften gradually over time, the strategic value stays with us through the embedded infrastructure and the relationships, and it opens the door to our broader fraud and identity portfolio.

Fiserv is the clearest example: a check verification partner of ours for years now leveraging our fraud network to market through their own channel. This brings us to the fourth key takeaway. Execution is showing up in the numbers. We paired double-digit revenue growth with expanding margins and real operating leverage, and that profitable growth is converting efficiently into cash.

Just as important, the revenue base itself is becoming higher quality and more durable, with SaaS now approaching half of our total revenue—a more recurring, more predictable Mitek Systems than just over one year ago. That profitability, together with a strong net cash position, gives us sufficient flexibility. Our capital allocation approach remains balanced and disciplined. We continue to invest behind the platform while returning capital to shareholders through buybacks, with ample capacity remaining to do both.

Now, before I turn it over to Dave, I want to share an important step forward for the organization. As we scale, we are unifying our go-to-market functions—including direct and channel partner sales, customer success, sales engineering, and professional service teams—under a single CRO organization. As you saw in our earnings release this afternoon, we are pleased to welcome Aaron Saylor as our Chief Revenue Officer, effective August 17th. Aaron has a terrific track record of achievement and revenue growth in the space.

Our consortium data network and our identity platform are both driving growth, and solid execution is showing up in our results now. With that, I'd like to turn the call over to Dave. David Lyle, CFO Thanks, Ed. I'll cover our third quarter results and then walk through our updated fiscal 2026 outlook.

Summarizing the quarter, total revenue was $54 million, up 18% year over year and above the high end of our previous guidance range, with adjusted EBITDA margin of approximately 38% on revenue scale, favorable mix, and expense discipline. Beginning with Fraud and Identity, revenue was $29 million, up 14% year over year, near the targeted range of the mid to high teens for this product portfolio. Growth gains were somewhat offset by the conversion of a large on-premise software license customer to a Check Fraud Defender SaaS agreement, a one-quarter impact.

The 37% Fraud and Identity SaaS growth had two primary drivers: one, underlying growth in identity transaction volumes and new Check Fraud Defender customers; and two, an unexpected surge in age verification demand in our EMEA region where new regulations required a one-time upfront age verification. Fraud and Identity SaaS is a key growth driver of our business, and on a normalized basis this quarter saw a similar high-teens to low-20s SaaS growth rate that we have seen over recent quarters. Moving to Check Verification, revenue was $25 million, up 24%, driven by two large renewals that did not fall in the same quarter last year.

This reflects renewal timing rather than underlying growth, and we remain confident in the approximately $90 million trailing 12-month revenue level. For the full year, on revenue mix, our revenue base continues to improve towards more predictable and durable SaaS. Total SaaS revenue is now approximately 46% of last 12 months revenue, up from 41% a year ago. Contributing to the total SaaS revenue mix growth was Check Fraud Defender, whose ACV grew 73% year over year and now exceeds $22 million.

A growing share of our Fraud and Identity SaaS is now generated by committed multi-year contracts as customers convert from overages and pay-as-you-go usage, which improves our visibility and reflects the structural advantage of our transaction-based model. 5%, up approximately 40 basis points year over year, which was driven by two items. First, our SaaS, maintenance and other gross margin line reached roughly 77% in the quarter, up 250 basis points year over year as consortium pilots completed and moved into the network.

And second, this quarter carried a heavier license revenue mix given the timing of the large Check Verification renewals, which carry near 100% gross margins. 9 million, down about 1% year over year while revenue grew 18%, generating roughly 950 basis points of operating leverage and bringing operating expense to about 48% of revenue. Sales and Marketing and G&A together contributed about 650 basis points of that improvement as revenue scaled. R&D contributed the remaining 300 basis points, but the reported 3% year over year decline in R&D expense is largely a software capitalization effect.

On a cash basis, R&D rose approximately 17% year over year and 11% year to date, so our underlying investment in AI-based decisioning, fraud intelligence and biometrics continues to increase even though it shows up more modestly in the P&L. 4 million a year ago, reflecting a cleaner balance sheet after retiring our convertible notes and a thinner yield spread today between cash income and our term loan. 34, up 58% year over year. 3 million.

6 million, or 70%, consistent with our target range of 70% to 80% and compared with roughly 99% a year ago. The year-over-year decline had four drivers: first, working capital, the main factor, which swung from a source of cash last year to modest use this year and reflects timing and no underlying change in billing or collections velocity; second, higher cash taxes; third, lower net interest income following the retirement of our convertible notes; and fourth, the planned step-up in capitalized development costs as we invest in our product portfolio.

None reflect a change in cash quality, and we continue to expect free cash flow conversion to land within our 70% to 80% long-term range. Our capital allocation priorities remain unchanged. We ended the quarter with $100 million of cash and investments and $54 million of total debt, resulting in a net cash position of approximately $46 million, up from $23 million a year ago. Share repurchases totaled about $2 million in the quarter, bringing trailing 12-month repurchases to approximately $21 million, with $48 million remaining under our current authorization.

Turning to our updated fiscal 2026 outlook, we are raising full-year revenue guidance to $195 million to $200 million, approximately 10% growth at the midpoint; raising full-year Fraud and Identity revenue to $105 million to $109 million, representing approximately 19% growth at the midpoint; and raising adjusted EBITDA margin guidance to 32% to 34%. This implies fourth quarter revenue in the range of $42 million to $47 million. As a reminder, we see typical seasonal softness in fiscal Q1 and fiscal Q4 of each year due to renewal timing from Check Verification customers.

We expect Fraud and Identity SaaS to ease modestly sequentially from Q3 to Q4 off of the unexpected age verification surge in the third quarter. We expect fourth quarter non-GAAP operating expense of $26 million to $27 million, up modestly on continued R&D. 5% of revenue, and depreciation and amortization of approximately 1% of revenue. In closing, this quarter reflects another quarter of our unify-and-grow ethos playing out: a more focused and scalable Mitek Systems delivering stronger growth, expanding profitability, and durable cash generation.

With that, operator, we are ready to take questions. OPERATOR Thank you, ladies and gentlemen. We will now begin the question-and-answer session.