What changed in MITEK SYSTEMS INC's 2024 10-K compared to 2023?

Across the narrative sections we track, MITEK SYSTEMS INC (MITK) added 299 paragraphs, removed 368, and edited 168 between the 2023 and 2024 10-K filings. The biggest movers are Item 1A. Risk Factors (+134/−197), Item 7. Management's Discussion & Analysis (+89/−103), Item 1. Business (+58/−52).

Did MITEK SYSTEMS INC add new Risk Factors in the 2024 10-K?

Yes — Item 1A Risk Factors shows 134 new/edited paragraphs and 197 removed paragraphs versus the 2023 10-K.

What changed in MITEK SYSTEMS INC's MD&A (Item 7) in 2024?

Item 7 Management's Discussion & Analysis shows 89 new/edited paragraphs and 103 removed paragraphs year-over-year. Read the side-by-side diff to see exactly which revenue, margin, and outlook commentary was rewritten.

Did MITEK SYSTEMS INC's Legal Proceedings (Item 3) change in 2024?

Item 3 shows 3 added/edited paragraphs and 1 removed paragraphs — usually indicating new litigation disclosed or settled cases removed.

Where does this MITK 10-K diff come from?

The source filings are MITEK SYSTEMS INC's official 2023 and 2024 Form 10-K annual reports from SEC EDGAR. 10q10k.net parses each filing, aligns paragraphs by section (Item 1, 1A, 1C, 2, 3, 7, 7A), and highlights every added, removed and edited sentence side-by-side.

What changed in MITEK SYSTEMS INC's 10-K — 2023 vs 2024

Paragraph-level year-over-year comparison of MITEK SYSTEMS INC's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+299 added−368 removedSource: 10-K (2024-12-16) vs 10-K (2024-03-19)

Top changes in MITEK SYSTEMS INC's 2024 10-K

299 paragraphs added · 368 removed · 168 edited across 7 sections

Item 1A. Risk Factors+134 / −197 · 71 edited
Item 7. Management's Discussion & Analysis+89 / −103 · 54 edited
Item 1. Business+58 / −52 · 32 edited
Item 5. Market for Registrant's Common Equity+9 / −9 · 4 edited
Item 7A. Quantitative and Qualitative Disclosures About Market Risk+4 / −4 · 4 edited

Item 1. Business

Business — how the company describes what it does

32 edited+26 added−20 removed30 unchanged

2023 filing

2024 filing

Biggest changeAdditionally, a version of ID_CLOUD™ is available that works locally on a desktop which is connected to a propriety hardware scanner for reading and validating identity documents. IDLive® Face IDLive® Face is the industry’s first passive facial liveness detection product. The technology is critical to frictionless fraud prevention in solutions that use face biometrics for authentication and digital identity proofing.

Biggest changeIDLive® Face The IDLive® is the industry’s first passive facial liveness detection product, essential for frictionless fraud prevention in face biometrics for authentication and digital identity proofing. It is iBeta Levels 1 and 2 Presentation Attack Detection (PAD) compliant and processes millions of transactions monthly for customers worldwide.

We believe that factors such as the technological and creative skills of our personnel, new product development, frequent product enhancements, name recognition, and reliable product maintenance are essential to establishing and 3 maintaining a technological leadership position. There can be no assurance that our means of protecting our proprietary rights in the U.S. or abroad will be adequate.

We believe that factors such as the technological and creative skills of our personnel, new product development, frequent product enhancements, name recognition, and reliable product maintenance are essential to establishing and maintaining a technological leadership position. There can be no assurance that our means of protecting our proprietary rights in the U.S. or abroad will be adequate.

However, we believe our patented mobile image capture and identity verification technology, our growing portfolio of products and coverage for the financial services industry and our market expertise gives us a distinct competitive advantage. To remain competitive, we will continue to offer products that are attractive to the consumer as well as being compliant, accurate, and convenient.

However, we believe our patented mobile image capture and identity verification technology, our growing portfolio of products and coverage for the financial services industry and our market expertise gives us a distinct competitive advantage. To remain competitive, we will continue to offer products that are attractive to the consumer 4 as well as being compliant, accurate, and convenient.

MiSnap™ Mitek MiSnap™ is a patented mobile-capture software development kit (“SDK”) that enables an intuitive user experience and instant capture of quality images of identity documents and checks. The key to successful mobile check deposit, data pre-fill and ID document verification is the quality of the image capture.

MiSnap™ 2 Mitek MiSnap™ is a patented mobile-capture software development kit (“SDK”) that enables an intuitive user experience and instant capture of quality images of identity documents and checks. The key to successful mobile check deposit, data pre-fill and ID document verification is the quality of the image capture.

The internal team executes these strategies with the help of external resources as needed to support both direct sales and channel partners’ sales efforts. Intellectual Property Our success depends in large part upon our proprietary technology.

With built-in image quality analysis and image usability analysis, Check Intelligence also ensures that the check meets the Check Clearing for the 21st Century Act requirements and other industry and regulatory standards.

With built-in image quality analysis and image usability analysis, Check Intelligence also ensures that the check meets the Check Clearing for the 21st Century Act (Check 21) requirements and other industry and regulatory standards.

To help us remain competitive, we intend to further our investment in research and development as well as partnering with other technology providers. Competition The market for our products and solutions is intensely competitive, subject to rapid change, and significantly affected by the introduction of new products or technologies and other market activities of industry participants.

To help us remain competitive, we intend to further our investment in research and development as well as partnering with other technology providers. Competition The market for our products and solutions is highly competitive, subject to rapid change, and significantly affected by the introduction of new products or technologies and other market activities of industry participants.

To achieve the highest accuracy rates, Mitek’s technology was conceptualized to verify the authenticity of an identity document in the following systematic approach: • Guided document capture, enabling users to take a quality photo for optimal processing; • Document classification computer vision algorithms that recognize and classify thousands of diverse identity documents from around the world allowing for reliable data extraction; • Data extraction that goes beyond traditional Optimal Character Recognition (“OCR”) to deconstruct the document and analyze the content of each field; and • Evaluation of authenticity elements, using a combination of machine learning techniques and unique computer vision algorithms to help determine the authenticity of a document by evaluating several elements within the document.

If we are unable to protect our intellectual property, or we infringe on the intellectual property rights of a third-party, our operating results could be adversely affected. As of September 30, 2023, the U.S.

Market Opportunities, Challenges & Risks We believe that financial institutions, fintechs, and other companies see our patented solutions as a way to provide a superior digital customer experience to meet growing consumer demands of trust and convenience online and, at the same time, assist them in meeting regulatory requirements.

Market Opportunities, Challenges & Risks We believe that financial institutions, fintech platforms, and other companies see our patented solutions as a way to provide a superior digital customer experience to meet growing consumer demands of trust and convenience online and, at the same time, assist them in meeting regulatory requirements.

Information contained in, or that can be accessed through, our website is not incorporated by reference into, nor is it in any way a part of, this Form 10-K. 5

Information contained in, or that can be accessed through, our website is not incorporated by reference into, nor is it in any way a part of, this Form 10-K. 6

Mobile Deposit® allows consumers to take photographs of the front and back of a check and then remotely deposit the check all within their financial institution’s mobile banking app.

Mobile Deposit® allows consumers to capture photographs of the front and back of a check and then remotely deposit the check all within their financial institution’s mobile banking app.

Moreover, as the market for automated document processing, image recognition and authentication, check imaging, and fraud detection software 4 develops, a number of companies with significantly greater resources than we have could attempt to enter or increase their presence in our industry, either independently or by acquiring or forming strategic alliances with our competitors, or otherwise increase their focus on the industry.

Moreover, as the market for automated document processing, image recognition and authentication, check imaging, and fraud detection software develops, a number of companies with significantly greater resources than we have could attempt to enter or increase their presence in our industry, either independently or by acquiring or forming strategic alliances with our competitors, or otherwise increase their focus on the industry, or reshape the market through pricing or other innovations.

Patent and Trademark Office has issued us 100 patents with expiration dates ranging from 2026 through 2037 and we have filed for 20 additional domestic and international patents. In addition, we generally enter into confidentiality agreements with certain employees.

Patent and Trademark Office has issued us 107 patents with expiration dates ranging from 2024 through 2041 and we have filed for 20 additional domestic and international patents. In addition, we generally enter into confidentiality agreements with certain employees.

Our total employee base consists of 329 sales and marketing, professional services, and document review employees, 189 research and development and support employees, and 72 employees in executive, finance, network administration, and other capacities. In addition, we engaged various consultants in the areas of research and development, product development, finance, and marketing during fiscal year 2023.

Our total employee base consists of 318 sales and marketing, professional services, and document review employees, 229 research and development and support employees, and 83 employees in executive, finance, network administration, and other capacities. In addition, we engaged various consultants in the areas of research and development, product development, finance, and marketing during fiscal year 2024.

The value of digital transformation to our customers is a possible increase in top line revenue and a reduction in the cost of sales and service. As the use of new technology increases, so does associated fraud and cyber-attacks. The negative outcomes of fraud and cyber-attacks encompass financial losses, brand damage, and loss of loyal customers.

Our digital technology solutions are provided in two parts: (i) a software development kit for mobile image capture and (ii) a cloud software platform which uses artificial intelligence and machine learning to classify and extract data to enable mobile check deposit as well as aid the authentication of identity documents including passports, identity cards, and driver's licenses using a camera-equipped device.

Product and Technology Overview Technology Our digital technology solutions are provided in two parts: (i) as software development kits for mobile image or voice pattern capture and (ii) a cloud software platform which uses artificial intelligence and machine learning to classify and extract data to enable mobile check deposit as well as aid the authentication of documents including checks, passports, identity cards, and driver's licenses using a camera-equipped device. 1 Our technology uses patented algorithms that analyze images of documents in many ways.

Mobile Deposit® enables individuals and businesses to remotely deposit checks using their camera-equipped smartphone or tablet. Mobile Deposit® is embedded within the financial institutions’ digital banking apps used by consumers and now processes more than one billion check deposits annually. Mitek began selling Mobile Deposit® in early 2008 and received its first patent for this product in August 2010.

Mobile Deposit® is embedded within the financial institutions’ digital banking apps used by consumers and now processes more than one billion check deposits annually. Mitek began selling Mobile Deposit® in early 2008 and received its first patent for this product in August 2010.

Sales and Marketing We derive revenue predominately from the sale of licenses (to both our on premise and transactional software as a service (“SaaS”) products) and transaction fees to use our products, and to a lesser extent by providing maintenance and professional services for the products we offer.

The product can be added to any onboarding or electronic KYC solution, providing another layer of fraud prevention for banks, gig economy companies, telecom companies, and others. 3 Sales and Marketing We derive revenue predominately from the sale of licenses (to both our on premise and transactional software as a service (“SaaS”) products) and transaction fees to use our products, and to a lesser extent by providing maintenance and professional services for the products we offer.

The team is responsible for maintaining and enhancing the performance, quality, and utility of all of our products. In addition to research and development, our engineering staff provides customer technical support on an as-needed basis. Human Capital Resources As of September 30, 2023, we had 590 employees, 160 in the U.S. and 430 internationally, 573 of which are full time.

Check Fraud Defender helps banks fight check fraud by analyzing more than 18 visual elements of a check to give a more comprehensive view of possible fraud. Check Intelligence Check Intelligence enables financial institutions to automatically extract data from a check image received across any deposit channel—branch, ATM, remote deposit capture, and mobile.

Check Intelligence Check Intelligence enables financial institutions to automatically extract data from a check image received across any deposit channel—branch, ATM, remote deposit capture, and mobile.

However, in that case, we or another channel partner must establish a relationship with the end-users, which could take time to develop. We have a growing number of competitors in the mobile image capture and identity verification industry, many of which have greater financial, technical, marketing, and other resources.

We have a growing number of competitors in the mobile image capture and identity verification industry, many of which have greater financial, technical, marketing, and other resources.

If we were to lose a channel partner relationship, we do not believe such a loss would adversely affect our operations because either we or another channel partner could sell our products to the end-users that had purchased products from the channel partner we lost.

If we were to lose a channel partner relationship, we believe either we or another channel partner could sell our products to the end-users that had purchased products from the channel partner we lost. However, in that case, we or another channel partner must establish a relationship with the end-users, which could take time to develop.

Mitek delivers a simple and easy user experience with our proprietary mobile automatic capture which assists users in capturing a high quality image of a check by holding their mobile device over the check. 1 Mobile Verify® Mobile Verify® is an identity verification solution that can be integrated into mobile apps, mobile websites, and desktop applications.

Mitek delivers a simple and easy user experience with our proprietary mobile automatic capture which assists users in capturing a high quality image of a check by holding their mobile device over the check. Check Fraud Defender Check Fraud Defender is an advanced AI-powered, cloud-hosted consortium designed to combat check fraud by leveraging Mitek’s proprietary check image science.

Our technology uses patented algorithms that analyze images of identity documents in many ways. These include image quality analysis, image repair and optimization, document identification and classification, data extraction, and numerous authenticators. Products Mobile Deposit® Mitek’s Mobile Deposit® solution is used today by millions of consumers in the United States and Canada for mobile check deposit.

These include image quality analysis, image repair and optimization, document identification and classification, data extraction, and numerous authenticators. Products Mobile Deposit® Mitek’s Mobile Deposit® is used today by millions of consumers in the United States (“U.S.”) and Canada for mobile check deposit. Mobile Deposit® enables individuals and businesses to remotely deposit checks using their camera-equipped smartphone or tablet.

The Mobile Verify® identity verification engine is a modular cross-platform architecture that uses machine learning and advanced computer vision algorithms.

Adding a second layer for identity proofing, Mobile Verify® matches the portrait extracted from the identity document with a selfie of its presenter by doing a biometric face comparison. The Mobile Verify® identity verification engine is a modular cross-platform architecture that uses machine learning and advanced computer vision algorithms.

The product is also optimized to enable embedded security and personalization on Internet of Things devices. IDVoice® has achieved top rankings in the industry’s leading benchmark challenges. IDLive® Voice IDLive® Voice helps stop spoofing attacks on voice biometric systems by distinguishing live voice from synthesized speech, voice deepfakes, and recordings.

IDVoice® IDVoice® is a robust AI-driven voice biometric engine that enables fast, convenient authentication on mobile, web, and telephone channels. The product is also optimized to enable embedded security and personalization on Internet of Things devices. IDVoice® has achieved top rankings in the industry’s leading benchmark challenges.

IDLive Doc™ IDLive Doc™ works to fight fraud related to digitally displayed document images. This AI-based product validates the physical presence of documents used when verifying customer identities online. The product can be added to any onboarding or electronic KYC solution, providing another layer of fraud prevention for banks, gig economy companies, telecom companies, and others.

It can detect voice clones in both presentation and more complex injection attacks in under three seconds. IDLive Doc™ The IDLive Doc™ works to fight fraud related to digitally displayed document images. This AI-based product validates the physical presence of documents used when verifying customer identities online.

Mobile Verify® combines an optimal image capture experience with our leading document authentication technology — helping our customers validate an identity document presented in a digital transaction is genuine and unaltered. Adding a second layer for identity proofing, Mobile Verify® matches the portrait extracted from the identity document with a selfie of its presenter by doing a biometric face comparison.

Mobile Verify® Mobile Verify® is an Identity Document Verification (“IDV”) solution that can be integrated into mobile apps, mobile websites, and desktop applications. Mobile Verify® combines an optimal image capture experience with our leading document authentication technology — helping our customers validate an identity document presented in a digital transaction is genuine and unaltered.

Mitek Verified Identity Platform (“MiVIP®”) MiVIP® is an end-to-end KYC platform that helps companies to quickly design, build, and deploy robust KYC journeys with little or no development resources. We combine facial biometrics, liveness detection, ID document validation, database checks, geolocation, digital footprint analysis, and more to provide the clearest picture of who is requesting access to a business’ services.

Mitek Verified Identity Platform (“MiVIP®”) MiVIP® is an advanced, end-to-end identity verification solution designed to address the increasing demands for seamless, secure, and scalable KYC process that helps companies quickly design, build, and deploy robust KYC journeys with little or no development resources.

ITEM 1. BUSINESS. Overview 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 computer vision, artificial intelligence and machine learning.

ITEM 1. BUSINESS. Overview Mitek Systems, Inc. (“Mitek,” the “Company,” “we,” “us,” and “our”) is a pioneer in mobile image capture and a global provider of solutions in the fraud prevention, digital identity verification, and cybersecurity markets. Our products address the increasing sophistication of fraud in areas such as new account openings, digital account access, and payments.

We continue to focus on building a pipeline for talent to create more opportunities for workplace diversity and to support greater representation within the Company. Available Information We are subject to the reporting requirements of the Exchange Act.

Available Information We are subject to the reporting requirements of the Exchange Act.

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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 meet Know Your Customer (“KYC”) and Anti-Money Laundering (“AML”) regulatory compliance.

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Utilizing artificial intelligence, computer vision, and proprietary biometrics, our enterprise-grade verification tools protect organizations from escalating check fraud, ongoing account opening fraud, and new cyber threats such as deepfakes and voice clones. Mitek’s Mobile Check Deposit product is trusted by consumers for its convenience and accuracy verifying checks for deposit, facilitating approximately 1.2 billion transactions annually.

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The Company’s solutions are embedded in native mobile apps and web browsers to facilitate digital consumer experiences.

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This solution powers secure, fast, and convenient deposit services for many organizations, enhancing consumer experience. We serve over 7,900 financial services organizations, financial technology (“fintech”) brands, telecommunications companies, and marketplace brands globally. Our verification and fraud detection technology is embedded directly within mobile and web applications, providing seamless verification at every touchpoint in the customer lifecycle.

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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 numerous stages of the customer lifecycle, allowing them to reduce risk and meet regulatory requirements. The Company’s advanced mobile deposit system enables secure, fast and convenient deposit services.

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By equipping banks, marketplaces, and fintech platforms with these tools, we help reduce the costs associated with fraud, impersonation, Know Your Customer (“KYC”) and anti-money laundering (“AML”) compliance. Additionally, our solutions improve the customer experience, help to ensure regulatory compliance, and lower operational costs.

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Thousands of organizations use Mitek solutions to optimize the security of mobile check deposits, new account openings and more. In May of 2021, Mitek acquired ID R&D, Inc. (“ID R&D” and such acquisition, the “ID R&D Acquisition”), an award-winning provider of AI-based voice and face biometrics and liveness detection.

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Expanding Expertise Through Strategic Acquisitions To strengthen our portfolio and enhance security across all stages of the digital customer journey, in 2021 Mitek acquired ID R&D, Inc., a provider of AI-driven voice and face biometrics and liveness detection technologies.

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ID R&D delivers innovative, biometric capabilities that raise the bar on usability and performance.

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This acquisition significantly expanded Mitek’s capabilities for identity verification to include passive multimodal authentication needed for multiple touch points in the digital lifecycle of a consumer.

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The ID R&D Acquisition helps simplify and secure the entire transaction lifecycle for both businesses and consumers, provides businesses and financial institutions with access to one authentication solution to deploy throughout the entire transaction cycle, and can provide consumers with a simple, intuitive approach to fighting fraud. In March of 2022, Mitek acquired HooYu Ltd.

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Our acquisition of HooYu Ltd. in 2022 further bolstered our identity verification leadership through both KYC capabilities and rapid orchestration capabilities, linking biometrics with real-time data aggregation across credit bureaus, sanctions lists, and law enforcement databases.

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(“HooYu”), a leading KYC technology provider in the United Kingdom. Such technology helps to ensure businesses know the true identity of their customers by linking biometric verification with real-time data aggregation across many different sources, including credit bureaus, international sanctions lists, local law-enforcement, and others.

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These strategic integrations enable Mitek to provide a comprehensive, single-source identity verification and fraud prevention solution that adapts to the sophisticated fraud landscape of today. Addressing a Rapidly Evolving Cybersecurity and Fraud Landscape With generative AI’s rise, the financial sector faces unprecedented challenges, as deepfake and voice cloning technologies create new risks.

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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.

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To meet these threats, Mitek’s identity verification solutions now integrate new forms of manipulation detection to counter advanced, AI-driven fraud tactics by detecting digital manipulation, including artifacts from deepfake engines and signs of visible tampering. We continue to innovate with automated and layered security features to effectively address emerging risks.

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These partners integrate our products into their solutions to meet the needs of their customers, typically provisioning Mitek services through their respective platforms. Product and Technology Overview Technology During the twelve months ended September 30, 2023, we had one operating segment: the development, sale, and service of our proprietary software solutions related to mobile image capture and identity verification.

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Global Reach and Trusted Partnerships Mitek’s identity verification solutions are marketed and delivered worldwide through a blend of direct sales teams in the North America and Europe, and through channel partnerships with leading financial services and identity verification providers.

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Mobile Fill® Mobile Fill®, which includes automatic image capture, minimizes the number of clicks and expedites form fill completion. In mere seconds, and just by taking a photo of an identity document, people can easily complete application forms and quickly become approved customers.

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These partners embed Mitek solutions into their platforms, amplifying our ability to meet the needs of their customers and helping establish Mitek as the trusted backbone for identity security across high-risk industries.

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Organizations can use Mobile Fill® for a variety of purposes, including streamlining the process of opening a checking, savings, or credit card account, paying a bill, activating an offer, and more. Mobile Fill® is available for native apps and web browser applications.

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Vision and Differentiation Driven by a vision of providing trust and convenience through every digital interaction, Mitek enables organizations to protect themselves and their customers amid a challenging and rapidly evolving fraud and cyber landscape.

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Check Fraud Defender The premier AI-powered and cloud-hosted model for fighting check fraud, Check Fraud Defender uses Mitek’s proprietary check image science to spot visual anomalies in checks submitted by participating banks to better isolate suspected fraud and reduce bank and consumer losses.

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With recognized expertise and a broad portfolio, from mobile deposit capture to advanced AI-enabled identity verification and authentication, Mitek remains committed to leading the way in securing high-risk sectors from checks to deepfakes.

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The 2 platform provides robust identity verification through comprehensive document verification, biometric comparison, and liveness detection. The platform also simplifies the end user experience with omni-channel journey support in which users can easily switch between a mobile and desktop experience without losing their journey progress, or pause and pick up their journey at a later time via a different device.

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MiPass ® MiPass®, with its state-of-the-art facial and voice biometric capabilities, provides increased protection against today’s most sophisticated forms of identity theft and increasingly dangerous fraud techniques, such as deepfakes and synthetic identities. These technologies ensure the highest level of security against evolving threats while delivering a superior consumer experience.

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It analyzes over 24 distinct visual elements of checks submitted by participating banks, enabling the detection of visual anomalies and potential fraud. This comprehensive analysis helps banks reduce fraud-related losses and enhances their ability to protect both the institution and its customer.

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As more interactions move online, passwords are a challenging and a highly imperfect solution for granting account access to customers. Asking trusted customers to re-assert their identity at every touchpoint only leads to frustration and abandonment and passwords leave customers vulnerable to identity theft and account takeover attacks.

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MiVIP® combines facial biometrics, liveness detection, ID document validation, database checks, geolocation, digital footprint analysis, and more to provide the clearest picture of who is requesting access to a business’ services. This multi-layered approach ensures comprehensive protection against fraud, enabling businesses to verify identities with precision while mitigating sophisticated threats, including synthetic identities and deepfakes.

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The availability, simplicity, and convenience of biometrics on consumer devices has opened the door for organizations in all industries to transform the trusted customer experience.

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A key differentiator of MiVIP is its focus on enhancing the user experience. The platform supports omni-channel journeys, allowing users to seamlessly transition between devices—mobile, desktop, or others—without losing progress. This flexibility minimizes friction, making it ideal for diverse industries, including financial services, telecommunications, and e-commerce.

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MiPass® strengthens a business’s trust in a consumer’s real-world identity using a sophisticated combination of biometrics that are extremely difficult to falsify – face, liveness detection, and voice allowing organizations to replace passwords and one-time passcodes with biometric authentication that can be easily embedded into existing platforms and customer experiences.

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MiVIP further empowers businesses by offering modular, scalable solutions that can adapt to the unique needs of highly regulated environments. By combining advanced security features, streamlined deployment, and user-friendly design, MiVIP exemplifies Mitek's commitment to delivering a trusted and comprehensive identity verification platform that empowers organizations to protect their customers and their ecosystems.

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ID_CLOUD™ ID_CLOUD™ is a fully automated identity verification solution that can be integrated into a customer’s application to instantly read and validate identity documents. ID_CLOUD™ automated technology enables global enterprises to improve their customer acquisition technology while meeting AML requirements in a safe and cost-effective manner. This solution is available in the cloud, via mobile websites, and desktop applications.

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MiPass ® MiPass® is a next-generation authentication solution combining advanced facial and voice biometrics with passive liveness detection to safeguard against sophisticated fraud techniques such as deepfakes, synthetic identities, and identity theft.

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IDLive® Face is iBeta Levels 1 and 2 Presentation Attack Detection (“PAD”) compliant and is used to process millions of monthly transactions for customers worldwide. IDVoice® IDVoice® is a robust AI-driven voice biometric engine that enables fast, convenient authentication on mobile, web, and telephone channels.

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As traditional passwords become increasingly vulnerable and cumbersome for users, MiPass transforms the authentication process by offering a seamless, secure alternative that eliminates the need for passwords and one-time passcodes. MiPass® is uniquely differentiated by its ability to provide multimodal biometric authentication that is easy to implement and integrate into existing platforms.

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We predict growth in our deposits business as a result of the increased consumer adoption of digital financial services provided to them by their banks and identity verification products based on current trends in payments, online lending, more stringent regulations, growing usage of sharing apps and online marketplaces, and the ever-increasing demand for digital services.

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This flexibility ensures organizations can enhance security without compromising customer experience. The platform's passive liveness detection further elevates its defenses, making it resistant to even the most sophisticated fraud attempts. Recognized for its innovation and market leadership, MiPass has received multiple industry accolades, including awards for excellence in biometric technology and fraud prevention.

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IDLive® Face has been recognized as a top performer in the NIST facial presentation attack detection evaluations, affirming its leadership in security and convenience. Most recently, the product achieved unparalleled industry-leading liveness results in U.S. Homeland Security evaluation of Remote Identity Validation Systems.

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IDLive® Voice IDLive® Voice helps stop spoofing attacks on voice biometric systems by distinguishing live voice from synthesized speech, voice deepfake clones, and recordings. IDLive® Voice Clone Detection IDLive® Voice Clone Detection works as a classifying system distinguishing human voices from synthesized speech, voice deepfake clones, and text to speech capabilities.

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The negative outcomes of fraud and cyber-attacks encompass financial losses, brand damage, and loss of loyal customers, which we predict will lead to growth in demand for identity verification and sophisticated fraud detection, prevention and management products.

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Variability and Quarterly Results Occasionally, the timing of large one-time orders, such as those associated with large customer refresh cycles or significant volume rollouts, creates variability in our quarterly results.

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Government Regulation As a company with global operations, we are subject to the laws of the United States and multiple foreign jurisdictions in which we operate and the rules and regulations of various governing bodies, which may differ among jurisdictions. For additional information, see the risk factors herein in “Item 1A.

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Risk Factors” and the subheading “Risks Related to Regulation and Compliance.” 5 Human Capital Resources As of September 30, 2024, we had 630 employees, 178 in the U.S. and 452 internationally, 565 of which are full time.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

71 edited+63 added−126 removed140 unchanged

2023 filing

2024 filing

Biggest changeIf we do not meet our forecasts or analysts’ forecasts for us, the price of our common stock may decline. • Entry into new lines of business, and our offering of new products and services may result in exposure to new risks. • Adverse economic conditions or reduced spending on information technology solutions may adversely impact our revenue and profitability. • We may need to raise additional capital to fund continuing operations and an inability to raise the necessary capital or the inability to do so on acceptable terms could threaten the success of our business. • We expect to incur additional expenses related to the integration of ID R&D, Inc. and HooYu Ltd. • We may be unable to successfully integrate our business with the respective businesses of ID R&D and HooYu or future acquisitions and realize the anticipated benefits of the acquisitions. • Our actual financial and operating results following the acquisitions of ID R&D and HooYu could differ materially from any expectations or guidance provided by us concerning our future financial and operating results. • Our annual and quarterly results have fluctuated greatly in the past and will likely continue to do so, which may cause substantial fluctuations in our common stock price. • Due to our operations in non-U.S. markets, we are subject to certain risks that could adversely affect our business, results of operations or financial condition. • Our international operations may increase our exposure to potential liability under anti-corruption, trade protection, tax, and other laws and regulations. • Fluctuations in foreign currency exchange and interest rates could adversely affect our results of operations. • An “ownership change” could limit our ability to utilize our net operating loss and tax credit carryforwards, which could result in our payment of income taxes earlier than if we were able to fully utilize our net operating loss and tax credit carryforwards. • Our cash and cash equivalents could be adversely affected if the financial institutions at which we hold our cash and cash equivalents fail. 7 • Our business could be adversely affected in the event we default under our debt agreements. • Our revenues are dependent on our ability to maintain and expand existing customer relationships and our ability to attract new customers. • The loss of one or more of our key customers could slow our revenue growth or cause our revenues to decline.

If these technologies and the related products do not achieve or continue to achieve market acceptance, our business, financial condition, and results of operations would be adversely affected. • We cannot predict the impact that the decline of the use of checks, changes in consumer behavior facilitated by advances in technologies, and the development of check alternatives, or the plateau of the penetration of active mobile banking users may have on our business. • Claims that our products infringe upon the rights, or have otherwise utilized proprietary information, of third parties may give rise to costly litigation against us or our customers who we may be obligated to indemnify, and we could be prevented from selling those products, required to pay damages, and obligated to defend against litigation or indemnify our customers. • If the patents we own or license, or our other intellectual property rights, do not adequately protect our technologies, we may lose market share to our competitors and be unable to operate our business profitably. • We face competition from several companies that may have greater resources than we do, which could result in price reductions, reduced margins, or loss of market share. • We must continue to engage in extensive research and development in order to remain competitive. • Defects or malfunctions in our products could hurt our reputation, sales and profitability. • Our lengthy sales cycles and the difficulty in predicting timing of sales or delays may impair our operating results. • Our historical order flow patterns, which we expect to continue, have caused forecasting difficulties for us.

If these technologies and the related products do not achieve or continue to achieve market acceptance, our business, financial condition, and results of operations would be adversely affected. • We cannot predict the impact that the decline of the use of checks, changes in consumer behavior facilitated by advances in technologies, and the development of check alternatives, or the plateau of the penetration of active mobile banking users may have on our business. • Claims that our products infringe upon the rights, or have otherwise utilized proprietary information, of third parties may give rise to costly litigation against us or our customers who we may be obligated to indemnify, and we could be prevented from selling those products, required to pay damages, and obligated to defend against litigation or indemnify our customers. • If the patents we own or license, or our other intellectual property rights, do not adequately protect our technologies, brands or other intellectual property, we may lose market share to our competitors and be unable to operate our business profitably. • We face competition from several companies that may have greater resources than we do, which could result in price reductions, reduced margins, or loss of market share. • We must continue to engage in extensive research and development in order to remain competitive. • Defects or malfunctions in our products could hurt our reputation, sales and profitability. • Our lengthy sales cycles and the difficulty in predicting timing of sales or delays may impair our operating results. • Our historical order flow patterns, which we expect to continue, have caused forecasting difficulties for us.

Potential difficulties we may encounter as part of the integration process include, but are not limited to, the following: • complexities associated with managing our business and the respective businesses of ID R&D and HooYu following the completion of the acquisition, including the challenge of integrating complex systems, technology, networks, and other assets of each of the companies in a seamless manner that minimizes any adverse impact on customers, suppliers, employees, and other constituencies; • integrating the workforces of the companies while maintaining focus on providing consistent, high quality customer service; and • potential unknown liabilities and unforeseen increased expenses or delays associated with the acquisitions, including costs to integrate the companies that may exceed anticipated costs.

Potential difficulties we may encounter as part of the integration process include, but are not limited to, the following: • complexities associated with managing our business and the respective businesses of ID R&D and HooYu following the completion of the acquisition, including the challenge of integrating complex systems, technology, networks, and other assets of each of the companies in a seamless manner that minimizes any adverse impact on customers, suppliers, employees, and other constituencies; 12 • integrating the workforces of the companies while maintaining focus on providing consistent, high quality customer service; and • potential unknown liabilities and unforeseen increased expenses or delays associated with the acquisitions, including costs to integrate the companies that may exceed anticipated costs.

If we are unable to assert that our internal control over financial reporting is effective, or if our independent registered public accounting firm is unable to express an unqualified opinion as to the effectiveness of our internal control over financial reporting, investors may lose confidence in the accuracy and completeness of our financial reports, the market price of our common stock could be adversely affected and we could become subject to litigation or investigations by the stock exchange on which 22 our securities are listed, the SEC or other regulatory authorities, which could require additional financial and management resources.

If we are unable to assert that our internal control over financial reporting is effective, or if our independent registered public accounting firm is unable to express an unqualified opinion as to the effectiveness of our internal control over financial reporting, investors may lose confidence in the accuracy and completeness of our financial reports, the market price of our common stock could be adversely affected and we could become subject to litigation or investigations by the stock exchange on which our securities are listed, the SEC or other regulatory authorities, which could require additional financial and management resources.

In addition, if we experience customer dissatisfaction with customers in the future, we may find it more difficult to increase use of our solutions within 17 our existing customer base and it may be more difficult to attract new customers, or we may be required to grant credits or refunds, any of which could negatively impact our operating results and materially harm our business.

In addition, if we experience customer dissatisfaction with customers in the future, we may find it more difficult to increase use of our solutions within our existing customer base and it may be more difficult to attract new customers, or we may be required to grant credits or refunds, any of which could negatively impact our operating results and materially harm our business.

Because of the legal challenges presented by these court and data protection authority decisions, there is uncertainty regarding the legal basis for data transfers to the U.S., which could lead to interruption of such transfers. The complex nature and shifting laws related to EU/UK/Switzerland to U.S. data transfers could cause operational interruptions, liabilities and reputational harm.

Because of the legal challenges presented by these court and data protection authority decisions, there is continuing uncertainty regarding the legal basis for data transfers to the U.S., which could lead to interruption of such transfers. The complex nature and shifting laws related to EU/UK/Switzerland to U.S. data transfers could cause operational interruptions, liabilities and reputational harm.

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 March 13, 9 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.

The CCPA gives California residents expanded rights to access and delete their personal information, opt out of certain personal information sharing and receive detailed information about how their personal information is used by requiring covered companies to provide new disclosures to California consumers (as that term is broadly defined) and provides such consumers new ways to opt-out of certain sales of personal information.

The CCPA gives California residents expanded rights to access and delete their personal information, opt out of certain personal information sharing 16 and receive detailed information about how their personal information is used by requiring covered companies to provide new disclosures to California consumers (as that term is broadly defined) and provides such consumers new ways to opt-out of certain sales of personal information.

Risks Associated With Our Business and Operations We currently derive substantially all of our revenue from a few types of technologies. If these technologies and the related products do not achieve or continue to achieve market acceptance, our business, financial condition, and results of operations would be adversely affected.

Risks Associated With Our Business and Operations 8 We currently derive substantially all of our revenue from a few types of technologies. If these technologies and the related products do not achieve or continue to achieve market acceptance, our business, financial condition, and results of operations would be adversely affected.

Failure to manage these risks, or failure of any product or service offerings to be successful and profitable, could have a material adverse effect on our financial condition and results of operations. Adverse economic conditions or reduced spending on information technology solutions may adversely impact our revenue and profitability.

Failure to manage 11 these risks, or failure of any product or service offerings to be successful and profitable, could have a material adverse effect on our financial condition and results of operations. Adverse economic conditions or reduced spending on information technology solutions may adversely impact our revenue and profitability.

If we were to lose a channel partner relationship, we do not believe such a loss would adversely affect our operations because either we or another channel 13 partner could sell our products to the end-users that had purchased products from the channel partner we lost.

Furthermore, the enforceability of similar choice of forum provisions in other companies’ governing documents has been challenged in legal proceedings, and it is possible that a court could find these types of provisions to be inapplicable or unenforceable.

Furthermore, the enforceability of similar choice of forum provisions in other companies’ governing documents has been challenged 19 in legal proceedings, and it is possible that a court could find these types of provisions to be inapplicable or unenforceable.

These and other requirements could increase the cost of compliance for us and our customers, restrict our and our customers’ ability to store and process data, negatively impact our ability to offer our solutions in certain locations and limit our customers’ ability to deploy our solutions globally.

These and other requirements could increase the cost of compliance for us and our customers, restrict our and our customers’ ability to store and 14 process data, negatively impact our ability to offer our solutions in certain locations and limit our customers’ ability to deploy our solutions globally.

Any material decline in available funding or our ability to access our cash and cash equivalents could adversely impact our results of operations and liquidity. Our business could be adversely affected in the event we default under our debt agreements.

Any material decline in available funding or our ability to access our cash and cash equivalents could adversely impact our results of operations and liquidity. 15 Our business could be adversely affected in the event we default under our debt agreements.

Our ability to compete effectively with our mobile imaging software products depends upon our ability to meet changing market conditions and develop enhancements to our products on a timely basis in order to maintain our competitive advantage. The markets for products incorporating mobile imaging software technology and products are characterized by rapid advancements in technology and changes in user preferences.

Our ability to compete effectively depends upon our ability to meet changing market conditions and develop enhancements to our products on a timely basis in order to maintain our competitive advantage. The markets for products incorporating mobile imaging and voice software technology and products are characterized by rapid advancements in technology and changes in user preferences.

We currently anticipate that our available capital resources and operating cash flows will be sufficient to meet our expected working capital and capital expenditure requirements for at least the next 12 months. However, such resources may not be sufficient to fund the long-term growth of our business.

We currently anticipate that our available capital resources and operating cash flows will be sufficient to meet our expected working capital and capital expenditure requirements for at least the next 12 months and the foreseeable future. However, such resources may not be sufficient to fund the long-term growth of our business.

If we do not meet our forecasts or analysts’ forecasts for us, the price of our common stock may decline. 11 Historically, a significant portion of our sales have resulted from shipments during the last few weeks of the quarter from orders received in the final month of the applicable quarter.

If we do not meet our forecasts or analysts’ forecasts for us, the price of our common stock may decline. Historically, a significant portion of our sales have resulted from orders during the last few weeks of the quarter from orders received in the final month of the applicable quarter.

On August 11, 2022, we were notified by Nasdaq that we were not in compliance with Nasdaq Listing Rule 5250(c)(1) (the “Listing Rule”), which requires that a listed company timely file all required periodic financial reports with the SEC as a result of our failure to file our Quarterly Report on Form 10-Q for the period ended June 30, 2022.

For example, on August 11, 2022, we were notified by Nasdaq that we were not in compliance with Nasdaq Listing Rule 5250(c)(1), which requires that a listed company timely file all required periodic financial reports with the SEC as a result of our failure to file our Quarterly Report on Form 10-Q for the period ended June 30, 2022.

Therefore, if anticipated shipments in any quarter do not occur or are delayed, expenditure levels could be disproportionately high as a percentage of sales, and our operating results for that quarter would be adversely affected.

Therefore, if anticipated orders in any quarter do not occur or are delayed, expenditure levels could be disproportionately high as a percentage of sales, and our operating results for that quarter would be adversely affected.

The risks inherent in global operations include: • lack of familiarity with, and unexpected changes in, foreign laws and legal standards, including employment laws and privacy laws, which may vary widely across the countries in which we sell our products; • increased expense to comply with U.S. laws that apply to foreign corporations, including the Foreign Corrupt Practices Act (the “FCPA”); • compliance with, and potentially adverse tax consequences of foreign tax regimes; • fluctuations in currency exchange rates, currency exchange controls, price controls, and limitations on repatriation of earnings; • local economic conditions; • increased expense related to localization of products and development of foreign language marketing and sales materials; • longer accounts receivable payment cycles and difficulty in collecting accounts receivable in foreign countries; • increased financial accounting and reporting burdens and complexities; • restrictive employment regulations; • difficulties and increased expense in implementing corporate policies and controls; • international intellectual property laws, which may be more restrictive or may offer lower levels of protection than U.S. law; 14 • compliance with differing and changing local laws and regulations in multiple international locations, including regional data privacy laws, as well as compliance with U.S. laws and regulations where applicable in these international locations; and • limitations on our ability to enforce legal rights and remedies.

The risks inherent in global operations include: 13 • lack of familiarity with, and unexpected changes in, foreign laws and legal standards, including employment laws, Artificial Intelligence, and privacy laws, which may vary widely across the countries in which we sell our products; • increased expense to comply with U.S. laws that apply to foreign corporations, including the Foreign Corrupt Practices Act (the “FCPA”); • compliance with, and potentially adverse tax consequences of foreign tax regimes; • fluctuations in currency exchange rates, currency exchange controls, price controls, and limitations on repatriation of earnings; • local economic conditions; • increased expense related to localization of products and development of foreign language marketing and sales materials; • longer accounts receivable payment cycles and difficulty in collecting accounts receivable in foreign countries; • increased financial accounting and reporting burdens and complexities; • restrictive employment regulations; • difficulties and increased expense in implementing corporate policies and controls; • international intellectual property laws, which may be more restrictive or may offer lower levels of protection than U.S. law; • compliance with differing and changing local laws and regulations in multiple domestic and international jurisdictions, including Artificial Intelligence and data privacy laws, as well as compliance with U.S. laws and regulations where applicable in these jurisdictions; and • limitations on our ability to enforce legal rights and remedies.

As a result, we believe that period-to-period comparisons of our results of operations are not and will not necessarily be meaningful, and you should not rely upon them as an indication of future performance.

As a result, we believe that period-to-period comparisons of our results of operations are not and will not necessarily be meaningful, and an investor should not rely upon them as an indication of future performance.

If our operating results for a quarter are below the expectations of public market analysts and investors, it could have a material adverse effect on the price of our common stock. Entry into new lines of business, and our offering of new products and services, resulting from our acquisitions may result in exposure to new risks.

While we have implemented policies, training, and internal controls designed to reduce the risk of corrupt payments, our employees, vendors, or agents may violate our policies. Our acquisitions of ID Checker, ICAR, A2iA, ID R&D, and HooYu may significantly increase our exposure to potential liability under Anti-Corruption Laws.

While we have implemented policies, training, and internal controls designed to reduce the risk of corrupt payments, our employees, vendors, or agents may violate our policies. Our acquisitions of ID R&D, and HooYu may significantly increase our exposure to potential liability under Anti-Corruption Laws.

We cannot fully predict the impact of these state laws, including the California Legislation, on our business or operations, but it may require us to modify our data processing practices and policies and to incur substantial costs and expenses in an effort to comply.

We cannot fully predict the impact of these state laws on our business or operations, but it may require us to modify our data processing practices and policies and to incur substantial costs and expenses in an effort to comply.

The costs of operating in The Netherlands, Spain, France, and other European markets are subject to the effects of exchange fluctuations of the Euro and British pound sterling 15 against the U.S. dollar.

The costs of operating in The United Kingdom, France, the Netherlands, Spain and other European markets are subject to the effects of exchange fluctuations of the Euro and British pound sterling against the U.S. dollar.

We cannot assure you that we can meaningfully protect all our rights in our unpatented proprietary technology or that others will not independently develop substantially equivalent proprietary technology or otherwise gain access to our unpatented proprietary technology.

We cannot assert that we can meaningfully protect all our rights in our unpatented proprietary technology or that others will not independently develop substantially equivalent proprietary technology or otherwise gain access to our unpatented proprietary technology.

If any of the following risks actually occur, our business, financial condition, results of operations, cash flows, projected results, and future prospects could be materially and adversely affected. In these circumstances, the market price of our common stock could decline, and you could lose all or part of your investment or interest.

If any of the following risks actually occur, our business, financial condition, results of operations, cash flows, projected results, and future prospects could be materially and adversely affected. In these circumstances, the market price of our common stock could decline, and an investor could lose all or part of their investment or interest.

In the United States, many state legislatures have adopted legislation that regulates how businesses operate online, including measures relating to privacy, data security and data breaches. Laws in all states require businesses to provide notice to customers whose personally identifiable information has been disclosed as a result of a data breach.

In the United States, many states have adopted legislation that regulates how businesses operate online, including measures relating to privacy, data security and data breaches. Laws in all states require businesses to provide notice to customers whose personal information has been disclosed as a result of a data breach.

Such laws and regulations could restrict our customers' ability to collect and use web browsing data and personal information, or utilize biometrics-derived information, which may reduce our customers' demand for our solutions. The laws in this area are complex and developing rapidly.

Such laws and regulations could restrict our and our customers' ability to collect and use web browsing data and personal information, which may reduce our customers' demand for our solutions. The laws in this area are complex and developing rapidly.

Our business operations are subject to interruption by natural disasters and other catastrophic events, such as fire, floods, earthquakes, power loss, telecommunications failure, cyberattack, war or terrorist attack, or epidemic or pandemic.

Natural disasters or other catastrophic events may disrupt our business. Our business operations are subject to interruption by natural disasters and other catastrophic events, such as fire, floods, earthquakes, climate change, power loss, telecommunications failure, cyberattack, war or terrorist attack, or epidemic or pandemic.

Such laws and regulations require or may in the future require us or our customers to implement privacy and security policies and practices; permit individuals to access, correct or delete personal information stored or maintained by us or our customers; inform individuals of security incidents that affect their personal information; and, in some cases, obtain consent to use personal information for specified purposes.

Such laws and regulations require or may in the future require us or our customers to implement additional and revise existing privacy and security policies and practices; permit individuals to access, correct or delete personal information stored or maintained by us or our customers; inform individuals of security breaches that affect their personal information; and, in some cases, obtain consent to use certain personal information for certain purposes.

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.

While these lawsuits do not 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.

Other proposed legislation could, if enacted, impose additional requirements and prohibit the use of specific technologies, such as those that track individuals' activities on web pages or record when individuals click on a link contained in an email message, or those relating to collection and use of biometric identifiers, and systems reliant on such technologies.

Other proposed laws and regulations could, if enacted, impose additional requirements and prohibit the use of specific technologies, such as those that track individuals' activities on web pages or record when individuals click on a link contained in an email message and systems reliant on such technologies.

We cannot predict the impact that the decline of the use of checks, changes in consumer behavior facilitated by advances in technologies, and the development of check alternatives, or the plateau of the penetration of active mobile banking users may have on our business. Over the last few years, the use of checks has started to decline.

Evolving domestic and international data privacy regulations may restrict our ability, and that of our customers, to solicit, collect, process, disclose and use personal information or may increase the costs of doing so, which could harm our business.

Risks Related to Privacy, Artificial Intelligence, and Cybersecurity Evolving domestic and international data privacy and Artificial Intelligence laws and regulations may restrict our ability, and that of our customers, to solicit, collect, process, transfer, disclose and use personal information or may increase the costs of doing so, which could harm our business.

Additional discussion of the risks summarized in this risk factor summary, and other risks that we face, can be found below and should be carefully considered, together with other information in this Annual Report on Form 10-K and our other filings with the Securities and Exchange Commission before making investment decisions regarding our common stock. • We currently derive substantially all of our revenue from a few types of technologies.

Certain state laws may be more stringent or broader in scope, or offer greater individual rights, with respect to confidential, sensitive and personal information than federal, international or other state laws, and such laws may differ from each other, which may complicate compliance efforts.

As of September 30, 2023, we had 1,425,042 shares of common stock available for issuance pursuant to future grants of equity awards under our existing equity compensation plans, which may limit our ability to provide equity incentive awards to existing and future employees.

As of September 30, 2024, we had 4,671,484 shares of common stock available for issuance pursuant to future grants of equity awards under our existing equity compensation plans, which may limit our ability to provide equity incentive awards to existing and future employees.

The sales cycle for our products can be six months or more and varies substantially from customer to customer. Because we sell complex and deeply integrated solutions, it can take many months of customer education to secure sales and implement our product.

The sales cycle for our products can be six months or more and varies substantially from customer to customer. Because we sell complex and deeply integrated solutions, the sale of our software and services may require a significant commitment of capital and other resources and it can take many months of customer education to secure sales and implement our product.

ID Checker, ICAR, A2iA, ID R&D, and HooYu were not historically subject to the FCPA, Sarbanes-Oxley, or other laws, to which we are subject, and we may become subject to liability if in the past, ID Checker’s, ICAR’s, A2iA’s, ID R&D’s, and HooYu’s operations did not comply with such laws.

ID R&D, and HooYu were not historically subject to the FCPA, the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley”), or other laws, to which we are subject, and we may become subject to liability if in the past, ID R&D’s, and HooYu’s operations did not comply with such laws.

If we were to lose the services of one or more of our key personnel, or if we fail to attract and retain additional qualified personnel, it could materially and adversely affect our business.

We are highly dependent on the key members of our management team and other key technical personnel. If we were to lose the services of one or more of our key personnel, or if we fail to attract and retain additional qualified personnel, it could materially and adversely affect our business.

Federal, state and foreign governments and supervising authorities have enacted, and may in the future enact, laws and regulations concerning the solicitation, collection, processing, disclosure or use of consumers' personal information, including sensitive information such as biometric data.

On October 6, 2023, the parties filed a Notice of Settlement and Joint Motion and Stipulation of Dismissal. All claims and causes of actions 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.

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 addition, as the mobile banking market matures, the growth of active mobile banking users is slowing, which may negatively impact our ability to grow our business.

In addition, as the mobile banking market matures, the growth of active mobile banking users is slowing, which may negatively impact our ability to grow our business, which therefore could adversely affect our financial condition and results of operations.

Changing industry standards and industry self-regulation regarding the collection, use and disclosure of data may have similar effects. Existing and future privacy and data protection laws and increasing sensitivity of consumers to unauthorized disclosures and use of personal information may also negatively affect the public's perception of our customers' sales practices.

Existing and future privacy and data protection laws and increasing sensitivity of consumers to unauthorized disclosures and use of personal information may also negatively affect the public's perception of our customers' sales practices.

Therefore, increases or decreases in the value of the U.S. dollar against other major currencies will affect our net revenues, net income (loss), and the value of balance sheet items denoted in foreign currencies, and can adversely affect our operating results. Compliance with changing regulations concerning corporate governance and public disclosure may result in additional expenses.

If the patents we own or license, or our other intellectual property rights, do not adequately protect our technologies, we may lose market share to our competitors and be unable to operate our business profitably. Our success depends significantly on our ability to protect our rights to the technologies used in our products, including Mobile Deposit®.

If the patents we own or license, or our other intellectual property rights, do not adequately protect our technologies, brands or other intellectual property, we may lose market share to our competitors and be unable to operate our business profitably.

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.

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.

Further, a change in a majority of the Board may, under certain circumstances, result in a change of control under certain employment agreements we have with our executive management and our 2002 Stock Option Plan, 2010 Stock Option Plan, Amended and Restated 2012 Incentive Plan, Amended and Restated 2020 Incentive Plan, Director Restricted Stock Unit Plan, and any equity based awards issued thereunder.

However, such agreements may not be enforceable or may not provide meaningful protection for our proprietary information in the event of unauthorized use or disclosure or other breaches of the agreements or in the event that our competitors discover or independently develop similar or identical designs or other proprietary information. 10 In addition, we rely on the use of registered and common law trademarks with respect to the brand names of some of our products.

The risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties not presently known to us or that we presently deem less significant may also impair our business operations.

Risk Factors The following risk factors and other information included in this Form 10-K should be carefully considered. The risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties not presently known to us or that we presently deem less significant may also impair our business operations.

Additionally, Delaware, Indiana, Iowa, Montana, Oregon, Tennessee and Texas have adopted privacy laws, which take effect from July 1, 2024 through 2026. Additional U.S. states have enacted, or are considering, similar data privacy laws.

Additionally, Delaware, Indiana, Iowa, Montana, Oregon, Tennessee, Texas, Kentucky, Maryland, Minnesota, Nebraska, New Hampshire, New Jersey, and Rhode Island have adopted privacy laws, which take effect at different dates through 2026. Additional U.S. states have enacted, or are considering, similar data privacy laws.

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”).

District Court for the Northern District of California seeking declaratory judgment that its products do not infringe certain patents held by USAA (collectively, the “Subject Patents”).

General Risk Factors If we are unable to retain and recruit qualified personnel, or if any of our key executives or key employees discontinues his or her employment with us, it may have a material adverse effect on our business. We are highly dependent on the key members of our management team and other key technical personnel.

In addition, if we are unable to continue to meet these requirements, we may not be able to remain listed on Nasdaq. 20 General Risk Factors If we are unable to retain and recruit qualified personnel, or if any of our key executives or key employees discontinues his or her employment with us, it may have a material adverse effect on our business.

If our common stock ceases to be listed for trading on Nasdaq, we expect that our common stock would be traded on the over-the-counter market.

While we have regained compliance with Nasdaq, if our common stock ceases to be listed for trading on Nasdaq, we expect that our common stock would be traded on the over-the-counter market, and that the value and liquidity of our stockholders’ investments would be materially impacted.

These competitors could, among other things: • announce new products or technologies that have the potential to replace our existing product offerings; • force us to charge lower prices; or • adversely affect our relationships with current clients. 10 We may be unable to compete successfully against our current and potential competitors and if we lose business to our competitors or are forced to lower our prices, our revenue, operating margins, and market share could decline.

If a large number of these shares are sold in the public market, the sales could adversely impact the trading price of our stock. A potential proxy contest for the election of directors at our annual meeting could result in potential operational disruption, divert our resources, and could potentially result in adverse consequences under certain of our agreements.

Risks Related to Investing in Our Common Stock A potential proxy contest for the election of directors at our annual meeting could result in potential operational disruption, divert our resources, and could potentially result in adverse consequences under certain of our agreements.

There are a number of systems and functions that are being integrated into our larger organization, including, but not limited to, management information, accounting and finance, billing, payroll and benefits, and regulatory compliance.

We expect to incur additional expenses in connection with the integration of the business, policies, procedures, operations, technologies, and systems of ID R&D and HooYu Ltd. There are a number of systems and functions that are being integrated into our larger organization, including, but not limited to, management information, accounting and finance, billing, payroll and benefits, and regulatory compliance.

The transfer of personal data from the European Union (“EU”) to the U.S. has become a significant area of potential operational and compliance risk. In 2020, the Court of Justice of the European Union (“CJEU”) and the Swiss Federal Data Protection and Information Commissioner invalidated the U.S.-EU and U.S.-Swiss Privacy Shield frameworks, respectively.

The transfer of personal data from the European Union (“EU”) to the U.S. has become a significant area of potential operational and compliance risk.

In particular, the acquisitions of ID R&D and HooYu involve the combination of companies that previously operated independently in different countries.

Our management continues to devote significant attention and resources to integrating our business practices and operations with that of ID R&D and HooYu. In particular, the acquisitions of ID R&D and HooYu involved the combination of companies that previously operated independently in different countries.

Furthermore, the costs to our customers of compliance with, and other burdens imposed by, such laws, regulations, policies and standards may limit adoption of and demand for our solutions. Risks Related to Investing in Our Common Stock From time-to-time our Board explores and considers strategic alternatives, including financings, strategic alliances, acquisitions, or the possible sale of our company.

Furthermore, the costs to our customers of compliance with, and other burdens imposed by, such laws, regulations, policies and standards may limit adoption of and demand for our solutions.

Advances in technologies have enabled the development of check alternatives like Zelle and Venmo, which have caused certain changes in consumer behavior. As check alternatives become more widely accepted by consumers, the use of checks could continue to decline, which could have a negative effect on our business.

The use of checks has declined in recent years as a result of advances in technologies that have enabled the development of check alternatives like Zelle and Venmo, which have caused certain changes in consumer behavior.

Unpredictable and unstable changes in economic conditions, including a recession, inflation, increased government intervention, or measures taken in response to a global pandemic like COVID-19, or other changes, may adversely affect our general business strategy.

Unpredictable and unstable changes in macroeconomic conditions both domestically and internationally, including a recession, inflation, changes in interest rates, changes to government policies, or other adverse market changes, may adversely affect our general business strategy.

Common law trademarks provide less protection than registered trademarks. Loss of rights in our trademarks could adversely affect our business, financial condition, and results of operations. Furthermore, the laws of foreign countries may not protect our intellectual property rights to the same extent as the laws of the U.S.

Furthermore, the laws of foreign countries may not protect our intellectual property rights to the same extent as the laws of the U.S.

Moreover, many of the expenses that will be incurred, by their nature, are difficult to estimate accurately at the present time.

Moreover, many of the expenses that will be incurred, by their nature, are difficult to estimate accurately at the present time. We may be unable to successfully integrate our business with the respective businesses of ID R&D and HooYu or future acquisitions and realize the anticipated benefits of the acquisitions.

We rely on trademark, trade secret, copyright, and patent law, as well as a combination of non-disclosure, confidentiality, and other contractual arrangements to protect our technology and rights. However, these legal protections afford only limited protection and may not adequately protect our rights or permit us to gain or maintain any competitive advantage.

However, these legal protections afford limited protection and may not adequately protect our rights or permit us to gain or maintain any competitive advantage. In addition, we cannot be assured that any of our pending patent applications will result in the issuance of a patent.

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.

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. On July 29, 2022, USAA filed another patent infringement lawsuit against Truist Bank (“Truist”) in the Eastern District of Texas.

The laws are not consistent, and compliance in the event of a widespread data breach is costly. Further, states are constantly adopting new laws or amending existing laws, requiring attention to frequently changing regulatory requirements. For example, California enacted the California Consumer Privacy Act (the “CCPA”) on June 28, 2018, which went into effect on January 1, 2020.

The laws are not identical, and compliance in the event of a widespread data breach is costly, as we must ensure our compliance with each individual state law. Further, states have continued adopting new laws or amending existing laws, requiring attention to frequently changing regulatory requirements.

These fluctuations may result in volatility in our results of operations, have an adverse effect on the market price of our common stock, or both. We face risks related to the storage of our customers’ and their end users’ confidential and proprietary information. Our products may not provide absolute security.

These fluctuations may result in volatility in our results of operations, have an adverse effect on the market price of our common stock, or both. Due to our operations in non-U.S. markets, we are subject to certain risks that could adversely affect our business, results of operations or financial condition. We generate revenue in markets outside of the U.S.

Privacy Shield was a mechanism for companies to transfer data from EU member states or Switzerland to the U.S. In its decision, the CJEU also indicated that individual EU member states could determine whether Standard Contractual Clauses (“SCCs”) (another “adequate” option for data transfers) are sufficient to securely transfer data out of the EU.

In 2023, the Data Privacy Framework was introduced as a new mechanism for companies to transfer data from EU member states, the United Kingdom, or Switzerland to the U.S after its predecessor, the Data Privacy Shield, was invalidated.

We expect to incur additional expenses related to the integration of ID R&D, Inc. and HooYu Ltd. We expect to incur additional expenses in connection with the integration of the business, policies, procedures, operations, technologies, and systems of ID R&D, a New York corporation and HooYu Ltd.

We expect to incur additional expenses related to the integration of ID R&D, Inc. and HooYu Ltd. In May 2021, Mitek acquired ID R&D, Inc., an award-winning provider of AI-based voice and face biometrics and liveness detection, and in March 2022, we acquired HooYu Ltd., a leading KYC technology provider in the United Kingdom.

Removed

We may incur increasing costs in an effort to minimize those risks and to respond to cyber incidents. • Due to our operations in non-U.S. markets, we are subject to certain risks that could adversely affect our business, results of operations or financial condition. • Our international operations may increase our exposure to potential liability under anti-corruption, trade protection, tax, and other laws and regulations. • Fluctuations in foreign currency exchange and interest rates could adversely affect our results of operations. • Compliance with changing regulations concerning corporate governance and public disclosure may result in additional expenses. 6 • We have a history of losses and we may not be able to maintain profitability in the future. • An “ownership change” could limit our ability to utilize our net operating loss and tax credit carryforwards, which could result in our payment of income taxes earlier than if we were able to fully utilize our net operating loss and tax credit carryforwards. • Our cash and cash equivalents could be adversely affected if the financial institutions at which we hold our cash and cash equivalents fail. • Our business could be adversely affected in the event we default under our debt agreements. • Our revenues are dependent on our ability to maintain and expand existing customer relationships and our ability to attract new customers. • Evolving domestic and international data privacy regulations may restrict our ability, and that of our customers, to solicit, collect, process, disclose and use personal information or may increase the costs of doing so, which could harm our business. • From time-to-time our Board explores and considers strategic alternatives, including financings, strategic alliances, acquisitions, or the possible sale of our company.

Added

Risks Associated With Our Business and Operations • We currently derive substantially all of our revenue from a few types of technologies.

Removed

Our Board may not be able to identify or complete any suitable strategic alternatives, and announcements regarding any such strategic alternatives could have an impact on our operations or stock price. • Future sales of our common stock by our insiders may cause our stock price to decline. • A potential proxy contest for the election of directors at our annual meeting could result in potential operational disruption, divert our resources, and could potentially result in adverse consequences under certain of our agreements. • Our corporate documents and the Delaware General Corporation Law (the “DGCL”) contain provisions that could discourage, delay, or prevent a change in control of our company, prevent attempts to replace or remove current management, and reduce the market price of our stock. • Our restated certificate of incorporation and third amended and restated bylaws provide for indemnification of officers and directors at our expense and limits their liability, which may result in a major cost to us and hurt the interests of our stockholders because corporate resources may be expended for the benefit of officers and/or directors. • The market price of our common stock has been volatile and your investment in our stock could suffer a decline in value. • Because we do not intend to pay cash dividends, our stockholders will benefit from an investment in our common stock only if our stock price appreciates in value. • As a result of our failure to timely file this Annual Report on Form 10-K for year ended September 30, 2023, and our Quarterly Report on Form 10-Q for the quarter ended December 31, 2023, we are currently ineligible to file new short form registration statements on Form S-3 or to have resale registration statements declared effective in a timely manner, which may impair our ability to raise capital on terms favorable to us, in a timely manner or at all. • Our third amended and restated bylaws provide that a state or federal court located within in the State of Delaware will be the sole and exclusive forum for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees. • If we are unable to retain and recruit qualified personnel, or if any of our key executives or key employees discontinues his or her employment with us, it may have a material adverse effect on our business. • Legislation and governmental regulations enacted in the U.S. and other countries that apply to us or to our customers may require us to change our current products and services and/or result in additional expenses, which could adversely affect our business and results of operations. • Future sales of our common stock could cause the market price of our common stock to decline. • If financial or industry analysts do not publish research or reports about our business, or if they issue negative or misleading evaluations of our stock, our stock price and trading volume could decline. • We have identified material weaknesses in our internal control over financial reporting, and if our remediation of such material weaknesses is not effective, or if we fail to develop and maintain an effective system of disclosure controls and internal control over financial reporting, our ability to produce timely and accurate financial statements or comply with applicable laws and regulations could be impaired. • Natural disasters or other catastrophic events may disrupt our business. 7 Risk Factors The following risk factors and other information included in this Form 10-K should be carefully considered.

Added

Risks Related to Privacy, Artificial Intelligence, and Cybersecurity • Evolving domestic and international data privacy and Artificial Intelligence laws and regulations may restrict our ability, and that of our customers, to solicit, collect, process, transfer, disclose and use personal information or may increase the costs of doing so, which could harm our business. • Recent and proposed laws regarding the use of facial recognition technology and the processing of biometric data could increase compliance costs or otherwise make it harder for us to conduct our business, require us to change our business practices, lead to regulatory investigations or actions, and have a material adverse effect on demand for certain of our products. • Our business and operations are subject to a variety of regulatory requirements in the countries in which we operate or in which we offer our solutions, including, among other things, with respect to artificial intelligence (“AI”) and machine-learning (“ML”) technologies that may be difficult and expensive to comply with and that could negatively impact our business. • Security breaches or cyberattacks could expose us to significant liability, cause our business and reputation to suffer and harm our competitive position.

Removed

On July 7, 2018, United Services Automobile Association (“USAA”) filed a lawsuit against Wells Fargo Bank, N.A.

Added

Risks Related to Investing in Our Common Stock • A potential proxy contest for the election of directors at our annual meeting could result in potential operational disruption, divert our resources, and could potentially result in adverse consequences under certain of our agreements. • Our third amended and restated bylaws provide that a state or federal court located within in the State of Delaware will be the sole and exclusive forum for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees. • We may not be able to maintain our listing on The Nasdaq Stock Market LLC (“Nasdaq”), or trading on the Nasdaq Capital Market may otherwise be halted or suspended, which may negatively impact the price of our common stock.

Removed

(“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”).

Added

General Risk Factors • If we are unable to retain and recruit qualified personnel, or if any of our key executives or key employees discontinues his or her employment with us, it may have a material adverse effect on our business. • Legislation and governmental regulations enacted in the U.S. and other countries that apply to us or to our customers may require us to change our current products and services and/or result in additional expenses, which could adversely affect our business and results of operations. • Natural disasters or other catastrophic events may disrupt our business.

Removed

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.

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Item 2. Properties

Properties — owned and leased real estate

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2023 filing

2024 filing

Biggest changeITEM 2. PROPERTIES. Our principal executive offices are located in approximately 29,000 square feet of office space in San Diego, California and the term of the lease continues through June 30, 2024.

Biggest changeITEM 2. PROPERTIES. Our principal executive offices are located in approximately 7,500 square feet of office space in San Diego, California and the term of the lease continues through August 13, 2031.

Our other offices are located in Paris, France; Amsterdam, The Netherlands; New York, New York; Barcelona, Spain; and London, United Kingdom, each of which does not contain material lease obligations for us. We believe our existing properties are in good condition and are sufficient and suitable for the conduct of our business.

Our other offices are located in Paris, France; Amsterdam, The Netherlands; New York, New York; Barcelona, Spain; Leeds, United Kingdom; and London, United Kingdom, each of which does not contain material lease obligations for us. We believe our existing properties are in good condition and are sufficient and suitable for the conduct of our business.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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2023 filing

2024 filing

Biggest changeITEM 3. LEGAL PROCEEDINGS. For a description of legal proceedings, refer to Note 10 of the accompanying notes to Consolidated Financial Statements included in this Form 10-K, which is incorporated herein by reference. ITEM 4. MINE SAFETY DISCLOSURES. Not applicable. 24 PART II

Biggest changeAt this time, we do not expect the outcome of this matter to have a material adverse effect on our consolidated results of operations, cash flows, or financial position. For a description of legal proceedings, refer to Note 11 of the accompanying notes to Consolidated Financial Statements included in this Form 10-K, which is incorporated herein by reference. ITEM 4.

Added

ITEM 3. LEGAL PROCEEDINGS. As previously disclosed, we restated our financial results for certain periods on October 27, 2022 and May 8, 2023. Following those restatements, the SEC opened an inquiry into our accounting practices and thereafter opened a formal investigation. We are cooperating with the ongoing investigation. The duration, scope, and outcome of this investigation are difficult to predict.

Added

MINE SAFETY DISCLOSURES. Not applicable. 22 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

4 edited+5 added−5 removed1 unchanged

2023 filing

2024 filing

Biggest changeAs of March 12, 2024, there were 226 stockholders of record of our common stock and an undetermined number of beneficial owners. Dividends We have not paid any cash dividends on our common stock. We currently intend to retain earnings for use in our business and do not anticipate paying cash dividends in the foreseeable future.

Biggest changeDividends We have not historically paid any cash dividends on our common stock. We currently intend to retain earnings for use in our business and do not anticipate paying cash dividends in the foreseeable future. Any future payment of dividends would be dependent upon our financial condition, capital requirements, earnings and cash flow.

The following graph and table compare the cumulative total stockholder return data for our common stock from September 30, 2018 through September 30, 2023 to the cumulative return over such period of (i) a broad market index, the Nasdaq Composite Index and (ii) an industry index, the Nasdaq-100 Technology Sector Index.

The following graph and table compare the cumulative total stockholder return data for our common stock from September 30, 2019 through September 30, 2024 to the cumulative return over such period of (i) a broad market index, the Nasdaq Composite Index and (ii) an industry index, the Nasdaq-100 Technology Sector Index.

The graph and table assume that $100 was invested in our common stock at $7.05 per share on September 30, 2018, and in each of the referenced indices, and assumes reinvestment of all dividends. The stock price performance on the following graph and table is not necessarily indicative of future stock price performance.

The graph and table assume that $100 was invested in our common stock at $9.65 per share on September 30, 2019, and in each of the referenced indices, and assumes reinvestment of all dividends. The stock price performance on the following graph and table is not necessarily indicative of future stock price performance.

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. Common Stock Our common stock, $0.001 par value, is traded on the Nasdaq Capital Market under the ticker symbol “MITK.” The closing sales price of our common stock on March 12, 2024 was $11.86.

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. Common Stock Our common stock, $0.001 par value, is traded on the Nasdaq Capital Market under the ticker symbol “MITK.” As of November 29, 2024, there were 216 stockholders of record of our common stock, although there are an undetermined number of beneficial owners.

Removed

Sales of Equity Securities During the Period All equity securities that we sold during the period covered by this Form 10-K that were not registered under the Securities Act have been previously reported in our quarterly reports on Form 10-Q or on our current reports on Form 8-K.

Added

Unregistered Sales of Equity Securities During the Period There were no unregistered sales of the Company’s equity securities during the fiscal year ended September 30, 2024.

Removed

Added

Comparison of 5 Year Cumulative Total Return Among Mitek Systems, Inc., the Nasdaq Composite Index and the Nasdaq-100 Technology Sector Index The graph above reflects the following values: 2019 2020 2021 2022 2023 2024 MITK $ 100.00 $ 132.02 $ 191.71 $ 94.92 $ 111.09 $ 89.84 Nasdaq Composite $ 100.00 $ 139.61 $ 180.62 $ 132.21 $ 165.26 $ 227.38 Nasdaq-100 Technology Sector Index $ 100.00 $ 134.16 $ 180.37 $ 119.95 $ 166.38 $ 218.86 Issuer Purchases of Equity Securities 23 Share repurchases of the Company’s common stock for the three months ended September 30, 2024 were as follows (in millions, except for average price paid per share): Period Total number of shares (or units) purchased (1) Average price paid per share (or unit) Total number of shares (or units) purchased as part of publicly announced plans or programs (1) Maximum number (or approximate dollar value) of shares (or units) that may yet be purchased under the plans or programs July 1, 2024 — July 31, 2024 515,581 $ 11.41 515,581 $ 34,135,283 August 1, 2024 — August 31, 2024 525,000 $ 9.25 525,000 $ 29,278,802 September 1, 2024 — September 30, 2024 387,300 $ 8.46 387,300 $ 26,002,083 (1) On May 13, 2024, the Company issued a press release announcing that its Board of Directors authorized a share repurchase program for up to $50 million of its common stock.

Removed

The shares were sold at $8.39 per share, which was equal to 85% of the fair market value of a share of the Common Stock on the exercise date, totaling $596,823 in proceeds.

Added

The share repurchase program was effective as of May 16, 2024 and will expire on May 16, 2026. The timing, price and actual number of shares of common stock repurchased will depend on a variety of factors including price, market conditions and corporate and regulatory requirements.

Removed

On August 15, 2023, we sold 49,760 shares of our Common Stock to officers and employees of the Company and our subsidiaries pursuant to our ESPP in a transaction exempt from registration under Securities Act in reliance on Regulation S thereunder, Section 4(a)(2) thereof and Rule 506 of Regulation D thereunder.

Added

The repurchases may be made from time (i) through open market purchases, block trades, privately negotiated transactions, one or more trading plans adopted in accordance with Rule 10b5-1 of the Exchange Act or any combination of the foregoing, in each case in accordance with applicable laws, rules and regulations or (ii) in such other manner as will comply with the provisions of the Exchange Act.

Removed

The shares were sold at $8.288 per share, which was equal to 85% of the fair market value of a share of the Common Stock on the offering date, totaling $412,411 in proceeds. ITEM 6. [RESERVED] 26

Added

The share repurchase program does not require the Company to repurchase shares of its common stock and it may be discontinued, suspended or amended at any time. ITEM 6. [RESERVED] 24

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

54 edited+35 added−49 removed37 unchanged

2023 filing

2024 filing

Biggest changeResults of Operations Comparison of the Twelve Months Ended September 30, 2023 and 2022 The following table summarizes certain aspects of our results of operations for the twelve months ended September 30, 2023 compared to the twelve months ended September 30, 2022 ( in thousands, except percentages ): Twelve Months Ended September 30, Percentage of Total Revenue Increase (Decrease) 2023 2022 2023 2022 $ % Revenue Software and hardware $ 88,374 $ 72,928 51 % 50 % 15,446 21 % Services and other 84,178 71,876 49 % 50 % 12,302 17 % Total revenue $ 172,552 $ 144,804 100 % 100 % 27,748 19 % Cost of revenue 22,951 20,008 13 % 14 % 2,943 15 % Selling and marketing 40,551 38,841 24 % 27 % 1,710 4 % Research and development 28,988 30,192 17 % 21 % (1,204) (4) % General and administrative 43,338 26,591 25 % 18 % 16,747 63 % Amortization and acquisition-related costs 19,046 15,172 11 % 10 % 3,874 26 % Restructuring costs 2,114 1,800 1 % 1 % 314 17 % Interest expense 9,063 8,232 5 % 6 % 831 10 % Other income (expense), net 3,840 (366) 2 % — % 4,206 1,149 % Income tax benefit (provision) (2,314) 92 (1) % — % (2,406) (2,615) % Net income 8,027 3,694 5 % 3 % 4,333 117 % Revenue Total revenue increased $27.7 million, or 19%, to $172.6 million in 2023 compared to $144.8 million in 2022.

Biggest changeResults of Operations Comparison of the Twelve Months Ended September 30, 2024 and 2023 The following table summarizes certain aspects of our results of operations for the twelve months ended September 30, 2024 compared to the twelve months ended September 30, 2023 ( in thousands, except percentages ): Twelve Months Ended September 30, Percentage of Total Revenue Increase (Decrease) 2024 2023 2024 2023 $ % Revenue Software and hardware $ 81,872 $ 88,374 48 % 51 % (6,502) (7) % Services and other 90,211 84,178 52 % 49 % 6,033 7 % Total revenue $ 172,083 $ 172,552 100 % 100 % (469) — % Cost of revenue (exclusive of depreciation & amortization) 24,395 22,951 14 % 13 % 1,444 6 % Selling and marketing 40,769 40,551 24 % 24 % 218 1 % Research and development 34,642 28,988 20 % 17 % 5,654 20 % General and administrative 52,993 43,338 31 % 25 % 9,655 22 % Amortization and acquisition-related costs 15,291 19,046 9 % 11 % (3,755) (20) % Restructuring costs 1,762 2,114 1 % 1 % (352) (17) % Interest expense 9,259 9,063 5 % 5 % 196 2 % Other income (expense), net 6,119 3,840 4 % 2 % 2,279 59 % Income tax benefit (provision) 4,187 (2,314) 2 % (1) % 6,501 (281) % Net income (loss) 3,278 8,027 2 % 5 % (4,749) (59) % Revenue Total revenue decreased $0.5 million, or less than 1%, to $172.1 million in 2024 compared to $172.6 million in 2023.

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 the Company’s 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; and (3) upon the occurrence of certain corporate events or distributions on the Common Stock.

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 ended on June 30, 2021, if the last reported sale price per share of the Company’s 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; and (3) upon the occurrence of certain corporate events or distributions on the Common Stock.

The preparation of the financial statements requires us to make estimates and judgements that affect the reported amounts of assets, liabilities, revenues, and expenses and the related disclosure of contingent assets and liabilities. We review our estimates on an 34 on-going basis.

The Notes Hedge is expected to reduce the potential equity dilution upon conversion of the 2026 Notes if the daily volume-weighted average price per share of our Common Stock exceeds the strike price of the Notes Hedge. In addition, the Warrant Transactions provided us with the ability to acquire up to 7.4 million shares of our Common Stock.

Based on our current operating plan, we believe the current cash and cash equivalent balance and cash expected to be generated from operations will be adequate to satisfy our working capital needs for at least the next twelve months from the date these consolidated financial statements are filed.

The increase in cash provided by operating activities during fiscal 2023 compared to fiscal 2022 was primarily due to an increase in cash from collection of receivables of $23.3 million year over year due to improvements in our collections process, and an increase in other liabilities of $1.7 million.

The increase in cash provided by operating activities during fiscal 2023 compared to fiscal 2022 was primarily due to an increase in cash from collection of receivables of $23.8 million year over year due to improvements in our collections process, and an increase in other liabilities of $1.7 million.

Selling and Marketing Expenses Selling and marketing expenses include payroll, employee benefits, stock-based compensation, and other headcount-related costs associated with sales and marketing personnel. Selling and marketing expenses also include non-billable costs of professional services personnel, advertising expenses, product promotion costs, trade shows, and other brand awareness programs.

Selling and Marketing Expenses Selling and marketing expenses include payroll, employee benefits, stock-based compensation, and other headcount-related costs associated with sales, marketing, and customer success personnel. Selling and marketing expenses also include non-billable costs of professional services personnel, advertising expenses, product promotion costs, trade shows, and other brand awareness programs.

Cash Flows from Investing Activities Net cash used in investing activities was $6.8 million during fiscal 2023, which consisted primarily of net cash paid in connection with the HooYu Acquisition of $0.3 million and capital expenditures of $1.0 million, and net purchases of investments of $5.5 million.

Net cash used in investing activities was $6.8 million during fiscal 2023, which consisted primarily of net cash paid in connection with the HooYu Acquisition of $0.3 million and capital expenditures of $1.0 million, and net purchases of investments of $5.5 million.

The evaluations are based upon a number of factors, including 35 changes in facts or circumstances, changes in tax law, correspondence with tax authorities during the course of audits, and effective settlement of audit issues.

The evaluations are based upon a number of factors, including changes in facts or circumstances, changes in tax law, correspondence with tax authorities during the course of audits, and effective settlement of audit issues. 32

The Notes Hedge was entered into with Bank of America, N.A., Jefferies 33 International Limited and Goldman Sachs & Co.

The Notes Hedge was entered into with Bank of America, N.A., Jefferies 29 International Limited and Goldman Sachs & Co.

Other than the lease for our office space in San Diego, California, we do not believe that the leases for our offices are material lease obligations. Other Liquidity Matters On September 30, 2023, we had investments of $76.0 million, designated as available-for-sale debt securities, which consisted of U.S.

Other than the lease for our office space in San Diego, California, we do not believe that the leases for our offices are material lease obligations. Other Liquidity Matters On September 30, 2024, we had investments of $48.3 million, designated as available-for-sale debt securities, which consisted of U.S.

We do not have any other material cash requirements other than those related to leases as described in Note 10. “Commitments and Contingencies” of the notes to the consolidated financial statements included in this Form 10-K.

We do not have any other material cash requirements other than those related to leases as described in Note 12. “Leases” of the notes to the consolidated financial statements included in this Form 10-K.

As of March 19, 2024, the 2026 Notes were not convertible, therefore, we had not purchased any shares under the Notes Hedge and the Warrant Transactions had not been exercised and remain outstanding. See Note 9.

As of December 16, 2024, the 2026 Notes were not convertible, therefore, we had not purchased any shares under the Notes Hedge and the Warrant Transactions had not been exercised and remain outstanding. See Note 10.

In summary, our cash flows from continuing operations were as follows ( dollars in thousands ): Twelve Months Ended September 30, 2023 2022 2021 Cash provided by operating activities $ 31,586 $ 21,119 $ 37,341 Cash (used) provided by investing activities (6,784) 1,700 (170,488) Cash (used) provided by financing activities 1,701 (21,143) 143,680 Cash Flows from Operating Activities Cash flows related to operating activities are dependent on net income, non-cash adjustments to net income and changes in working capital.

In summary, our cash flows from continuing operations were as follows ( dollars in thousands ): Twelve Months Ended September 30, 2024 2023 2022 Cash provided by operating activities $ 31,688 $ 31,586 $ 21,119 Cash (used) provided by investing activities 28,746 (6,784) 1,700 Cash (used) provided by financing activities (25,882) 1,701 (21,143) Cash Flows from Operating Activities Cash flows related to operating activities are dependent on net income, non-cash adjustments to net income and changes in working capital.

General and Administrative Expenses General and administrative expenses include payroll, employee benefits, stock-based compensation, and other headcount-related costs associated with finance, legal, administration and information technology functions, as well as third-party legal, accounting, and other administrative costs. General and administrative expenses increased $16.7 million, or 63%, to $43.3 million in 2023 compared to $26.6 million in 2022.

General and Administrative Expenses General and administrative expenses include payroll, employee benefits, stock-based compensation, and other headcount-related costs associated with finance, legal, administration and information technology functions, as well as third-party legal, accounting, and other administrative costs. General and administrative expenses increased $9.7 million, or 22%, to $53.0 million in 2024 compared to $43.3 million in 2023.

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 of January 13, 2024 ("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, 2023 (“Form 10-K”) with the SEC.

All securities for which maturity or sale is expected within one year are classified as “current” on the consolidated balance sheets. All other securities are classified as “long-term” on the consolidated balance sheets. At September 30, 2023, we had $74.7 million of our available-for-sale securities classified as current and $1.3 million of our available-for-sale securities classified as long-term.

All securities for which maturity or sale is expected within one year are classified as “current” on the consolidated balance sheets. All other securities are classified as “long-term” on the consolidated balance sheets. At September 30, 2024, we had $36.9 million of our available-for-sale securities classified as current and $11.4 million of our available-for-sale securities classified as long-term.

Cash Flows from Financing Activities Net cash provided by financing activities was $1.7 million during fiscal 2023, which primarily consisted of net proceeds from the issuance of Common Stock under the 2020 Plan of $1.7 million.

Net cash provided by financing activities was $1.7 million during fiscal 2023, which primarily consisted of net proceeds from the issuance of Common Stock under the Mitek Systems, Inc. Amended and Restated 2020 Incentive Plan of $1.7 million.

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 2026 Notes will mature on February 1, 2026, unless earlier redeemed, repurchased or converted.

As of September 30, 2024, the Company was in compliance with the covenants in 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 2026 Notes will mature on February 1, 2026, unless earlier redeemed, repurchased or converted.

Cost of Revenue Cost of revenue includes personnel costs related to billable services and software support, direct costs associated with our hardware products, hosting costs, and the costs of royalties for third party products embedded in our products. Cost of revenue increased $2.9 million, or 15%, to $23.0 million in 2023 compared to $20.0 million in 2022.

Cost of Revenue Cost of revenue includes personnel costs related to billable services, professional services, and software support, direct costs associated with our hardware products, hosting costs, and the costs of royalties for third party products embedded in our products. 26 Cost of revenue increased $1.4 million, or 6%, to $24.4 million in 2024 compared to $23.0 million in 2023.

Our current sources of liquidity include available cash balances and proceeds from the issuance of the 2026 Notes. On September 30, 2023, we had $134.9 million in cash and cash equivalents and investments compared to $101.0 million on September 30, 2022, an increase of $33.9 million, or 34%.

Our current sources of liquidity include available cash balances, investments, our revolving credit line, and proceeds from the issuance of the 2026 Notes. On September 30, 2024, we had $141.8 million in cash and cash equivalents and investments compared to $134.9 million on September 30, 2023, an increase of $8.6 million, or 6%.

Net cash provided by operating activities during fiscal 2021 was $37.3 million and resulted primarily from net income of $8.0 million, net non-cash charges of $27.3 million, and favorable changes in operating assets and liabilities of $2.1 million.

Net cash provided by operating activities during fiscal 2024 was $31.7 million and resulted primarily from net income of $3.3 million, net non-cash charges of $27.0 million, and unfavorable changes in operating assets and liabilities of $1.4 million.

In connection with this lease, we received tenant improvement allowances totaling approximately $1.0 million. These lease incentives are being amortized as a reduction of rent expense over the term of the lease. Our other offices are located in Paris, France; Amsterdam, The Netherlands; New York, New York; Barcelona, Spain; and London, United Kingdom.

These lease incentives are being amortized as a reduction of rent expense over the term of the lease. Our other offices are located in Paris, France; Amsterdam, The Netherlands; New York, New York; Barcelona, Spain; Leeds, United Kingdom; and London, United Kingdom.

At September 30, 2022, we had $58.3 million of our available-for-sale securities classified as current and $10.6 million of our available-for-sale securities classified as long-term. We had working capital of $138.5 million at September 30, 2023 compared to $89.4 million at September 30, 2022.

At September 30, 2023, we had $74.7 million of our available-for-sale securities classified as current and $1.3 million of our available-for-sale securities classified as long-term. We had working capital of $142.9 million at September 30, 2024 compared to $138.5 million at September 30, 2023.

These risks could cause our actual results to differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under “Risk Factors.” Overview Mitek Systems, Inc. (“Mitek,” the “Company,” “we,” “us,” and “our” ) is a leading innovator of mobile image capture and digital identity verification solutions.

Research and Development Expenses Research and development expenses include payroll, employee benefits, stock-based compensation, third-party contractor expenses, and other headcount-related costs associated with software engineering and mobile image capture science. Research and development expenses decreased $1.2 million, or less than 1%, to $29.0 million in 2023 compared to $30.2 million in 2022.

Research and Development Expenses Research and development expenses include payroll, employee benefits, stock-based compensation, third-party contractor expenses, and other headcount-related costs associated with software engineering and mobile capture science and product management personnel. Research and development expenses increased $5.6 million, or 20%, to $34.6 million in 2024 compared to $29.0 million in 2023.

Amortization and Acquisition-Related Costs Amortization and acquisition-related costs include amortization of intangible assets, expenses recorded due to changes in the fair value of contingent consideration, and other costs associated with acquisitions. Amortization and acquisition-related costs increased $6.2 million, or 70%, to $15.2 million in 2022 compared to $9.0 million in 2021.

Amortization and Acquisition-Related Costs Amortization and acquisition-related costs include amortization of intangible assets, adjustments recorded due to changes in the fair value of contingent consideration, and other costs associated with acquisitions. Amortization and acquisition-related costs decreased $3.7 million, or 20%, to $15.3 million in 2024 compared to $19.0 million in 2023.

The increase in cash used in financing activities during fiscal 2022 compared to fiscal 2021 was primarily due to the net proceeds from the issuance of the 2026 Notes in fiscal 2021 of $149.7 million and repurchases and retirements of our Common Stock of $15.2 million during fiscal 2022. 0.75% Convertible Senior Notes due 2026 In February 2021, the Company issued $155.3 million aggregate principal amount of the 2026 Notes (including the Additional Notes, as defined below).

The increase in cash provided by financing activities during fiscal 2023 compared to fiscal 2022 was primarily due to the expiration of the share repurchase program in June 2022 of $15.2 million and the payment of acquisition-related consideration of $7.7 million in fiscal 2022. 0.75% Convertible Senior Notes due 2026 In February 2021, the Company issued $155.3 million aggregate principal amount of the 2026 Notes (including the Additional Notes, as defined below).

Interest Expense Interest expense includes the amortization of debt discount and issuance costs and coupon and special interest accrued on our 0.75% convertible senior notes due 2026 (the “2026 Notes”). Interest expense was $9.1 million in 2023 and consisted of $7.6 million of amortization of debt discount and issuance costs and $1.6 million of interest incurred.

Restructuring costs were $2.1 million in 2023 and related to a restructuring plan that was initially implemented in June and November 2022. Interest Expense Interest expense includes the amortization of debt discount and issuance costs and coupon and special interest accrued on our 0.75% convertible senior notes due 2026 (the “2026 Notes”).

The increase in selling and marketing expense is primarily due to higher product promotion and other costs of $1.2 million, higher travel and related expenses of 28 $0.4 million, and higher personnel-related costs of $0.1 million in 2023 compared to 2022.

Selling and marketing expenses increased $0.2 million, or 1%, to $40.8 million in 2024 compared to $40.6 million in 2023. The increase in selling and marketing expense is primarily due to higher personnel-related costs due to increased headcount and higher product promotion costs, partially offset by lower other costs in 2024 compared to 2023.

Interest expense was $5.1 million in 2021 and consisted of $4.4 million of amortization of debt discount and issuance costs and $0.8 million of coupon interest incurred.

Interest expense was $9.3 million in 2024 and consisted of $8.1 million of amortization of debt discount and issuance costs and $1.2 million of interest incurred. Interest expense was $9.1 million in 2023 and consisted of $7.5 million of amortization of debt discount and issuance costs and $1.6 million of interest incurred.

Our SaaS offerings give customers the option to be charged upon their incurred usage in arrears (“Pay as You Go”) or to commit to a minimum spend over their contracted period, with the ability to purchase unlimited additional transactions above the minimum during the contract term.

Our accounting policies regarding the recognition of revenue for these contractual arrangements are fully described in Note 2 of the accompanying notes to our consolidated financial statements included in this Form 10-K. 31 Our SaaS offerings give customers the option to be charged upon their incurred usage in arrears (“Pay as You Go”) or to commit to a minimum spend over their contracted period, with the ability to purchase unlimited additional transactions above the minimum during the contract term.

Fiscal Year 2023 Highlights • Revenues for the twelve months ended September 30, 2023 were $172.6 million, an increase of 19% compared to revenues of $144.8 million for the twelve months ended September 30, 2022. • Net income was $8.0 million, or $0.17 per diluted share, for the twelve months ended September 30, 2023, compared to a net income of $3.7 million, or $0.08 per diluted share, for the twelve months ended September 30, 2022. • Cash provided by operating activities was $31.6 million for the twelve months ended September 30, 2023, compared to $21.1 million for the twelve months ended September 30, 2022. • During fiscal 2023 the total number of financial institutions licensing our technology continued to exceed 7,900. • We added new patents to our portfolio during fiscal year 2023, bringing our total number of issued patents to 100 as of September 30, 2023.

Trusted by banks the world over, fintech platforms and telecommunication providers, Mitek combines proven experience with innovative technology to secure the future of digital transactions, empowering organizations to stay ahead of fraud and cyber threats. 25 Fiscal Year 2024 Highlights • Revenues for the twelve months ended September 30, 2024 were $172.1 million, a decrease of less than 1% compared to revenues of $172.6 million for the twelve months ended September 30, 2023. • Net income was $3.3 million, or $0.07 per diluted share, for the twelve months ended September 30, 2024, compared to net income of $8.0 million, or $0.17 per diluted share, for the twelve months ended September 30, 2023. • Cash provided by operating activities was $31.7 million for the twelve months ended September 30, 2024, compared to $31.6 million for the twelve months ended September 30, 2023. • During fiscal 2024 the total number of financial institutions licensing our technology continued to exceed 7,900. • We added new patents to our portfolio during fiscal year 2024, bringing our total number of issued patents to 107 as of September 30, 2024.

The increase in cash and cash equivalents and investments is primarily due to cash flows from operations of $31.6 million and net proceeds from the issuance of our common stock, par value $0.001 per share (“Common Stock”) under the Mitek Systems, Inc. Amended and Restated 2020 Incentive Plan (the “2020 Plan”) of $1.7 million.

The increase in cash and cash equivalents and investments is primarily due to cash flows from operations of $31.7 million partially offset by repurchases of our common stock, par value $0.001 per share (“Common Stock”) of $24.2 million.

Lease Obligations Our principal executive offices, as well as our research and development facility, are located in approximately 29,000 square feet of office space in San Diego, California and the term of the lease continues through June 30, 2024. The average annual base rent under this lease is approximately $1.2 million per year.

Lease Obligations Our principal executive offices are located in approximately 7,500 square feet of office space in San Diego, California and the term of the lease continues through August 13, 2031. The average annual base rent under this lease is approximately $0.3 million per year. In connection with this lease, we received tenant improvement allowances totaling approximately $0.1 million.

“Convertible Senior Notes” of the notes to the consolidated financial statements included in this Form 10-K for more information relating to the Notes Hedge and Warrant Transactions. 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.

“Convertible Senior Notes” of the notes to the consolidated financial statements included in this Form 10-K for more information relating to the Notes Hedge and Warrant Transactions.

The decrease in cash used in investing activities during fiscal 2022 compared to fiscal 2021 was primarily due to an increase in net sales and maturities of investments of $282.1 million partially offset by an increase in cash paid for acquisitions, net of cash acquired of $110.1 million.

The increase in cash provided by investing activities during fiscal 2024 compared to fiscal 2023 was primarily due to an increase in net sales and maturities of investments.

The decrease in cash used in investing activities during fiscal 2023 compared to fiscal 2022 was primarily due to a decrease in net sales and maturities of investments of $131.0 million partially offset by a decrease in cash paid for acquisitions, net of cash acquired of $122.4 million, related to the HooYu Acquisition. 28 Cash Flows from Financing Activities Net cash used in financing activities was $25.9 million during fiscal 2024, primarily due to repurchases and retirements of Common Stock of $24.2 million, the payment of $4.6 million of acquisition-related contingent consideration, and payment of revolving credit line issuance costs of $0.3 million, partially offset by $1.9 million of net proceeds from the issuance of Common Stock under our equity plans and $1.5 million of net proceeds from other borrowings.

Interest expense was $8.2 million in 2022 and consisted of $7.0 million of amortization of debt discount and issuance costs and $1.2 million of interest incurred. Other Income (Expense), Net Other income (expense), net includes interest income net of amortization and net realized gains or losses on our marketable securities portfolio, and foreign currency transactional gains or losses.

As we amortize the debt discount and issuance costs using the effective interest method, amortization expense increases over the term of the agreement. Other Income (Expense), Net Other income (expense), net includes interest income net of amortization and net realized gains or losses on our marketable securities portfolio, and foreign currency transactional gains or losses.

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 subsequently did not timely file its Form 10-Q for the quarter ended December 31, 2023 (the “Q1 Form 10-Q”) with the SEC. The Company then filed its Form 10-K with the SEC on March 19, 2024 and its Q1 Form 10-Q with the SEC on April 15, 2024.

These increases were partially offset by a decrease in deferred revenue in fiscal 2023. Net cash provided by operating activities during fiscal 2022 was $21.1 million and resulted primarily from net income of $3.7 million, net non-cash charges of $26.7 million, and unfavorable changes in operating assets and liabilities of $9.3 million.

The increase in cash provided by operating activities during fiscal 2024 compared to fiscal 2023 of $0.1 million was primarily due to an increase in cash resulting from a decrease in contract assets and increase in deferred revenue, offset by lower cash provided by net income and net non-cash charges in fiscal 2024.

Net cash provided by investing activities was $1.7 million during fiscal 2022, which consisted primarily of net cash paid in connection with the HooYu Acquisition of $122.7 million and capital expenditures of $1.1 million, offset by net sales and maturities of investments of $125.5 million.

These increases were partially offset by a decrease in deferred revenue in fiscal 2023. Cash Flows from Investing Activities Net cash provided by investing activities was $28.7 million during fiscal 2024, which consisted primarily of capital expenditures of $1.4 million, and net sales and maturities of investments of $30.2 million.

Other income (expense), net increased $4.2 million, to net income of $3.8 million in 2023 compared to net expense of $0.4 million in 2022, primarily due to higher interest income net of amortization of $2.5 million, a favorable outcome in the Instacart Lawsuit (as defined below) of $1.4 million, and higher realized gains on the sale of marketable securities of $0.3 million in 2023 compared to 2022.

Other income (expense), net increased $2.3 million, to net income of $6.1 million in 2024 compared to net income of $3.8 million in 2023 primarily due to higher interest income net of amortization and higher foreign currency exchange transactional gains.

The increase in research and development expenses is primarily due to higher personnel-related costs resulting from our increased headcount of $3.6 million and higher travel and related expenses of $0.2 million, partially offset by lower third-party contractor and other expenses of $1.6 million in 2022 compared to 2021.

The increase in research and development expenses is primarily due to higher personnel-related costs as a result of compensation cost of living adjustments for employees that the Company moved to Spain from its offices in Russia and higher third-party contractor expenses, partially offset by lower other costs in 2024 compared to 2023.

These increases were partially offset by a decrease in the fair value of the contingent consideration liability associated with the ID R&D Acquisition of $2.4 million compared to an increase in 2021, a decrease in amortization expense of intangibles related to previous acquisitions that were fully amortized of $1.0 million, and a decrease in acquisition-related expense from the ID R&D Acquisition of $0.3 million in 2022 compared to 2021.

The decrease in amortization and acquisition-related costs is primarily due to a larger increase in the fair value of acquisition-related contingent consideration associated with the ID R&D acquisition in 2023 which was paid in the first fiscal quarter of 2024 and a decrease in amortization expense of intangible assets from previous acquisitions that had been fully amortized in 2024 compared to 2023.

The increase in sales of our Mobile Deposit® product is primarily the result of an existing customer having entered into a significant multiyear Mobile Deposit® contract and the license revenue associated with the full contract term being recognized in the first quarter of fiscal 2023.

Software and hardware revenue decreased $6.5 million, or 7%, to $81.9 million in 2024 compared to $88.4 million in 2023. This decrease is primarily due to an existing customer having entered into a significant multiyear Mobile Deposit® contract and the license revenue associated with the full contract term was recognized in 2023, which did not recur.

The increase was partially offset by a decrease in revenue from our CheckReader™ and legacy identify verification software and hardware products of $1.8 million . Services and other revenue increased $12.3 million, or 17%, to $84.2 million in 2023 compared to $71.9 million in 2022 .

The increase in cost of revenue is primarily due to a related increase in transactional SaaS revenue, partially offset by a decrease in costs due to a decline in sales of our legacy identify verification software and hardware products in 2024 compared to 2023.

The increase in cash provided by financing activities during fiscal 2023 compared to fiscal 2022 was primarily due to the expiration of the share repurchase program in June 2022 of $15.2 million and the payment of acquisition-related consideration of $7.7 million in fiscal 2022. 32 Net cash used in financing activities was $21.1 million during fiscal 2022, which consisted of $15.2 million in repurchases and retirements of our Common Stock and $7.7 million in payments of acquisition-related contingent consideration, partially offset by net proceeds from the issuance of Common Stock under the 2020 Plan of $1.7 million.

The decrease in cash used in financing activities during fiscal 2024 compared to fiscal 2023 was primarily due to the share repurchase program that was approved in May 2024 and the payment of acquisition-related contingent consideration.

Income Tax Benefit (Provision) The income tax provision for 2023 was $2.3 million which yielded an effective tax rate of 22% compared to an income tax benefit of $0.1 million which yielded an effective tax rate of negative 3% in 2022. The income tax provision for 2023 is primarily due to our positive net income for the year.

The increase was partially offset by a favorable outcome in a lawsuit we filed against Instacart that was settled and collected in 2023. 27 Income Tax Benefit (Provision) The income tax benefit for 2024 was $4.2 million which yielded an effective tax rate of 461% compared to an income tax provision of $2.3 million which yielded an effective tax rate of 22% in 2023.

The decrease in research and development expenses is primarily due to lower personnel-related costs of $2.2 million, partially offset by higher costs associated with third-party contractors of $0.6 million and higher travel and related expenses of $0.4 million in 2023 compared to 2022.

The increase was primarily due to higher audit and tax fees, higher personnel-related costs, higher executive transition costs, and higher legal costs, partially offset by a decrease in third-party and professional fees in 2024 compared to 2023.

The share repurchase program was completed during the second quarter of fiscal 2022 and as such the Company made no purchase during the twelve months ended September 30, 2023. The Company made purchases of $14.8 million, or approximately 886,204 shares, during twelve months ended September 30, 2022 at an average price of $16.73 per share and subsequently retired the shares.

The share repurchase program does not require the Company to repurchase shares of its Common Stock and it may be discontinued, suspended or amended at any time. The Company made purchases of $24.2 million, or approximately 2,247,504 shares, during the twelve months ended September 30, 2024 at an average price of $10.78 per share and subsequently retired the shares.

Restructuring Costs Restructuring costs consist of employee severance obligations and other related costs. In order to streamline the organization and focus resources going forward, we undertook a strategic restructuring in June 2022, which included a reduction in our workforce. Restructuring costs incurred in 2022 were $1.8 million. There were no restructuring costs in 2021.

Restructuring Costs Restructuring costs consist of employee severance obligations and other related costs. Restructuring costs were $1.8 million in 2024 and related to expenses incurred to relocate employees and a restructuring that occurred in the third quarter of fiscal 2024.

These partners integrate our products into their solutions to meet the needs of their customers, typically provisioning Mitek services through their respective platforms.

Our effective tax rate for fiscal year 2022 was lower than the U.S. federal statutory rate of 21% due to excess tax benefits resulting from the exercise of stock options and vesting of restricted stock awards, the impact of foreign and state taxes, the impact of certain permanent items on its tax provision, and the impact of federal and state research and development credits on our tax provision. 31 Liquidity and Capital Resources Cash generated from operations has historically been our primary source of liquidity to fund operations and investments to grow our business.

Our effective tax rate for fiscal year 2024 was higher than the U.S. federal statutory rate of 21% due to the impact of research and development credits and the release of valuation allowances in certain of the foreign jurisdictions.

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We are a software development company with expertise in computer vision, 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.

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(“Mitek,” the “Company,” “we,” “us,” and “our”) is a pioneer in mobile image capture and a global provider of solutions in the fraud prevention, digital identity verification, and cybersecurity markets. Our products address the increasing sophistication of fraud in areas such as new account openings, digital account access, and payments.

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Customers count on Mitek to deliver trusted and convenient online experiences, detect and reduce fraud, and meet 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.

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ID R&D delivers innovative, biometric capabilities that raise the bar on usability and performance.

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In addition, we had 20 patent applications outstanding as of September 30, 2023. Acquisition of HooYu Ltd On March 23, 2022, the Company completed the acquisition of HooYu (the “HooYu Acquisition”) pursuant to the Purchase Agreement (the “Purchase Agreement”) dated March 23, 2022, by and among the Company and certain selling parties identified in the Purchase Agreement.

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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.

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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. 27 Market Opportunities, Challenges, & Risks See Item 1: “Business” for details regarding additional market opportunities, challenges and risks.

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Software and hardware revenue increased $15.4 million, or 21%, to $88.4 million in 2023 compared to $72.9 million in 2022. This increase is primarily due to an increase in sales of our Mobile Deposit® and IDLive® software products of $17.3 million.

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This increase is primarily due to strong growth in SaaS revenue as a result of the HooYu Acquisition, and to a lesser extent an increase in maintenance revenue associated with Mobile Deposit® software sales and transactional revenue in 2023 compared to 2022.

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In addition, we had 20 patent applications outstanding as of September 30, 2024. Market Opportunities, Challenges, & Risks See Item 1: “Business” for details regarding additional market opportunities, challenges and risks.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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2023 filing

2024 filing

Biggest changeTo achieve this objective, we maintain our investment portfolio of cash equivalents and marketable securities in a variety of securities, including corporate debt securities, commercial paper, certificates of deposit, and asset-backed securities. We have not used derivative financial instruments in our investment portfolio, and none of our investments are held for trading or speculative purposes.

Biggest changeTo achieve this objective, we maintain our investment portfolio of cash equivalents and marketable securities in a variety of securities, including government securities, corporate debt securities, and commercial paper. We have not used derivative financial instruments in our investment portfolio, and none of our investments are held for trading or speculative purposes.

Translation adjustments resulting from translating the functional currency financial statements into U.S. dollar equivalents are reported separately in the consolidated statements of operations and other comprehensive income (loss). Inflation We do not believe that inflation had a material effect on our business, financial condition or results of operations in the last three fiscal years.

Translation adjustments resulting from translating the functional currency financial statements into U.S. dollar equivalents are reported separately in the consolidated statements of operations and comprehensive income (loss). Inflation We do not believe that inflation had a material effect on our business, financial condition or results of operations in the last three fiscal years.

Foreign Currency Risk We have operations in the United Kingdom, France, the Netherlands, and Spain that are exposed to fluctuations in the foreign currency exchange rate between the U.S. dollar, the Euro, the Ruble, and the British pound sterling.

As of September 30, 2023, our marketable securities had remaining maturities between approximately one and 13 months and a fair market value of $76.0 million, representing 19% of our total assets.

As of September 30, 2024, our marketable securities had remaining maturities between approximately one and 23 months and a fair market value of $48.3 million, representing 12% of our total assets.

Top changes in MITEK SYSTEMS INC's 2024 10-K

Item 1. Business

Item 1A. Risk Factors

Item 2. Properties

Item 3. Legal Proceedings

Item 5. Market for Registrant's Common Equity

Item 7. Management's Discussion & Analysis

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Other MITK 10-K year-over-year comparisons