Cover page
Cover page - shares | 9 Months Ended | |
Jun. 30, 2020 | Jul. 31, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2020 | |
Document Transition Report | false | |
Entity File Number | 001-35231 | |
Entity Registrant Name | MITEK SYSTEMS, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 87-0418827 | |
Entity Address, Address Line One | 600 B Street, Suite 100 | |
Entity Address, City or Town | San Diego, | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 92101 | |
City Area Code | 619 | |
Local Phone Number | 269-6800 | |
Title of 12(b) Security | Common Stock, par value $0.001 per share | |
Trading Symbol | MITK | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 41,288,229 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 | |
Entity Central Index Key | 0000807863 | |
Current Fiscal Year End Date | --09-30 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2020 | Sep. 30, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 18,938 | $ 16,748 |
Short-term investments | 30,281 | 16,502 |
Accounts receivable, net | 12,943 | 14,938 |
Contract assets | 3,410 | 2,350 |
Prepaid expenses | 2,016 | 1,487 |
Other current assets | 1,454 | 2,105 |
Total current assets | 69,042 | 54,130 |
Long-term investments | 2,942 | 1,552 |
Property and equipment, net | 3,638 | 4,231 |
Right-of-use assets | 5,683 | |
Intangible assets, net | 20,151 | 24,405 |
Goodwill | 34,249 | 32,636 |
Deferred income tax assets, net | 15,875 | 16,596 |
Other non-current assets | 5,647 | 2,347 |
Total assets | 157,227 | 135,897 |
Current liabilities: | ||
Accounts payable | 4,304 | 3,555 |
Accrued payroll and related taxes | 7,375 | 6,410 |
Deferred revenue, current portion | 9,089 | 5,612 |
Lease liabilities, current portion | 1,651 | |
Acquisition-related contingent consideration | 686 | 1,036 |
Restructuring accrual | 220 | 1,526 |
Other current liabilities | 942 | 1,909 |
Total current liabilities | 24,267 | 20,048 |
Deferred revenue, non-current portion | 1,240 | 736 |
Lease liabilities, non-current portion | 5,674 | |
Deferred income tax liabilities | 5,699 | 5,555 |
Other non-current liabilities | 964 | 2,225 |
Total liabilities | 37,844 | 28,564 |
Stockholders’ equity: | ||
Preferred stock, $0.001 par value, 1,000,000 shares authorized, none issued and outstanding | 0 | 0 |
Common stock, $0.001 par value, 60,000,000 shares authorized, 41,282,779 and 40,367,456 issued and outstanding, as of June 30, 2020 and September 30, 2019, respectively | 41 | 40 |
Additional paid-in capital | 140,915 | 132,160 |
Accumulated other comprehensive loss | (2,581) | (4,061) |
Accumulated deficit | (18,992) | (20,806) |
Total stockholders’ equity | 119,383 | 107,333 |
Total liabilities and stockholders’ equity | $ 157,227 | $ 135,897 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Jun. 30, 2020 | Sep. 30, 2019 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 1,000,000 | 1,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 60,000,000 | 60,000,000 |
Common stock, shares issued (in shares) | 41,282,779 | 40,367,456 |
Common stock, shares outstanding (in shares) | 41,282,779 | 40,367,456 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE INCOME (LOSS) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Total revenue | $ 25,413 | $ 21,906 | $ 70,672 | $ 59,572 |
Operating costs and expenses | ||||
Selling and marketing | 7,791 | 6,935 | 22,569 | 20,895 |
Research and development | 5,111 | 4,663 | 14,540 | 14,441 |
General and administrative | 5,884 | 5,074 | 16,382 | 15,743 |
Acquisition-related costs and expenses | 1,697 | 1,761 | 4,884 | 5,361 |
Restructuring costs | 0 | 3,214 | (114) | 3,214 |
Total operating costs and expenses | 23,979 | 24,815 | 67,876 | 68,691 |
Operating income (loss) | 1,434 | (2,909) | 2,796 | (9,119) |
Other income, net | 145 | 98 | 480 | 252 |
Income (loss) before income taxes | 1,579 | (2,811) | 3,276 | (8,867) |
Income tax benefit (provision) | (231) | 2,712 | (460) | 4,861 |
Net income (loss) | $ 1,348 | $ (99) | $ 2,816 | $ (4,006) |
Net income (loss) per share – basic (in dollars per share) | $ 0.03 | $ 0 | $ 0.07 | $ (0.10) |
Net income (loss) per share - diluted (in dollars per share) | $ 0.03 | $ 0 | $ 0.07 | $ (0.10) |
Shares used in calculating net income (loss) per share – basic (in shares) | 41,483 | 39,936 | 41,251 | 39,034 |
Shares used in calculating net income (loss) per share – diluted (in shares) | 42,428 | 39,936 | 42,239 | 39,034 |
Other comprehensive income (loss) | ||||
Net income (loss) | $ 1,348 | $ (99) | $ 2,816 | $ (4,006) |
Foreign currency translation adjustment | 1,135 | 814 | 1,324 | (1,213) |
Unrealized gain on investments | 98 | 7 | 156 | 26 |
Other comprehensive income (loss) | 2,581 | 722 | 4,296 | (5,193) |
Software and hardware | ||||
Total revenue | 13,212 | 11,888 | 36,180 | 32,468 |
Operating costs and expenses | ||||
Cost of revenue | 623 | 838 | 2,258 | 2,590 |
Services and other | ||||
Total revenue | 12,201 | 10,018 | 34,492 | 27,104 |
Operating costs and expenses | ||||
Cost of revenue | $ 2,873 | $ 2,330 | $ 7,357 | $ 6,447 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Cumulative-effect adjustment from the adoption of ASU 2014-09 | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Accumulated DeficitCumulative-effect adjustment from the adoption of ASU 2014-09 | Accumulated Other Comprehensive Income (Loss) |
Accounting Standards Update [Extensible List] | us-gaap:AccountingStandardsUpdate201409Member | ||||||
Beginning Balance (in shares) at Sep. 30, 2018 | 37,961,000 | ||||||
Beginning Balance at Sep. 30, 2018 | $ 95,394 | $ 920 | $ 38 | $ 116,944 | $ (21,002) | $ 920 | $ (586) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Exercise of stock options (in shares) | 1,362,000 | ||||||
Exercise of stock options | 4,421 | $ 1 | 4,420 | ||||
Settlement of restricted stock units (in shares) | 786,000 | ||||||
Settlement of restricted stock units | 0 | $ 1 | (1) | ||||
Issuance of common stock under employee stock purchase plan (in shares) | 68,000 | ||||||
Issuance of common stock under employee purchase plan | 491 | 491 | |||||
Stock-based compensation expense | 7,291 | 7,291 | |||||
Components of other comprehensive loss: | |||||||
Net income (loss) | (4,006) | (4,006) | |||||
Foreign currency translation adjustment | (1,213) | (1,213) | |||||
Unrealized gain on investments | 26 | 26 | |||||
Other comprehensive income (loss) | (5,193) | ||||||
Ending Balance (in shares) at Jun. 30, 2019 | 40,177,000 | ||||||
Ending Balance at Jun. 30, 2019 | 103,324 | $ 40 | 129,145 | (24,088) | (1,773) | ||
Beginning Balance (in shares) at Mar. 31, 2019 | 39,348,000 | ||||||
Beginning Balance at Mar. 31, 2019 | 98,069 | $ 39 | 124,613 | (23,989) | (2,594) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Exercise of stock options (in shares) | 726,000 | ||||||
Exercise of stock options | 2,265 | $ 1 | 2,264 | ||||
Settlement of restricted stock units (in shares) | 103,000 | ||||||
Settlement of restricted stock units | 0 | ||||||
Stock-based compensation expense | 2,268 | 2,268 | |||||
Components of other comprehensive loss: | |||||||
Net income (loss) | (99) | (99) | |||||
Foreign currency translation adjustment | 814 | 814 | |||||
Unrealized gain on investments | 7 | 7 | |||||
Other comprehensive income (loss) | 722 | ||||||
Ending Balance (in shares) at Jun. 30, 2019 | 40,177,000 | ||||||
Ending Balance at Jun. 30, 2019 | $ 103,324 | $ 40 | 129,145 | (24,088) | (1,773) | ||
Beginning Balance (in shares) at Sep. 30, 2019 | 40,367,456 | 40,367,000 | |||||
Beginning Balance at Sep. 30, 2019 | $ 107,333 | $ 40 | 132,160 | (20,806) | (4,061) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Exercise of stock options (in shares) | 301,060 | 301,000 | |||||
Exercise of stock options | $ 1,038 | 1,038 | |||||
Settlement of restricted stock units (in shares) | 677,000 | ||||||
Settlement of restricted stock units | 0 | $ 1 | (1) | ||||
Issuance of common stock under employee stock purchase plan (in shares) | 75,000 | ||||||
Issuance of common stock under employee purchase plan | 606 | 606 | |||||
Stock-based compensation expense | 7,112 | 7,112 | |||||
Repurchases and retirements of common stock (in shares) | (137,000) | ||||||
Repurchases and retirements of common stock | (1,002) | (1,002) | |||||
Components of other comprehensive loss: | |||||||
Net income (loss) | 2,816 | 2,816 | |||||
Foreign currency translation adjustment | 1,324 | 1,324 | |||||
Unrealized gain on investments | 156 | 156 | |||||
Other comprehensive income (loss) | $ 4,296 | ||||||
Ending Balance (in shares) at Jun. 30, 2020 | 41,282,779 | 41,283,000 | |||||
Ending Balance at Jun. 30, 2020 | $ 119,383 | $ 41 | 140,915 | (18,992) | (2,581) | ||
Beginning Balance (in shares) at Mar. 31, 2020 | 41,076,000 | ||||||
Beginning Balance at Mar. 31, 2020 | 113,908 | $ 41 | 138,021 | (20,340) | (3,814) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Exercise of stock options (in shares) | 116,000 | ||||||
Exercise of stock options | 393 | 393 | |||||
Settlement of restricted stock units (in shares) | 91,000 | ||||||
Settlement of restricted stock units | 0 | ||||||
Stock-based compensation expense | 2,501 | 2,501 | |||||
Components of other comprehensive loss: | |||||||
Net income (loss) | 1,348 | 1,348 | |||||
Foreign currency translation adjustment | 1,135 | 1,135 | |||||
Unrealized gain on investments | 98 | 98 | |||||
Other comprehensive income (loss) | $ 2,581 | ||||||
Ending Balance (in shares) at Jun. 30, 2020 | 41,282,779 | 41,283,000 | |||||
Ending Balance at Jun. 30, 2020 | $ 119,383 | $ 41 | $ 140,915 | $ (18,992) | $ (2,581) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Operating activities: | ||
Net income (loss) | $ 2,816 | $ (4,006) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Stock-based compensation expense | 7,112 | 7,291 |
Amortization of intangible assets | 4,786 | 5,298 |
Depreciation and amortization | 1,143 | 1,047 |
Amortization of investment premiums and other | (3) | (73) |
Net change in the estimated fair value of acquisition-related contingent consideration | 98 | 0 |
Deferred taxes | 748 | (5,232) |
Changes in assets and liabilities: | ||
Accounts receivable | 2,109 | 2,168 |
Contract assets | (4,802) | (917) |
Other assets | (175) | 148 |
Accounts payable | 724 | 28 |
Accrued payroll and related taxes | 919 | (1,995) |
Deferred revenue | 3,947 | 1,733 |
Restructuring accrual | (1,324) | 3,082 |
Other liabilities | (723) | (684) |
Net cash provided by operating activities | 17,375 | 7,888 |
Investing activities: | ||
Purchases of investments | (32,282) | (14,175) |
Sales and maturities of investments | 17,272 | 10,830 |
Purchases of property and equipment | (520) | (975) |
Net cash used in investing activities | (15,530) | (4,320) |
Financing activities: | ||
Proceeds from the issuance of equity plan common stock | 1,644 | 4,912 |
Proceeds from the issuance of equity plan common stock | (1,002) | 0 |
Payment of acquisition-related contingent consideration | (478) | (1,030) |
Proceeds from other borrowings | 217 | 0 |
Principal payments on other borrowings | (121) | (250) |
Net cash provided by financing activities | 260 | 3,632 |
Foreign currency effect on cash and cash equivalents | 85 | (136) |
Net increase in cash and cash equivalents | 2,190 | 7,064 |
Cash and cash equivalents at beginning of period | 16,748 | 9,028 |
Cash and cash equivalents at end of period | 18,938 | 16,092 |
Supplemental disclosures of cash flow information: | ||
Cash paid for income taxes | 0 | 310 |
Supplemental disclosures of non-cash investing and financing activities: | ||
Unrealized holding gain on available for sale investments | $ 156 | $ 26 |
Nature of Operations and Summar
Nature of Operations and Summary of Significant Accounting Policies | 9 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 1. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Operations Mitek Systems, Inc. (“Mitek” or the “Company”) is a leading innovator of mobile image capture and digital identity verification solutions. Mitek is a software development company with expertise in computer vision, artificial intelligence, and machine learning. The Company is currently serving more than 7,500 financial services organizations and leading marketplace and financial technology (“fintech”) brands across the globe. The Company’s solutions are embedded in native mobile apps and browsers to facilitate better online user experiences, fraud detection and reduction, and compliant transactions. Mitek’s Mobile Deposit® solution is used today by millions of consumers in the United States (“U.S.”) and Canada for mobile check deposit. Mobile Deposit® enables individuals and businesses to remotely deposit checks using their camera-equipped smartphone or tablet. Mitek’s Mobile Deposit® solution is embedded within the financial institutions’ digital banking apps used by consumers and has now processed over four billion check deposits. Mitek began selling Mobile Deposit® in early 2008 and received its first patent for this product in August 2010. As of June 30, 2020, the Company has been granted 64 patents and it has an additional 19 patent applications pending. Mitek’s Mobile Verify® verifies a user’s identity online enabling organizations to build safer digital communities. Scanning an identity document helps enable an enterprise to verify the identity of the person with whom they are conducting business, to comply with growing governmental Anti-Money Laundering and Know Your Customer regulatory requirements, and to improve the overall customer experience for digital onboarding. To be sure the person submitting the identity document is who they say they are, Mitek’s Mobile Verify Face Comparison provides an additional layer of online verification and compares the face on the submitted identity document with the live selfie photo of the user. The combination of identity document capture and data extraction process enables the organization to prefill the end user’s application, with far fewer key strokes, thus reducing keying errors, and improving both operational efficiency and the customer experience. Today, the financial services verticals (banks, credit unions, lenders, payments processors, card issuers, fintech companies, etc.) represent the greatest percentage of use of our solutions, but there is accelerated adoption by marketplaces, sharing economy, and hospitality sectors. Mitek uses artificial intelligence and machine learning to constantly improve the product performance of Mobile Verify® such as speed and accuracy of approvals of identification documents. The core of Mitek’s user experience is driven by Mitek MiSnap™, the leading image capture technology, which is incorporated across the Company’s product lines. It provides a simple, intuitive, and superior user-experience, making digital transactions faster, more accurate, and easier for the consumer. Mobile Fill® automates application prefill of any form with user data by simply snapping a picture of the driver’s license or other similar user identity document. CheckReader ™ enables financial institutions to automatically extract data from a check image received across any deposit channel—branch, ATM, remote deposit capture, and mobile. Through the automatic recognition of all fields on checks, whether handwritten or machine print, CheckReader ™ speeds the time to deposit for financial institutions and enables them to comply with check clearing regulations. The Company markets and sells its products and services worldwide through internal, direct sales teams located in the U.S., Europe, and Latin America as well as through channel partners. The Company’s partner sales strategy includes channel partners who are financial services technology providers and identity verification providers. These partners integrate the Company’s products into their solutions to meet the needs of their customers. Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited consolidated financial statements of the Company as of June 30, 2020 have been prepared in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X and, accordingly, they do not include all information and footnote disclosures required by accounting principles generally accepted in the U.S. (“GAAP”). The Company believes the footnotes and other disclosures made in the financial statements are adequate for a fair presentation of the results of the interim periods presented. The financial statements include all adjustments (solely of a normal recurring nature) which are, in the opinion of management, necessary to make the information presented not misleading. Certain reclassifications were made to previously reported amounts in the consolidated statements of cash flows to make them consistent with the current period presentation. You should read these financial statements and the accompanying notes in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2019, filed with the U.S. Securities and Exchange Commission on December 6, 2019. Results for the nine months ended June 30, 2020 are not necessarily indicative of results for any other interim period or for a full fiscal year. Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. Foreign Currency The Company has foreign subsidiaries that operate and sell products and services in various countries and jurisdictions around the world. As a result, the Company is exposed to foreign currency exchange risks. For those subsidiaries whose functional currency is not the U.S. dollar, assets and liabilities are translated into U.S. dollars at the exchange rate in effect on the balance sheet date and revenues and expenses are translated into U.S. dollars using the average exchange rate over the period. Resulting currency translation adjustments are recorded in accumulated other comprehensive loss in the consolidated balance sheets. The Company recorded a net gain resulting from foreign exchange translation of $1.1 million for the three months ended June 30, 2020 and a net gain resulting from foreign exchange translation of $0.8 million for the three months ended June 30, 2019. The Company recorded a net gain resulting from foreign exchange translation of $1.3 million for the nine months ended June 30, 2020 and a net loss resulting from foreign exchange translation of $1.2 million for the nine months ended June 30, 2019. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses, deferred taxes, and related disclosure of contingent assets and liabilities. On an ongoing basis, management reviews its estimates based upon currently available information. Actual results could differ materially from those estimates. These estimates include, but are not limited to, assessing the collectability of accounts receivable, estimation of the value of stock-based compensation awards, fair value of assets and liabilities acquired, impairment of goodwill, useful lives of intangible assets, standalone selling price related to revenue recognition, contingent consideration, and income taxes. Revenue Recognition The Company recognizes revenue in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers , and its related amendments (collectively known as “ASC 606”). ASC 606 outlines a single comprehensive model to use in accounting for revenue arising from contracts with customers. The core principle, involving a five-step process, of the revenue model is that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company generates revenue primarily from the delivery of licenses (to both on premise and transactional software as a service (“SaaS”) products) and related services, as well as the delivery of hardware and professional services. Revenue is measured based on consideration specified in a contract with a customer. The Company recognizes revenue when it satisfies a performance obligation by transferring control over a product or service to a customer which may be at a point in time or over time. See Note 2 of the consolidated financial statements for additional details. Contract Assets and Liabilities The Company recognizes revenue when control of the license or transactional SaaS service is transferred to the customer. The Company records a contract asset when the revenue is recognized prior to the date payments become due. Contract assets that are expected to be paid within one year are recorded in current assets on the consolidated balance sheets. All other contract assets are recorded in other non-current assets in the consolidated balance sheet. Contract liabilities consist of deferred revenue. When the performance obligation is expected to be fulfilled within one year, the deferred revenue is recorded in current liabilities in the consolidated balance sheet. When the performance obligation is expected to be fulfilled beyond one year, the deferred revenue is recorded in non-current liabilities in the consolidated balance sheet. The Company reports net contract asset or liability positions on a contract-by-contract basis at the end of each reporting period. Contract Costs The Company incurs incremental costs to obtain a contract, consisting primarily of sales commissions incurred only if a contract is obtained. When the commission rate for a customer renewal is not commensurate with the commission rate for a new contract, the commission is capitalized if expected to be recovered. Such costs are capitalized and amortized using a portfolio approach consistent with the pattern of transfer of the good or service to which the asset relates. Contract costs are recorded in other current and non-current assets in the consolidated balance sheets. Net Income (Loss) Per Share The Company calculates net income (loss) per share in accordance with FASB ASC Topic 260, Earnings per Share . Basic net income (loss) per share is based on the weighted-average number of common shares outstanding during the period. Diluted net income (loss) per share also gives effect to all potentially dilutive securities outstanding during the period, such as restricted stock units (“RSUs”), stock options, and Employee Stock Purchase Plan (“ESPP”) shares, if dilutive. In a period with a net loss position, potentially dilutive securities are not included in the computation of diluted net loss per share because to do so would be antidilutive, and the number of shares used to calculate basic and diluted net loss per share is the same. For the three and nine months ended June 30, 2020 and 2019, the following potentially dilutive common shares were excluded from the calculation of net income (loss) per share, as they would have been antidilutive ( amounts in thousands ): Three Months Ended June 30, Nine Months Ended June 30, 2020 2019 2020 2019 Stock options 207 1,664 270 1,664 RSUs 1,718 2,498 1,577 2,498 ESPP common stock equivalents 73 65 — 65 Performance RSUs 67 — 26 — Total potentially dilutive common shares outstanding 2,065 4,227 1,873 4,227 The calculation of basic and diluted net income (loss) per share is as follows ( amounts in thousands, except per share data) : Three Months Ended June 30, Nine Months Ended June 30, 2020 2019 2020 2019 Net income (loss) $ 1,348 $ (99) $ 2,816 $ (4,006) Weighted-average shares outstanding—basic 41,483 39,936 41,251 39,034 Common stock equivalents 945 — 988 — Weighted-average shares outstanding—diluted 42,428 39,936 42,239 39,034 Net income (loss) per share: Basic $ 0.03 $ 0.00 $ 0.07 $ (0.10) Diluted $ 0.03 $ 0.00 $ 0.07 $ (0.10) Investments Investments consist of corporate notes and bonds, commercial paper, U.S. Treasury securities, and asset-backed securities. The Company classifies investments as available-for-sale at the time of purchase and reevaluates such classification as of each balance sheet date. All investments are recorded at estimated fair value. Unrealized gains and losses for available-for-sale securities are included in accumulated other comprehensive loss, a component of stockholders’ equity. The Company evaluates its investments to assess whether those with unrealized loss positions are other-than-temporarily impaired. Impairments are considered to be other-than-temporary if they are related to deterioration in credit risk or if it is likely that the Company will sell the securities before the recovery of its cost basis. Realized gains and losses and declines in value judged to be other-than-temporary are determined based on the specific identification method and are reported in other income, net in the consolidated statements of operations and other comprehensive income (loss). No other-than-temporary impairment charges were recognized in the three and nine months ended June 30, 2020 and 2019. All investments whose 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. Accounts Receivable and Allowance for Doubtful Accounts Trade accounts receivable are recorded at the net invoice value and are not interest bearing. The Company considers receivables past due based on the contractual payment terms. Allowances for doubtful accounts are established based on various factors, including credit profiles of the Company’s customers, contractual terms and conditions, historical payments, and current economic trends. The Company reviews its allowances by assessing individual accounts receivable over a specific aging and amount. Accounts receivable are written off on a case-by-case basis, net of any amounts that may be collected. The Company had $0.1 million write-offs to the allowance for doubtful accounts in each of the nine months ended June 30, 2020 and 2019. The Company maintained an allowance for doubtful accounts of $0.2 million as of both June 30, 2020 and September 30, 2019. Capitalized Software Development Costs Costs incurred for the development of software that will be sold, leased, or otherwise marketed are capitalized when technological feasibility has been established. Software development costs consist primarily of compensation of development personnel and related overhead incurred to develop new products and upgrade and enhance the Company’s current products, as well as fees paid to outside consultants. Capitalization of software development costs ceases, and amortization of capitalized software development costs commences when the products are available for general release. For the nine months ended June 30, 2020 and 2019, no software development costs were capitalized because the time period and costs incurred between technological feasibility and general release for all software product releases were not material or were not realizable. We had no amortization expense from capitalized software costs during the nine months ended June 30, 2020 and 2019. Costs related to software acquired, developed, or modified solely to meet our internal requirements, with no substantive plans to market such software at the time of development, are capitalized. Costs incurred during the preliminary planning and evaluation stage of the project and during the post-implementation operational stage are expensed as incurred. Costs incurred during the application development stage of the project are capitalized. The Company defines the design, configuration, and coding process as the application development stage. The Company capitalized $0.1 million and $0.2 million of costs related to computer software developed for internal use during the nine months ended June 30, 2020 and 2019, respectively. The Company had $0.3 million in amortization expense from internal use software during each of the nine months ended June 30, 2020 and 2019. Goodwill and Purchased Intangible Assets The Company’s goodwill and intangible assets resulted from prior acquisitions. Goodwill and intangible assets with indefinite useful lives are not amortized, but are tested for impairment at least annually or as circumstances indicate that their value may no longer be recoverable. In accordance with ASC Topic 350, Intangibles—Goodwill and Other (“ASC 350”), the Company reviews its goodwill and indefinite-lived intangible assets for impairment at least annually in its fiscal fourth quarter and more frequently if events or changes in circumstances occur that indicate a potential reduction in the fair value of its reporting unit and/or its indefinite-lived intangible asset below their respective carrying values. Examples of such events or circumstances include: a significant adverse change in legal factors or in the business climate, a significant decline in the Company’s stock price, a significant decline in the Company’s projected revenue or cash flows, an adverse action or assessment by a regulator, unanticipated competition, a loss of key personnel, or the presence of other indicators that would indicate a reduction in the fair value of a reporting unit. No such events or circumstances have occurred since the last impairment assessment was performed. The Company’s goodwill is considered to be impaired if management determines that the carrying value of the reporting unit to which the goodwill has been assigned exceeds management’s estimate of its fair value. Based on the guidance provided by ASC 350 and ASC Topic 280, Segment Reporting , management has determined that the Company operates in one segment and consists of one reporting unit given the similarities in economic characteristics between its operations and the common nature of its products, services and customers. Because the Company has only one reporting unit, and because the Company is publicly traded, the Company determines the fair value of the reporting unit based on its market capitalization as it believes this represents the best evidence of fair value. In the fourth quarter of fiscal 2019, management completed its annual goodwill impairment test and concluded that the Company’s goodwill was not impaired. The Company’s conclusion that goodwill was not impaired was based on a comparison of its net assets to its market capitalization. Because the Company determines the fair value of its reporting unit based on its market capitalization, the Company’s future reviews of goodwill for impairment may be impacted by changes in the price of the Company’s common stock, par value $0.001 per share (“Common Stock”). For example, a significant decline in the price of the Common Stock may cause the fair value of its goodwill to fall below its carrying value. Therefore, the Company cannot assure that when it completes its future reviews of goodwill for impairment a material impairment charge will not be recorded. Intangible assets are amortized over their useful lives. Each period, the Company evaluates the estimated remaining useful life of its intangible assets and whether events or changes in circumstances warrant a revision to the remaining period of amortization. The carrying amounts of these assets are periodically reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of these assets may not be recoverable. Recoverability of these assets is measured by comparing the carrying amount of each asset to the future undiscounted cash flows the asset is expected to generate. The carrying amount of such assets is reduced to fair value if the undiscounted cash flows used in the test for recoverability are less than the carrying amount of such assets. No impairment charge related to the impairment of intangible assets was recorded during the nine months ended June 30, 2020 and 2019. Other Borrowings The Company has certain loan agreements with Spanish government agencies which were assumed when the Company acquired ICAR Vision Systems, S.L. ("ICAR"). These agreements have repayment periods of five current liabilities and other non-current liabilities, respectively, in the consolidated balance sheets. As of September 30, 2019, $0.6 million was outstanding under these agreements and $0.2 million and $0.4 million was recorded in other current liabilities and other non-current liabilities, respectively. Guarantees In the ordinary course of business, the Company is not subject to potential obligations under guarantees that fall within the scope of FASB ASC Topic 460, Guarantees (“ASC 460”), except for standard indemnification and warranty provisions that are contained within many of the Company’s customer license and service agreements and certain supplier agreements, and give rise only to the disclosure requirements prescribed by ASC 460. Indemnification and warranty provisions contained within the Company’s customer license and service agreements and certain supplier agreements are generally consistent with those prevalent in the Company’s industry. The Company has not historically incurred significant obligations under customer indemnification or warranty provisions and does not expect to incur significant obligations in the future. Accordingly, the Company does not maintain accruals for potential customer indemnification or warranty-related obligations. Income Taxes The Company accounts for income taxes in accordance with FASB ASC Topic 740, Income Taxes (“ASC 740”). Deferred tax assets and liabilities arise from temporary differences between the tax bases of assets and liabilities and their reported amounts in the financial statements that will result in taxable or deductible amounts in future years. Management evaluates the available evidence about future taxable income and other possible sources of realization of deferred tax assets. The valuation allowance reduces deferred tax assets to an amount that represents management’s best estimate of the amount of such deferred tax assets that more likely than not will be realized. See Note 7 of the consolidated financial statements for additional details. The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the tax authorities, based on the technical merits of the position. The tax benefit is measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. The Company recognizes interest and penalties related to income tax matters in income tax expense. See Note 7 of the consolidated financial statements for additional details. Stock-Based Compensation The Company issues RSUs, stock options, performance options, and Senior Executive Long-Term Incentive Restricted Stock Units (“Senior Executive Performance RSUs”) as awards to its employees. Additionally, eligible employees may participate in the Company’s ESPP. Employee stock awards are measured at fair value on the date of grant and expense is recognized using the straight-line single-option method in accordance with FASB ASC Topic 718, Compensation—Stock Compensation . Forfeitures are recorded as they occur. The Company assigns fair value to RSUs based on the closing stock price of its Common Stock on the date of grant. The Company estimates the fair value of stock options and ESPP shares using the Black-Scholes option pricing model. The Black-Scholes option pricing model requires subjective assumptions, including future stock price volatility and expected time to exercise, which greatly affect the calculated values. The expected term of options granted is derived from historical data on employee exercises and post-vesting employment termination behavior. The risk-free rate selected to value any particular grant is based on the U.S. Treasury rate that corresponds to the expected life of the grant effective as of the date of the grant. The expected volatility is based on the historical volatility of the Company’s stock price. These factors could change in the future, affecting the determination of stock-based compensation expense in future periods. The Company estimates the fair value of performance options, Senior Executive Performance RSUs, and similar awards using the Monte-Carlo simulation. The Monte-Carlo simulation requires subjective assumptions, including the Company’s valuation date stock price, the annual risk-free interest rate, expected volatility, the probability of reaching the stock performance targets, and a 20-trading-day average stock price. Comprehensive Income (Loss) Comprehensive income (loss) consists of net income (loss), unrealized gains and losses on available-for-sale securities, and foreign currency translation adjustments. Included on the consolidated balance sheets is accumulated other comprehensive loss of $2.6 million and $4.1 million at June 30, 2020 and September 30, 2019, respectively. Recently Adopted Accounting Pronouncements In February 2018, the FASB issued Accounting Standards Update (“ASU”) No. 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Incom e, which allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act of 2017 (the “Jobs Act”). The Company elected not to reclassify the stranded tax effects to retained earnings as they were not material the Company’s consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”). ASU 2016-02 and its related amendments (collectively known as “ASC 842”) which require lessees to record most leases on the balance sheet but recognize expenses in the income statement in a manner similar to previous guidance. The way in which entities classify leases determines how to recognize lease-related revenue and expenses. The Company adopted ASC 842 as of October 1, 2019 using the optional transition method and will not adjust the comparative period financial statements for the effects of the new standard or make the new, expanded required disclosures for periods prior to the adoption date. Accordingly, the results for the nine months ended June 30, 2019 continue to be reported under the accounting guidance, ASC Topic 840, Leases (“ASC 840”), in effect for that period. The Company elected to use the package of practical expedients to not reassess: (i) whether any expired or existing contracts are or contain leases, (ii) lease classification for any expired or existing leases, and (iii) initial direct costs for any existing leases. The Company also elected the practical expedient not to separate the non-lease components of a contract from the lease component to which they relate. In addition, the Company made an accounting policy election that will keep leases with an initial term of twelve months or less off the consolidated balance sheet. The adoption of ASC 842 had a material impact on the consolidated balance sheet as of October 1, 2019, and resulted in the recognition of $8.2 million of lease liabilities and $6.8 million of right-of-use (“ROU”) assets for those leases classified as operating leases. The adoption of ASC 842 did not have a material impact on the Company’s consolidated statements of operations and other comprehensive income (loss) or consolidated statements of cash flows. See Note 8 of the consolidated financial statements for additional details. Change in Significant Accounting Policy Except for the changes below, the Company has consistently applied the accounting policies to all periods presented in its consolidated financial statements. Leases The Company determines if an arrangement is a lease at inception in accordance with ASC 842. The lease term begins on the commencement date, which is the date the Company takes possession of the property, and may include options to extend or terminate the lease when it is reasonably certain that the option will be exercised. The lease term is used to determine lease classification as an operating or finance lease and is used to calculate straight-line expense for operating leases. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make payments arising from the lease. As a practical expedient, lease agreements with lease and non-lease components are accounted for as a single lease component for all asset classes, which are comprised of real estate leases and auto leases. ROU assets and lease liabilities are recognized at commencement date based upon the present value of lease payments over the lease term. ROU assets also include prepaid lease payments and exclude lease incentives received. The Company estimates contingent lease incentives when it is probable that the Company is entitled to the incentive at lease commencement. Since the Company’s leases do not typically provide an implicit rate, the Company uses its incremental borrowing rate based upon the information available at commencement date of each lease. The determination of the incremental borrowing rate requires judgment. The Company determines the incremental borrowing rate using the Company’s current secured borrowing rate. The Company elected the short-term lease recognition exemption for all leases that qualify. Therefore, leases with an initial term of twelve months or less are not recorded on the consolidated balance sheet; instead, lease payments are recognized as lease expenses on a straight-line basis over the lease term. See Note 8 of the consolidated financial statements for additional details. Recently Issued Accounting Pronouncements In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in ASC 740 and also clarifies and amends existing guidance to improve consistent application. ASU 2019-12 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. Early adoption is permitted, including adoption in an interim period. The Company is currently in the process of evaluating the potential impact of adoption of this updated authoritative guidance on the consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (ASC 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (“ASU 2018-15”), which requires hosting arrangements that are service contracts to follow the guidance for internal-use software to determine which implementation costs can be capitalized. ASU 2018-15 is effective either prospectively or retrospectively for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years, with early adoption permitted. The Company does not expect the adoption of ASU 2018-15 to have a material impact on its consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”), to eliminate, add, and modify certain disclosure requirements for fair value measurements. Entities will no longer be required to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, but public companies will be required to disclose the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements. The guidance is effective for annual and interim periods beginning after December 15, 2019, but entities are permitted to early adopt either the entire standard or only the provisions that eliminate or modify the requirements. The Company does not |
Revenue Recognition
Revenue Recognition | 9 Months Ended |
Jun. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE RECOGNITION | 2. REVENUE RECOGNITION Nature of Goods and Services The following is a description of principal activities from which the Company generates its revenue. Contracts with customers are evaluated on a contract-by-contract basis as contracts may include multiple types of goods and services as described below. Software and Hardware Software and hardware revenue is generated from on premise software license sales, as well as sales of hardware scanner boxes and on premise appliance products. For software license agreements that are distinct, the Company recognizes software license revenue upon delivery and after evidence of a contract exists. Hardware revenue is recognized in the period that the hardware is shipped. Services and Other Services and other revenue is generated from the sale of transactional SaaS products and services, maintenance associated with the sale of software and hardware, and consulting and professional services. The Company recognizes services and other revenue over the period in which such services are performed. The Company’s model typically includes an up-front fee and a periodic commitment from the customer that commences upon completion of the implementation through the remainder of the customer life. The up-front fee is the initial setup fee, or the implementation fee. The periodic commitment includes, but is not limited to, a fixed periodic fee and/or a transactional fee based on system usage that exceeds committed minimums. If the up-front fee is not distinct, revenue is deferred until the date the customer commences use of the Company’s services, at which point the up-front fee is recognized ratably over the life of the customer arrangement. The Company does not view the signing of the contract or the provision of initial setup services as discrete earnings events that are distinct. Significant Judgments in Application of the Guidance The Company uses the following methods, inputs, and assumptions in determining amounts of revenue to recognize: Identification of Performance Obligations For contracts that contain multiple performance obligations, which include combinations of software licenses, maintenance, and services, the Company accounts for individual goods or services as a separate performance obligation if they are distinct. The good or service is distinct if the good or service is separately identifiable from other items in the arrangement and if a customer can benefit from it on its own or with other resources that are readily available to the customer. If these criteria are not met, the promised goods or services are accounted for as a combined performance obligation. Determination of Transaction Price The transaction price is determined based on the consideration to which the Company will be entitled in exchange for transferring products or services to the customer. The Company includes any fixed charges within its contracts as part of the total transaction price. To the extent that variable consideration is not constrained, the Company includes an estimate of the variable amount, as appropriate, within the total transaction price and updates its assumptions over the duration of the contract. As a practical expedient, the Company does not adjust the transaction price for the effects of a significant financing component if, at contract inception, the period between customer payment and the transfer of goods or services is expected to be one year or less. Assessment of Estimates of Variable Consideration Many of the Company’s contracts with customers contain some component of variable consideration; however, the constraint will generally not result in a reduction in the estimated transaction price for most forms of variable consideration. The Company may constrain the estimated transaction price in the event of a high degree of uncertainty as to the final consideration amount owed because of an extended length of time over which the fees may be adjusted. Allocation of Transaction Price The transaction price, including any discounts, is allocated between separate goods and services in a contract that contains multiple performance obligations based on their relative standalone selling prices. The standalone selling prices are determined based on the prices at which the Company separately sells each good or service. For items that are not sold separately, the Company estimates the standalone selling prices using available information such as market conditions and internally approved pricing guidelines. In instances where there are observable selling prices for professional services and support and maintenance, the Company may apply the residual approach to estimate the standalone selling price of software licenses. In certain situations, primarily transactional SaaS revenue described above, the Company allocates variable consideration to a series of distinct goods or services within a contract. The Company allocates variable payments to one or more, but not all, of the distinct goods or services or to a series of distinct goods or services in a contract when (i) the variable payment relates specifically to the Company’s efforts to transfer the distinct good or service and (ii) the variable payment is for an amount that depicts the amount of consideration to which the Company expects to be entitled in exchange for transferring the promised goods or services to its customer. Disaggregation of Revenue The following table presents the Company's revenue disaggregated by major product category ( amounts in thousands ): Three Months Ended June 30, Nine Months Ended June 30, 2020 2019 2020 2019 Major product category Deposits software and hardware $ 12,222 $ 10,521 $ 32,822 $ 28,786 Deposits services and other 4,726 4,528 13,399 11,041 Deposits revenue 16,948 15,049 46,221 39,827 Identity verification software and hardware 990 1,367 3,358 3,682 Identity verification services and other 7,475 5,490 21,093 16,063 Identity verification revenue 8,465 6,857 24,451 19,745 Total revenue $ 25,413 $ 21,906 $ 70,672 $ 59,572 Software and hardware revenue is generated from on premise software license sales, as well as sales of hardware scanner boxes and on premise appliance products. Services and other revenue is generated from the sale of transactional SaaS products and services, maintenance associated with the sale of software and hardware, and consulting and professional services. Contract Balances The following table provides information about contract assets and contract liabilities from contracts with customers ( amounts in thousands ): June 30, 2020 September 30, 2019 Contract assets, current $ 3,410 $ 2,350 Contract assets, non-current 4,338 581 Contract liabilities (deferred revenue), current 9,089 5,612 Contract liabilities (deferred revenue), non-current $ 1,240 $ 736 Contract assets, reported within current assets and other long-term assets in the consolidated balance sheets, primarily result from revenue being recognized when a license is delivered and payments are made over time. Contract liabilities primarily relate to advance consideration received from customers, deferred revenue, for which transfer of control occurs, and therefore revenue is recognized, as services are provided. Contract balances are reported in a net contract asset or liability position on a contract-by-contract basis at the end of each reporting period. The Company recognized $5.6 million and $4.2 million of revenue during the nine months ended June 30, 2020 and 2019, respectively, which was included in the contract liability balance at the beginning of each such period. Contract Costs Contract costs included in other current and non-current assets on the consolidated balance sheets totaled $1.5 million as of both June 30, 2020 and September 30, 2019, respectively. Contract costs are amortized based on the transfer of goods or services to which the asset relates. The amortization period also considers expected customer lives and whether the asset relates to goods or services transferred under a specific anticipated contract. These costs are included in selling and marketing expenses in the consolidated statement of operations and other comprehensive income (loss) and totaled $0.6 million and $0.4 million during the nine months ended June 30, 2020 and 2019, respectively. There were no impairment losses recognized during both the nine months ended June 30, 2020 and 2019 related to capitalized contract costs. |
Restructuring
Restructuring | 9 Months Ended |
Jun. 30, 2020 | |
Restructuring and Related Activities [Abstract] | |
RESTRUCTURING | 3. RESTRUCTURING Subsequent to the acquisition of A2iA Group II, S.A.S. (“A2iA”), in May 2018, the Company evaluated A2iA’s operations and determined that the market for certain products was small and lacking growth opportunity and that its products were not core to Mitek’s strategy, nor were they profitable for the Company. In order to streamline the organization and focus resources going forward, the Company undertook a strategic restructuring of A2iA’s Paris operations in June 2019, which included, among other things, ceasing the sale of certain A2iA products and offerings and a reduction in workforce. Restructuring costs consist of employee severance obligations and other related costs. The following table summarizes changes in the restructuring accrual during the nine months ended June 30, 2020 (amounts shown in thousands) : Balance at September 30, 2019 $ 1,526 Accrual reversed (114) Payments (1,165) Foreign currency effect on the restructuring accrual (27) Balance at June 30, 2020 $ 220 |
Investments
Investments | 9 Months Ended |
Jun. 30, 2020 | |
Investments, Debt and Equity Securities [Abstract] | |
INVESTMENTS | 4. INVESTMENTS The following tables summarize investments by type of security as of June 30, 2020 and September 30, 2019, respectively (amounts shown in thousands): June 30, 2020: Cost Gross Unrealized Gains Gross Unrealized Losses Fair Market Value Available-for-sale securities: U.S. Treasury, short-term $ 8,245 $ 62 $ — $ 8,307 Asset-backed securities, short-term 3,769 34 — 3,803 Corporate debt securities, short-term 18,147 24 — 18,171 Asset-backed securities, long-term 964 14 — 978 Corporate debt securities, long-term 1,936 28 — 1,964 Total $ 33,061 $ 162 $ — $ 33,223 September 30, 2019: Cost Gross Unrealized Gains Gross Unrealized Losses Fair Market Value Available-for-sale securities: U.S. Treasury, short-term $ 4,240 $ 2 $ — $ 4,242 Corporate debt securities, short-term 12,258 2 — 12,260 U.S. Treasury, long-term 1,102 — (1) 1,101 Corporate debt securities, long-term 451 — — 451 Total $ 18,051 $ 4 $ (1) $ 18,054 The cost of securities sold is based on the specific identification method. Amortization of premiums, accretion of discounts, interest, dividend income and realized gains and losses are included in other income, net in the consolidated statements of operations and other comprehensive income (loss). The Company determines the appropriate designation of investments at the time of purchase and reevaluates such designation as of each balance sheet date. All of the Company’s investments are designated as available-for-sale debt securities. As of June 30, 2020 and September 30, 2019, the Company’s short-term investments have maturity dates of less than one year from the balance sheet date and the Company’s long-term investments have maturity dates of greater than one year from the balance sheet date. Available-for-sale marketable securities are carried at fair value as determined by quoted market prices for identical or similar assets, with unrealized gains and losses, net of taxes, and reported as a separate component of stockholders’ equity. Management reviews the fair value of the portfolio at least monthly and evaluates individual securities with fair value below amortized cost at the balance sheet date. For debt securities, in order to determine whether impairment is other-than-temporary, management must conclude whether the Company intends to sell the impaired security and whether it is more likely than not that the Company will be required to sell the security before recovering its amortized cost basis. If management intends to sell an impaired debt security or it is more likely than not that the Company will be required to sell the security prior to recovering its amortized cost basis, an other-than-temporary impairment is deemed to have occurred. The amount of an other-than-temporary impairment on debt securities related to a credit loss, or securities that management intends to sell before recovery, is recognized in earnings. The amount of an other-than-temporary impairment on debt securities related to other factors is recorded consistent with changes in the fair value of all other available-for-sale securities as a component of stockholders’ equity in other comprehensive income. No other-than-temporary impairment charges were recognized in the three and nine months ended June 30, 2020 and 2019. There were no realized gains or losses from the sale of available-for-sale securities during the three and nine months ended June 30, 2020 and 2019. Fair Value Measurements and Disclosures FASB ASC Topic 820, Fair Value Measurements (“ASC 820”) defines fair value, establishes a framework for measuring fair value under GAAP and enhances disclosures about fair value measurements. Fair value is defined under ASC 820 as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value under ASC 820 must maximize the use of observable inputs and minimize the use of unobservable inputs. ASC 820 describes a fair value hierarchy based on the following three levels of inputs that may be used to measure fair value, of which the first two are considered observable and the last, unobservable: • Level 1—Quoted prices in active markets for identical assets or liabilities; • Level 2—Inputs other than Level 1 inputs that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and • Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The following tables represent the fair value hierarchy of the Company’s investments and acquisition-related contingent consideration as of June 30, 2020 and September 30, 2019, respectively (amounts shown in thousands) : June 30, 2020: Balance Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Short-term investments: U.S. Treasury $ 8,307 $ 8,307 $ — $ — Asset-backed securities 3,803 — 3,803 — Corporate debt securities Financial 6,385 — 6,385 — Industrial 1,918 — 1,918 — Commercial paper Financial 6,978 — 6,978 — Industrial 2,890 — 2,890 — Total short-term investments at fair value 30,281 8,307 21,974 — Long-term investments: U.S. Treasury — — — — Asset-backed securities 978 — 978 — Corporate debt securities Financial 997 — 997 — Industrial 967 — 967 — Total assets at fair value $ 33,223 $ 8,307 $ 24,916 $ — Liabilities: Acquisition-related contingent consideration 686 — — 686 Total liabilities at fair value $ 686 $ — $ — $ 686 September 30, 2019: Balance Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Short-term investments: U.S. Treasury $ 4,242 $ 4,242 $ — $ — Corporate debt securities Financial 2,503 — 2,503 — Industrial 1,371 — 1,371 — Commercial paper Financial 5,560 — 5,560 — Industrial 2,826 — 2,826 — Total short-term investments at fair value 16,502 4,242 12,260 — Long-term investments: U.S. Treasury 1,101 1,101 — — Corporate debt securities Financial 451 — 451 — Total assets at fair value $ 18,054 $ 5,343 $ 12,711 $ — Liabilities: Acquisition-related contingent consideration 1,601 — — 1,601 Total liabilities at fair value $ 1,601 $ — $ — $ 1,601 As of June 30, 2020, total acquisition-related contingent consideration of $0.7 million is recorded as acquisition-related contingent consideration in the consolidated balance sheets. The following table includes a summary of the contingent consideration measured at fair value using significant unobservable inputs (Level 3) during the nine months ended June 30, 2020 (amounts shown in thousands) : Balance at September 30, 2019 $ 1,601 Expenses recorded due to changes in fair value 98 Payment of contingent consideration (1,049) Foreign currency effect on contingent consideration 36 Balance at June 30, 2020 $ 686 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 9 Months Ended |
Jun. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | 5. GOODWILL AND INTANGIBLE ASSETS Goodwill The Company had a goodwill balance of $34.2 million at June 30, 2020, representing the excess of costs over fair value of assets of businesses acquired. Goodwill acquired in a business combination and determined to have an indefinite useful life is not amortized, but instead is tested for impairment at least annually in accordance with ASC 350. The following table summarizes changes in the balance of goodwill during the nine months ended June 30, 2020 (amounts shown in thousands) : Balance at September 30, 2019 $ 32,636 Other adjustments(1) 806 Foreign currency effect on goodwill and other 807 Balance at June 30, 2020 $ 34,249 (1) During the three months ended December 31, 2019, the Company determined that it had incorrectly classified $0.8 million of contract assets in its fair value estimate associated with the acquisition of A2iA. This asset was incorrectly recorded as other non-current assets with an offset to goodwill on the Company’s consolidated balance sheet during the three months ended June 30, 2018 and subsequent financial statements. The Company has determined that the adjustment was not material to any previously reported financial statements. Therefore, the consolidated balance sheet as of June 30, 2020 has been adjusted. Intangible Assets Intangible assets include the value assigned to purchased completed technology, customer relationships, and trade names. The estimated useful lives for all of these intangible assets range from two (amounts shown in thousands, except for years): June 30, 2020: Weighted Average Amortization Period Cost Accumulated Amortization Net Completed technologies 6.4 years $ 20,341 $ 9,095 $ 11,246 Customer relationships 4.8 years 17,628 8,866 8,762 Trade names 4.5 years 618 475 143 Total intangible assets $ 38,587 $ 18,436 $ 20,151 September 30, 2019: Weighted Average Amortization Period Cost Accumulated Amortization Net Completed technologies 6.4 years $ 20,341 $ 7,104 $ 13,237 Customer relationships 4.8 years 17,628 6,701 10,927 Trade names 4.5 years 618 377 241 Total intangible assets $ 38,587 $ 14,182 $ 24,405 Amortization expense related to acquired intangible assets was $1.6 million and $1.8 million for the three months ended June 30, 2020 and 2019, respectively, and $4.8 million and $5.3 million for the nine months ended June 30, 2020 and 2019, respectively, and is recorded within acquisition-related costs and expenses on the consolidated statements of operations and other comprehensive income (loss). The estimated future amortization expense related to intangible assets for each of the five succeeding fiscal years is expected to be as follows (amounts shown in thousands): Estimated Future Amortization Expense 2020—remaining $ 1,585 2021 6,134 2022 5,738 2023 3,766 2024 1,779 2025 1,149 Total $ 20,151 |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Jun. 30, 2020 | |
Equity [Abstract] | |
STOCKHOLDERS' EQUITY | 6. STOCKHOLDERS’ EQUITY Stock-Based Compensation Expense The following table summarizes stock-based compensation expense related to RSUs, stock options, and ESPP shares, which was allocated as follows (amounts shown in thousands) : Three Months Ended June 30, Nine Months Ended June 30, 2020 2019 2020 2019 Cost of revenue $ 73 $ 55 $ 199 $ 155 Selling and marketing 823 705 2,194 2,242 Research and development 591 437 1,740 1,438 General and administrative 1,014 1,071 2,979 3,456 Stock-based compensation expense included in expenses $ 2,501 $ 2,268 $ 7,112 $ 7,291 The fair value calculations for stock-based compensation awards to employees for the nine months ended June 30, 2020 and 2019 were based on the following assumptions: Nine Months Ended June 30, 2020 Nine Months Ended June 30, 2019 Risk-free interest rate 1.35% 2.88% – 3.08% Expected life (years) 5.78 5.46 Expected volatility 48% 57% Expected dividends None None The expected life of options granted is derived using assumed exercise rates based on historical exercise patterns and vesting terms, and represents the period of time that options granted are expected to be outstanding. Expected stock price volatility is based upon implied volatility and other factors, including historical volatility. After assessing all available information on either historical volatility, or implied volatility, or both, the Company concluded that a combination of both historical and implied volatility provides the best estimate of expected volatility. As of June 30, 2020, the Company had $19.8 million of unrecognized compensation expense related to outstanding stock options and RSUs expected to be recognized over a weighted-average period of approximately 2.5 years. 2020 Incentive Plan In January 2020, the Company’s board of directors (the “Board”) adopted the Mitek Systems, Inc. 2020 Incentive Plan (the “2020 Plan”) upon the recommendation of the compensation committee of the Board. On March 4, 2020, the Company’s stockholders approved the 2020 Plan. The total number of shares of Common Stock reserved for issuance under the 2020 Plan is 4,500,000 shares plus such number of shares, not to exceed 107,903, as remained available for issuance under the 2002 Stock Option Plan, 2006 Stock Option Plan, 2010 Stock Option Plan, and 2012 Incentive Plan (collectively, the “Prior Plans”) as of January 17, 2020, plus any shares underlying awards under the Prior Plans that are terminated, forfeited, cancelled, expire unexercised or are settled in cash after January 17, 2020. As of June 30, 2020, (i) 300,395 RSUs and 353,556 Performance RSUs were outstanding under the 2020 Plan, and 3,820,692 shares of Common Stock were reserved for future grants under the 2020 Plan and (ii) stock options to purchase an aggregate of 1,132,517 shares of Common Stock and 1,989,599 RSUs were outstanding under the Prior Plans. Employee Stock Purchase Plan In January 2018, the Board adopted the ESPP. On March 7, 2018, the Company’s stockholders approved the ESPP. The total number of shares of Common Stock reserved for issuance thereunder is 1,000,000 shares. As of June 30, 2020, (i) 275,593 shares have been issued to participants pursuant to the ESPP and (ii) 724,407 shares of Common Stock were reserved for future purchases under the ESPP. The Company commenced the initial offering period on April 2, 2018. The ESPP enables eligible employees to purchase shares of Common Stock at a discount from the market price through payroll deductions, subject to limitations. Eligible employees may elect to participate in the ESPP only during an open enrollment period. The offering period immediately follows the open enrollment window, at which time ESPP contributions are withheld from the participant's regular paycheck. The ESPP provides for a 15% discount on the market value of the stock at the lower of the grant date price (first day of the offering period) and the purchase date price (last day of the offering period). The Company recognized $0.1 million in stock-based compensation expense related to the ESPP in each of the three months ended June 30, 2020 and 2019. The Company recognized $0.3 million in stock-based compensation expense related to the ESPP in each of the nine months ended June 30, 2020 and 2019. Director Restricted Stock Unit Plan In January 2011, the Board adopted the Mitek Systems, Inc. Director Restricted Stock Unit Plan, as amended and restated (the “Director Plan”). On March 10, 2017, the Company’s stockholders approved an amendment to the Director Plan. The total number of shares of Common Stock reserved for issuance thereunder is 1,500,000 shares. As of June 30, 2020, (i) 428,094 RSUs were outstanding under the Director Plan and (ii) 287,385 shares of Common Stock were reserved for future grants under the Director Plan. Stock Options The following table summarizes stock option activity under the Company’s equity plans during the nine months ended June 30, 2020: Number of Shares Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term (in Years) Aggregate Intrinsic Value ( in thousands ) Outstanding at September 30, 2019 1,686,902 $ 7.00 5.4 $ 4,882 Granted 92,610 $ 9.49 Exercised (301,060) $ 3.46 Canceled (36,146) $ 10.76 Outstanding at June 30, 2020 1,442,306 $ 7.81 5.5 $ 2,978 Vested and Expected to Vest at June 30, 2020 1,442,306 $ 7.81 5.5 $ 2,978 Exercisable at June 30, 2020 1,015,542 $ 7.16 4.2 $ 2,876 The Company recognized $0.2 million in stock-based compensation expense related to outstanding stock options in each of the three months ended June 30, 2020 and 2019. The Company recognized $0.5 million in stock-based compensation expense related to outstanding stock options in each of the nine months ended June 30, 2020 and 2019. As of June 30, 2020, the Company had $1.8 million of unrecognized compensation expense related to outstanding stock options expected to be recognized over a weighted-average period of approximately 2.7 years. Aggregate intrinsic value represents the value of the Company’s closing stock price on the last trading day of the fiscal period in excess of the weighted-average exercise price, multiplied by the number of options outstanding and exercisable. The total intrinsic value of options exercised during the nine months ended June 30, 2020 and 2019 was $1.7 million and $11.0 million, respectively. The per-share weighted-average fair value of options granted during the nine months ended June 30, 2020 and 2019 was $4.32 and $5.08, respectively. Restricted Stock Units The following table summarizes RSU activity under the Company’s equity plans during the nine months ended June 30, 2020: Number of Shares Weighted-Average Fair Market Value Per Share Outstanding at September 30, 2019 2,352,487 $ 8.26 Granted 1,346,405 $ 7.20 Settled (676,473) $ 7.66 Canceled (221,435) $ 8.37 Outstanding at June 30, 2020 2,800,984 $ 7.89 The cost of RSUs is determined using the fair value of Common Stock on the award date, and the compensation expense is recognized ratably over the vesting period. The Company recognized $1.8 million and $1.6 million in stock-based compensation expense related to outstanding RSUs in the three months ended June 30, 2020 and 2019, respectively. The Company recognized $5.2 million and $5.3 million in stock-based compensation expense related to outstanding RSUs in the nine months ended June 30, 2020 and 2019, respectively. As of June 30, 2020, the Company had $15.2 million of unrecognized compensation expense related to outstanding RSUs expected to be recognized over a weighted-average period of approximately 2.6 years. Performance Restricted Stock Units The following table summarizes Performance RSU activity under the Company’s equity plans during the nine months ended June 30, 2020: Number of Shares Weighted-Average Fair Market Value Per Share Outstanding at September 30, 2019 1,722,551 $ 7.76 Granted 353,556 $ 6.06 Settled — $ — Canceled (1,722,551) $ 7.76 Outstanding at June 30, 2020 353,556 $ 6.06 The Company recognized $0.2 million in stock-based compensation expense related to outstanding Performance RSUs in each of the three months ended June 30, 2020 and 2019. The Company recognized $0.5 million and $0.7 million in stock-based compensation expense related to outstanding Performance RSUs in the nine months ended June 30, 2020 and 2019, respectively. As of June 30, 2020, the Company had $1.7 million of unrecognized compensation expense related to outstanding RSUs expected to be recognized over a weighted-average period of approximately 1.8 years. Performance Options On November 6, 2018, as an inducement grant pursuant to Nasdaq Listing Rule 5635(c)(4), the Company’s Chief Executive Officer was granted performance options (the “Performance Options”) to purchase up to 800,000 shares of Common Stock at an exercise price of $9.50 per share, the closing market price for a share of Common Stock on the date of the grant. As long as he remains employed by the Company, such Performance Options shall vest upon the closing market price of Common Stock achieving certain predetermined levels and his serving as the Chief Executive Officer of the Company for at least 3.0 years. In the event of a change of control of the Company, all of the unvested Performance Options will vest if the per share price payable to the stockholders of the Company in connection with the Change of Control is an amount reaching those certain predetermined levels required for the Performance Options to otherwise vest. The Company recognized $0.2 million in stock-based compensation expense related to outstanding Performance Options in each of the three months ended June 30, 2020 and 2019. The Company recognized $0.6 million and $0.5 million in stock-based compensation expense related to outstanding Performance Options in the nine months ended June 30, 2020 and 2019, respectively. As of June 30, 2020, the Company had $1.1 million of unrecognized compensation expense related to outstanding Performance Options expected to be recognized over a weighted-average period of approximately 1.4 years. Share Repurchase Program On December 13, 2019, the Board authorized and approved a share repurchase program for up to $10 million of the currently outstanding shares of the Company’s Common Stock. The share repurchase program will expire December 16, 2020. The purchases under the share repurchase program may be made from time to time in the open market, through block trades, 10b5-1 trading plans, privately negotiated transactions or otherwise, in each case, in accordance with applicable laws, rules, and regulations. The timing and actual number of the shares repurchased will depend on a variety of factors including price, market conditions, and corporate and regulatory requirements. The Company intends to fund the share repurchases from cash on hand. The share repurchase program does not commit the Company to repurchase shares of its Common Stock and it may be amended, suspended, or discontinued at any time. The Company made purchases of $1.0 million, or approximately 137,000 shares, during the nine months ended June 30, 2020 at an average price of $7.33 per share. Total purchases made under the share repurchase program were $1.0 million as of June 30, 2020. Rights Agreement On October 23, 2018, the Company entered into the Section 382 Rights Agreement (the “Rights Agreement”) and issued a dividend of one preferred share purchase right (a “Right”) for each share of Common Stock payable on November 2, 2018 to the stockholders of record of such shares on that date. Each Right entitles the registered holder, under certain circumstances, to purchase from the Company one one-thousandth of a share of Series B Junior Preferred Stock, par value $0.001 per share (the “Preferred Shares”), of the Company, at a price of $35.00 per one one-thousandth of a Preferred Share represented by a Right, subject to adjustment. The description and terms of the Rights are set forth in the Rights Agreement. The Rights are not exercisable until the Distribution Date (as defined in the Rights Agreement). Until a Right is exercised, the holder thereof, as such, will have no rights as a stockholder of the Company, including, without limitation, the right to vote or to receive dividends. At any time prior to the time any person becomes an Acquiring Person (as defined in the Rights Agreement), the Board may redeem the Rights in whole, but not in part, at a price of $0.0001 per Right (the “Redemption Price”). The redemption of the Rights may be made effective at such time, on such basis and with such conditions as the Board in its sole discretion may establish. Immediately upon any redemption of the Rights, the right to exercise the Rights will terminate and the only right of the holders of Rights will be to receive the Redemption Price. The Rights will expire on the earlier of (i) the close of business on October 22, 2021, (ii) the time at which the Rights are redeemed, and (iii) the time at which the Rights are exchanged. On February 28, 2019, the Company entered into an Amendment No. 1 to the Rights Agreement for the purpose of (i) modifying the definitions of “Beneficial Owner,” “Beneficially Own,” and “Beneficial Ownership” under the Rights Agreement to more closely align such definitions to the actual and constructive ownership rules under Section 382 of the Internal Revenue Code of 1986, as amended (“Section 382”) or such similar provisions of the Tax Cuts and Jobs Act of 2017 and the rules and regulations promulgated thereunder, and (ii) adding an exemption request process for persons to seek an exemption from becoming an “Acquiring Person” under the Rights Agreement in the event such person wishes to acquire 4.9% or more of the Common Stock then outstanding. |
Income Taxes
Income Taxes | 9 Months Ended |
Jun. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | 7. INCOME TAXES The Company’s tax provision for interim periods is determined using an estimate of the annual effective tax rate, adjusted for discrete items arising in that quarter. In each quarter, management updates the estimate of the annual effective tax rate, and any changes in the annual effective tax rate are recorded in a cumulative adjustment in that quarter. The quarterly tax provision and quarterly estimate of the annual effective tax rate are subject to significant volatility due to several factors, including management’s ability to accurately predict the portion of income (loss) before income taxes in multiple jurisdictions, the tax effects of our stock-based compensation awards, and the effects of acquisitions and the integration of those acquisitions. The annual effective tax rate differs from the U.S. statutory rate primarily due to foreign and state taxes. For the nine months ended June 30, 2020, the Company recorded an income tax provision of $0.5 million, which yielded an effective tax rate of 14%. For the nine months ended June 30, 2019, the Company recorded an income tax benefit of $4.9 million, which yielded an effective tax rate of 55%. The difference between the U.S. federal statutory tax rate and the Company’s effective tax rate for the nine months ended June 30, 2020 is primarily due to excess tax benefits resulting from the exercise of stock options and vesting of RSUs, the impact of foreign and state taxes, and the impact of federal and state research and development credits on its tax provision. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Jun. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 8. COMMITMENTS AND CONTINGENCIES Leases The Company’s principal executive offices, as well as its research and development facility, are located in approximately 29,000 square feet of office space in San Diego, California and the term of the lease continues through June 30, 2024. The Company’s other offices are located in Paris, France; Amsterdam, The Netherlands; New York, New York; Barcelona, Spain; and London, United Kingdom. Other than the lease for office space in San Diego, California, the Company does not believe that the leases for the offices are material to the Company. The Company believes its existing properties are in good condition and are sufficient and suitable for the conduct of its business. The Company’s leases have remaining terms of two Lease liabilities expected to be paid within one year are recorded in current liabilities in the consolidated balance sheets. All other lease liabilities are recorded in non-current liabilities in the consolidated balance sheets. As of June 30, 2020, the Company had operating ROU assets of $5.7 million. Total operating lease liabilities of $7.3 million were comprised of current lease liabilities of $1.7 million and non-current lease liabilities of $5.7 million. The Company recognized $0.6 million of operating lease costs in the nine months ended June 30, 2020. Operating lease costs are included within cost of revenue, selling and marketing, research and development, and general and administrative expenses, dependent upon the nature and use of the ROU asset, in the Company’s consolidated statement of operations and other comprehensive income (loss). The Company paid $1.3 million in operating cash flows for operating leases in the nine months ended June 30, 2020. Maturities of our operating lease liabilities as of June 30, 2020 were as follows (amounts shown in thousands) : Operating leases 2020—remaining $ 355 2021 2,068 2022 1,707 2023 1,709 2024 1,378 2025 290 Thereafter 644 Total lease payments 8,151 Less: amount representing interest (826) Present value of future lease payments 7,325 As determined under ASC 840, the future minimum lease payments related to lease agreements with a remaining noncancelable term in excess of one year, as of September 30, 2019 were as follows: Operating leases 2020 $ 1,641 2021 2,157 2022 1,777 2023 1,550 2024 1,151 2025 36 Thereafter — Total minimum lease payments $ 8,312 Legal Proceedings Claim Against ICAR On June 11, 2018, a claim was filed before the Juzgado de Primera Instancia number 5 of Barcelona, Spain, the first instance court in the Spanish civil procedure system, against ICAR. The claim, also directed to Mr. Xavier Codó Grasa, former controlling shareholder of ICAR and its current General Manager, was brought by the Spanish company Global Equity & Corporate Consulting, S.L. for the alleged breach by ICAR of a services agreement entered into in the context of the sale of the shares in ICAR to Mitek Holding B.V. ICAR responded to the claim on September 7, 2018 and the court process is ongoing. The amount claimed is €0.8 million (or $0.9 million), plus the interest accrued during the court proceedings. Pursuant and subject to the terms of the sale and purchase agreement concerning the acquisition of the shares in ICAR, Mitek Holding B.V. is to be indemnified in respect of any damages suffered by ICAR and/or Mitek Holding B.V. in respect of this claim. Accordingly, no estimate of future liability has been accrued for such contingencies. Third Party Claims Against Our Customers The Company is subject to indemnification demands related to various offers to license patents and allegations of patent infringement against several end-customers. Some of the offers and allegations have resulted in ongoing litigation. The Company is not a party to any such litigation. License offers to and infringement allegations against the Company’s end-customers were made by Lighthouse Consulting Group, LLC; Lupercal, LLC; Pebble Tide, LLC; Dominion Harbor Group, LLC; and IP Edge, LLC, which appear to be non-practicing entities (“NPEs”)—often called “patent trolls”—and not the Company’s competitors. These NPEs may seek to extract settlements from our end-customers, resulting in new or renewed indemnification demands to the Company. At this time, the Company does not believe it is obligated to indemnify any customers or end-customers resulting from license offers or patent infringement allegations by the companies listed above. However, the Company could incur substantial costs if it is determined that it is required to indemnify any customers or end-customers in connection with these offers or allegations. Given the potential for impact to other customers and the industry, the Company is actively monitoring the offers, allegations and any resulting litigation. On July 7, 2018, United Services Automobile Association (“USAA”) filed a lawsuit against Wells Fargo Bank, N.A. (“Wells Fargo”) in the Eastern District of Texas alleging that Wells Fargo’s remote deposit capture systems (which in part utilize technology provided by the Company to Wells Fargo through a partner), infringe four USAA owned patents related to mobile deposits (the “First Wells Lawsuit”). On August 17, 2018, USAA filed a second lawsuit (the “Second Wells Lawsuit” and together with the First Wells Lawsuit, the “Wells Lawsuits”) against Wells Fargo in the Eastern District of Texas asserting that an additional five patents owned by USAA were infringed by Wells Fargo’s remote deposit capture system. Subsequently, on November 6, 2019, a jury in the First Wells Lawsuit found that Wells Fargo willfully infringed at least one of the Subject Patents (as defined below) and awarded USAA $200 million in damages. In the Second Wells Lawsuit, USAA dropped two of the patents from the litigation, and the judge in the case found that one of the remaining three patents was invalid. On January 10, 2020, a jury in the Second Wells Lawsuit found that Wells Fargo willfully infringed at least one of the patents at issue in that case and awarded USAA $102 million in damages. No Mitek product was accused of infringing either of the two patents in question in the Second Wells Lawsuit as the litigation involved broad banking processes and not Mitek’s specific mobile deposit features. The jury verdicts are subject to post-trial motions and appeal by Wells Fargo. The Wells Lawsuits are ongoing and no final judgments or awards have been made to date. Given the potential impact such litigations could have on the use of Mitek’s products by Wells Fargo, our other customers, as well as the industry as a whole, the Company is closely monitoring the Wells Lawsuits. While the Wells Lawsuits do not name Mitek as a defendant, given (among other factors) the Company’s prior history of litigation with USAA and the continued use of Mitek’s products by its customers, on November 1, 2019, the Company filed a Complaint in the U.S. District Court for the Northern District of California seeking declaratory judgment that its products do not infringe USAA’s U.S. Patent Nos. 8,699,779; 9,336,517; 9,818,090; and 8,977,571 (collectively, the “Subject Patents”). On January 15, 2020, USAA filed motions requesting the dismissal of the declaratory judgement of the Subject Patents and transfer of the case to the Eastern District of Texas, both of which the Company opposed. On April 21, 2020, the court in the Northern District of California transferred Mitek’s declaratory judgement action to the Eastern District of Texas and did not rule on USAA’s motion to dismiss. The U.S. District Court for the Eastern District of Texas had a hearing on USAA’s motion to dismiss on July 15, 2020 and has not yet issued its ruling. On April 30, May 22, and June 12, 2020, Mitek filed four petitions with the United States Patent & Trademark Office (“USPTO”) requesting institution of inter partes review (IPR) of each of the Subject Patents. Decisions from the USPTO whether to institute those IPR petitions are expected later this year. 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. Given the procedural posture and the nature of these cases, including that the proceedings are in the early stages and that there are significant factual and legal issues to be resolved, we are unable to make a reasonable estimate of the potential loss or range of losses, if any, that might arise from these matters. Accordingly, no estimate of future liability has been accrued for such contingencies. The Company incurred legal fees of $2.0 million in the nine months ended June 30, 2020 related to third party claims against our customers. Such fees are included in general and administrative expenses in the consolidated statement of operations and other comprehensive income (loss). Claim Against UrbanFT, Inc. On July 31, 2019, the Company filed a lawsuit against one of its customers, UrbanFT, Inc. (“UrbanFT”) in the United States District Court for the Southern District of California (case No. 19-CV-1432-CAB-DEB). UrbanFT is delinquent in payment and attempted to justify its non-payment by asserting that the Company is or may be infringing on UrbanFT patents. The Company filed such lawsuit to collect the delinquent payments and to obtain a declaratory judgment of non-infringement of five UrbanFT patents. UrbanFT filed an answer to the complaint but did not file any cross-claims for infringement. UrbanFT later amended its answer to assert infringement of two of the five patents-at-issue in the Company’s lawsuit against UrbanFT. The Company thereafter filed counterclaims seeking a declaration that the two patents now asserted by UrbanFT are invalid in addition to being not infringed. Pleadings were closed on April 28, 2020. The case is now in the discovery stage. The final pretrial conference is scheduled for December 10, 2021. The Company intends to vigorously pursue its claims and defend against any claims of infringement. Given the procedural posture and the nature of these cases, including that the proceedings are in the early stages and that there are significant factual and legal issues to be resolved, we are unable to make a reasonable estimate of the potential loss or range of losses, if any, that might arise from these matters. Accordingly, no estimate of future liability has been accrued for such contingencies. Other Legal Matters In addition to the foregoing, the Company is subject to various claims and legal proceedings arising in the ordinary course of its business. The Company accrues for such liabilities when it is both (i) probable that a loss has occurred and (ii) the amount of the loss can be reasonably estimated in accordance with ASC 450, Contingencies . While any legal proceeding has an element of uncertainty, the Company believes that the disposition of such matters, in the aggregate, will not have a material effect on the Company’s financial condition or results of operations. Revolving Credit Facility |
Revenue Concentration
Revenue Concentration | 9 Months Ended |
Jun. 30, 2020 | |
Risks and Uncertainties [Abstract] | |
REVENUE CONCENTRATION | 9. REVENUE CONCENTRATION For the three months ended June 30, 2020, the Company derived revenue of $6.4 million from two customers, with such customers accounting for 15% and 11% of the Company’s total revenue, respectively. For the three months ended June 30, 2019, the Company derived revenue of $6.1 million from two customers, with such customers accounting for 16% and 11% of the Company’s total revenue, respectively. For the nine months ended June 30, 2020, the Company derived revenue of $10.8 million from one customer, with such customer accounting for 15% of the Company’s total revenue. For the nine months ended June 30, 2019, the Company derived revenue of $10.5 million from one customer, with such customer accounting for 18% of the Company’s total revenue. The corresponding accounts receivable balances of customers from which revenues were in excess of 10% of total revenue were $4.2 million and $5.5 million at June 30, 2020 and 2019, respectively. The Company’s revenue is derived primarily from sales by the Company to channel partners, including systems integrators and resellers, and end-users of licenses to sell products covered by the Company’s patented technologies. These contractual arrangements do not obligate the Company’s channel partners to order, purchase or distribute any fixed or minimum quantities of the Company’s products. In most cases, the channel partners purchase the license from the Company after they receive an order from an end-user. The channel partners receive orders from various individual end-users; therefore, the sale of a license to a channel partner may represent sales to multiple end-users. End-users can purchase the Company’s products through more than one channel partner. Revenues can fluctuate based on the timing of license renewals by channel partners. When a channel partner purchases or renews a license, the Company receives a license fee in consideration for the grant of a license to sell the Company’s products and there are no future payment obligations related to such agreement; therefore, the license fee the Company receives with respect to a particular license renewal in one period does not have a correlation with revenue in future periods. During the last several quarters, sales of licenses to one or more channel partners have comprised a significant part of the Company’s revenue. This is attributable to the timing of renewals or purchases of licenses and does not represent a dependence on any single channel partner. The Company believes that it is not dependent upon any single channel partner, even those from which revenues were in excess of 10% of the Company’s total revenue in a specific reporting period, and that the loss or termination of the Company’s relationship with any such channel partner would not have a material adverse effect on the Company’s future operations because either the Company or another channel partner could sell the Company’s products to the end-user that had purchased from the channel partner the Company lost. International sales accounted for approximately 25% and 28% of the Company’s total revenue for the three months ended June 30, 2020 and 2019, respectively. International sales accounted for approximately 25% and 33% of the Company’s total revenue for the nine months ended June 30, 2020 and 2019, respectively. From a geographic perspective, approximately 63% and 68% of the Company’s total long-term assets as of June 30, 2020 and September 30, 2019, respectively, are associated with the Company’s international subsidiaries. From a geographic perspective, approximately 14% and 12% of the Company’s total long-term assets excluding goodwill and other intangible assets as of June 30, 2020 and September 30, 2019, respectively, are associated with the Company’s international subsidiaries. |
Nature of Operations and Summ_2
Nature of Operations and Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Nature of Operations | Nature of Operations Mitek Systems, Inc. (“Mitek” or the “Company”) is a leading innovator of mobile image capture and digital identity verification solutions. Mitek is a software development company with expertise in computer vision, artificial intelligence, and machine learning. The Company is currently serving more than 7,500 financial services organizations and leading marketplace and financial technology (“fintech”) brands across the globe. The Company’s solutions are embedded in native mobile apps and browsers to facilitate better online user experiences, fraud detection and reduction, and compliant transactions. Mitek’s Mobile Deposit® solution is used today by millions of consumers in the United States (“U.S.”) and Canada for mobile check deposit. Mobile Deposit® enables individuals and businesses to remotely deposit checks using their camera-equipped smartphone or tablet. Mitek’s Mobile Deposit® solution is embedded within the financial institutions’ digital banking apps used by consumers and has now processed over four billion check deposits. Mitek began selling Mobile Deposit® in early 2008 and received its first patent for this product in August 2010. As of June 30, 2020, the Company has been granted 64 patents and it has an additional 19 patent applications pending. Mitek’s Mobile Verify® verifies a user’s identity online enabling organizations to build safer digital communities. Scanning an identity document helps enable an enterprise to verify the identity of the person with whom they are conducting business, to comply with growing governmental Anti-Money Laundering and Know Your Customer regulatory requirements, and to improve the overall customer experience for digital onboarding. To be sure the person submitting the identity document is who they say they are, Mitek’s Mobile Verify Face Comparison provides an additional layer of online verification and compares the face on the submitted identity document with the live selfie photo of the user. The combination of identity document capture and data extraction process enables the organization to prefill the end user’s application, with far fewer key strokes, thus reducing keying errors, and improving both operational efficiency and the customer experience. Today, the financial services verticals (banks, credit unions, lenders, payments processors, card issuers, fintech companies, etc.) represent the greatest percentage of use of our solutions, but there is accelerated adoption by marketplaces, sharing economy, and hospitality sectors. Mitek uses artificial intelligence and machine learning to constantly improve the product performance of Mobile Verify® such as speed and accuracy of approvals of identification documents. The core of Mitek’s user experience is driven by Mitek MiSnap™, the leading image capture technology, which is incorporated across the Company’s product lines. It provides a simple, intuitive, and superior user-experience, making digital transactions faster, more accurate, and easier for the consumer. Mobile Fill® automates application prefill of any form with user data by simply snapping a picture of the driver’s license or other similar user identity document. CheckReader ™ enables financial institutions to automatically extract data from a check image received across any deposit channel—branch, ATM, remote deposit capture, and mobile. Through the automatic recognition of all fields on checks, whether handwritten or machine print, CheckReader ™ speeds the time to deposit for financial institutions and enables them to comply with check clearing regulations. The Company markets and sells its products and services worldwide through internal, direct sales teams located in the U.S., Europe, and Latin America as well as through channel partners. The Company’s partner sales strategy includes channel partners who are financial services technology providers and identity verification providers. These partners integrate the Company’s products into their solutions to meet the needs of their customers. |
Basis of Presentation | Basis of Presentation The accompanying unaudited consolidated financial statements of the Company as of June 30, 2020 have been prepared in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X and, accordingly, they do not include all information and footnote disclosures required by accounting principles generally accepted in the U.S. (“GAAP”). The Company believes the footnotes and other disclosures made in the financial statements are adequate for a fair presentation of the results of the interim periods presented. The financial statements include all adjustments (solely of a normal recurring nature) which are, in the opinion of management, necessary to make the information presented not misleading. Certain reclassifications were made to previously reported amounts in the consolidated statements of cash flows to make them consistent with the current period presentation. You should read these financial statements and the accompanying notes in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2019, filed with the U.S. Securities and Exchange Commission on December 6, 2019. |
Principles of Consolidation | Principles of ConsolidationThe consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. |
Foreign Currency | Foreign CurrencyThe Company has foreign subsidiaries that operate and sell products and services in various countries and jurisdictions around the world. As a result, the Company is exposed to foreign currency exchange risks. For those subsidiaries whose functional currency is not the U.S. dollar, assets and liabilities are translated into U.S. dollars at the exchange rate in effect on the balance sheet date and revenues and expenses are translated into U.S. dollars using the average exchange rate over the period. Resulting currency translation adjustments are recorded in accumulated other comprehensive loss in the consolidated balance sheets. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses, deferred taxes, and related disclosure of contingent assets and liabilities. On an ongoing basis, management reviews its estimates based upon currently available information. Actual results could differ materially from those estimates. These estimates include, but are not limited to, assessing the collectability of accounts receivable, estimation of the value of stock-based compensation awards, fair value of assets and liabilities acquired, impairment of goodwill, useful lives of intangible assets, standalone selling price related to revenue recognition, contingent consideration, and income taxes. |
Revenue Recognition, Contract Assets and Liabilities and Contract Costs | Revenue Recognition The Company recognizes revenue in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers , and its related amendments (collectively known as “ASC 606”). ASC 606 outlines a single comprehensive model to use in accounting for revenue arising from contracts with customers. The core principle, involving a five-step process, of the revenue model is that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company generates revenue primarily from the delivery of licenses (to both on premise and transactional software as a service (“SaaS”) products) and related services, as well as the delivery of hardware and professional services. Revenue is measured based on consideration specified in a contract with a customer. The Company recognizes revenue when it satisfies a performance obligation by transferring control over a product or service to a customer which may be at a point in time or over time. See Note 2 of the consolidated financial statements for additional details. Contract Assets and Liabilities The Company recognizes revenue when control of the license or transactional SaaS service is transferred to the customer. The Company records a contract asset when the revenue is recognized prior to the date payments become due. Contract assets that are expected to be paid within one year are recorded in current assets on the consolidated balance sheets. All other contract assets are recorded in other non-current assets in the consolidated balance sheet. Contract liabilities consist of deferred revenue. When the performance obligation is expected to be fulfilled within one year, the deferred revenue is recorded in current liabilities in the consolidated balance sheet. When the performance obligation is expected to be fulfilled beyond one year, the deferred revenue is recorded in non-current liabilities in the consolidated balance sheet. The Company reports net contract asset or liability positions on a contract-by-contract basis at the end of each reporting period. Contract Costs The Company incurs incremental costs to obtain a contract, consisting primarily of sales commissions incurred only if a contract is obtained. When the commission rate for a customer renewal is not commensurate with the commission rate for a new contract, the commission is capitalized if expected to be recovered. Such costs are capitalized and amortized using a portfolio approach consistent with the pattern of transfer of the good or service to which the asset relates. Contract costs are recorded in other current and non-current assets in the consolidated balance sheets. |
Net Income (Loss) Per Share | Net Income (Loss) Per Share The Company calculates net income (loss) per share in accordance with FASB ASC Topic 260, Earnings per Share . Basic net income (loss) per share is based on the weighted-average number of common shares outstanding during the period. Diluted net income (loss) per share also gives effect to all potentially dilutive securities outstanding during the period, such as restricted stock units (“RSUs”), stock options, and Employee Stock Purchase Plan (“ESPP”) shares, if dilutive. In a period with a net loss position, potentially dilutive securities are not included in the computation of diluted net loss per share because to do so would be antidilutive, and the number of shares used to calculate basic and diluted net loss per share is the same. |
Investments | Investments Investments consist of corporate notes and bonds, commercial paper, U.S. Treasury securities, and asset-backed securities. The Company classifies investments as available-for-sale at the time of purchase and reevaluates such classification as of each balance sheet date. All investments are recorded at estimated fair value. Unrealized gains and losses for available-for-sale securities are included in accumulated other comprehensive loss, a component of stockholders’ equity. The Company evaluates its investments to assess whether those with unrealized loss positions are other-than-temporarily impaired. Impairments are considered to be other-than-temporary if they are related to deterioration in credit risk or if it is likely that the Company will sell the securities before the recovery of its cost basis. Realized gains and losses and declines in value judged to be other-than-temporary are determined based on the specific identification method and are reported in other income, net in the consolidated statements of operations and other comprehensive income (loss). No other-than-temporary impairment charges were recognized in the three and nine months ended June 30, 2020 and 2019. All investments whose 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. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful AccountsTrade accounts receivable are recorded at the net invoice value and are not interest bearing. The Company considers receivables past due based on the contractual payment terms. Allowances for doubtful accounts are established based on various factors, including credit profiles of the Company’s customers, contractual terms and conditions, historical payments, and current economic trends. The Company reviews its allowances by assessing individual accounts receivable over a specific aging and amount. Accounts receivable are written off on a case-by-case basis, net of any amounts that may be collected. |
Capitalized Software Development Costs | Capitalized Software Development Costs Costs incurred for the development of software that will be sold, leased, or otherwise marketed are capitalized when technological feasibility has been established. Software development costs consist primarily of compensation of development personnel and related overhead incurred to develop new products and upgrade and enhance the Company’s current products, as well as fees paid to outside consultants. Capitalization of software development costs ceases, and amortization of capitalized software development costs commences when the products are available for general release. For the nine months ended June 30, 2020 and 2019, no software development costs were capitalized because the time period and costs incurred between technological feasibility and general release for all software product releases were not material or were not realizable. We had no amortization expense from capitalized software costs during the nine months ended June 30, 2020 and 2019. |
Goodwill and Purchased Intangible Assets | Goodwill and Purchased Intangible Assets The Company’s goodwill and intangible assets resulted from prior acquisitions. Goodwill and intangible assets with indefinite useful lives are not amortized, but are tested for impairment at least annually or as circumstances indicate that their value may no longer be recoverable. In accordance with ASC Topic 350, Intangibles—Goodwill and Other (“ASC 350”), the Company reviews its goodwill and indefinite-lived intangible assets for impairment at least annually in its fiscal fourth quarter and more frequently if events or changes in circumstances occur that indicate a potential reduction in the fair value of its reporting unit and/or its indefinite-lived intangible asset below their respective carrying values. Examples of such events or circumstances include: a significant adverse change in legal factors or in the business climate, a significant decline in the Company’s stock price, a significant decline in the Company’s projected revenue or cash flows, an adverse action or assessment by a regulator, unanticipated competition, a loss of key personnel, or the presence of other indicators that would indicate a reduction in the fair value of a reporting unit. No such events or circumstances have occurred since the last impairment assessment was performed. The Company’s goodwill is considered to be impaired if management determines that the carrying value of the reporting unit to which the goodwill has been assigned exceeds management’s estimate of its fair value. Based on the guidance provided by ASC 350 and ASC Topic 280, Segment Reporting , management has determined that the Company operates in one segment and consists of one reporting unit given the similarities in economic characteristics between its operations and the common nature of its products, services and customers. Because the Company has only one reporting unit, and because the Company is publicly traded, the Company determines the fair value of the reporting unit based on its market capitalization as it believes this represents the best evidence of fair value. In the fourth quarter of fiscal 2019, management completed its annual goodwill impairment test and concluded that the Company’s goodwill was not impaired. The Company’s conclusion that goodwill was not impaired was based on a comparison of its net assets to its market capitalization. Because the Company determines the fair value of its reporting unit based on its market capitalization, the Company’s future reviews of goodwill for impairment may be impacted by changes in the price of the Company’s common stock, par value $0.001 per share (“Common Stock”). For example, a significant decline in the price of the Common Stock may cause the fair value of its goodwill to fall below its carrying value. Therefore, the Company cannot assure that when it completes its future reviews of goodwill for impairment a material impairment charge will not be recorded. |
Guarantees | Guarantees In the ordinary course of business, the Company is not subject to potential obligations under guarantees that fall within the scope of FASB ASC Topic 460, Guarantees (“ASC 460”), except for standard indemnification and warranty provisions that are contained within many of the Company’s customer license and service agreements and certain supplier agreements, and give rise only to the disclosure requirements prescribed by ASC 460. Indemnification and warranty provisions contained within the Company’s customer license and service agreements and certain supplier agreements are generally consistent with those prevalent in the Company’s industry. The Company has not historically incurred significant obligations under customer indemnification or warranty provisions and does not expect to incur significant obligations in the future. Accordingly, the Company does not maintain accruals for potential customer indemnification or warranty-related obligations. |
Income Taxes | Income Taxes The Company accounts for income taxes in accordance with FASB ASC Topic 740, Income Taxes (“ASC 740”). Deferred tax assets and liabilities arise from temporary differences between the tax bases of assets and liabilities and their reported amounts in the financial statements that will result in taxable or deductible amounts in future years. Management evaluates the available evidence about future taxable income and other possible sources of realization of deferred tax assets. The valuation allowance reduces deferred tax assets to an amount that represents management’s best estimate of the amount of such deferred tax assets that more likely than not will be realized. See Note 7 of the consolidated financial statements for additional details. The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the tax authorities, based on the technical merits of the position. The tax benefit is measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. The Company recognizes interest and penalties related to income tax matters in income tax expense. See Note 7 of the consolidated financial statements for additional details. |
Stock-Based Compensation | Stock-Based Compensation The Company issues RSUs, stock options, performance options, and Senior Executive Long-Term Incentive Restricted Stock Units (“Senior Executive Performance RSUs”) as awards to its employees. Additionally, eligible employees may participate in the Company’s ESPP. Employee stock awards are measured at fair value on the date of grant and expense is recognized using the straight-line single-option method in accordance with FASB ASC Topic 718, Compensation—Stock Compensation . Forfeitures are recorded as they occur. The Company assigns fair value to RSUs based on the closing stock price of its Common Stock on the date of grant. The Company estimates the fair value of stock options and ESPP shares using the Black-Scholes option pricing model. The Black-Scholes option pricing model requires subjective assumptions, including future stock price volatility and expected time to exercise, which greatly affect the calculated values. The expected term of options granted is derived from historical data on employee exercises and post-vesting employment termination behavior. The risk-free rate selected to value any particular grant is based on the U.S. Treasury rate that corresponds to the expected life of the grant effective as of the date of the grant. The expected volatility is based on the historical volatility of the Company’s stock price. These factors could change in the future, affecting the determination of stock-based compensation expense in future periods. The Company estimates the fair value of performance options, Senior Executive Performance RSUs, and similar awards using the Monte-Carlo simulation. The Monte-Carlo simulation requires subjective assumptions, including the Company’s valuation date stock price, the annual risk-free interest rate, expected volatility, the probability of reaching the stock performance targets, and a 20-trading-day average stock price. |
Comprehensive Income (Loss) | Comprehensive Income (Loss) Comprehensive income (loss) consists of net income (loss), unrealized gains and losses on available-for-sale securities, and foreign currency translation adjustments. |
Recently Adopted and Recently Issued Accounting Pronouncements | Recently Adopted Accounting Pronouncements In February 2018, the FASB issued Accounting Standards Update (“ASU”) No. 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Incom e, which allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act of 2017 (the “Jobs Act”). The Company elected not to reclassify the stranded tax effects to retained earnings as they were not material the Company’s consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”). ASU 2016-02 and its related amendments (collectively known as “ASC 842”) which require lessees to record most leases on the balance sheet but recognize expenses in the income statement in a manner similar to previous guidance. The way in which entities classify leases determines how to recognize lease-related revenue and expenses. The Company adopted ASC 842 as of October 1, 2019 using the optional transition method and will not adjust the comparative period financial statements for the effects of the new standard or make the new, expanded required disclosures for periods prior to the adoption date. Accordingly, the results for the nine months ended June 30, 2019 continue to be reported under the accounting guidance, ASC Topic 840, Leases (“ASC 840”), in effect for that period. The Company elected to use the package of practical expedients to not reassess: (i) whether any expired or existing contracts are or contain leases, (ii) lease classification for any expired or existing leases, and (iii) initial direct costs for any existing leases. The Company also elected the practical expedient not to separate the non-lease components of a contract from the lease component to which they relate. In addition, the Company made an accounting policy election that will keep leases with an initial term of twelve months or less off the consolidated balance sheet. The adoption of ASC 842 had a material impact on the consolidated balance sheet as of October 1, 2019, and resulted in the recognition of $8.2 million of lease liabilities and $6.8 million of right-of-use (“ROU”) assets for those leases classified as operating leases. The adoption of ASC 842 did not have a material impact on the Company’s consolidated statements of operations and other comprehensive income (loss) or consolidated statements of cash flows. See Note 8 of the consolidated financial statements for additional details. Recently Issued Accounting Pronouncements In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in ASC 740 and also clarifies and amends existing guidance to improve consistent application. ASU 2019-12 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. Early adoption is permitted, including adoption in an interim period. The Company is currently in the process of evaluating the potential impact of adoption of this updated authoritative guidance on the consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (ASC 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (“ASU 2018-15”), which requires hosting arrangements that are service contracts to follow the guidance for internal-use software to determine which implementation costs can be capitalized. ASU 2018-15 is effective either prospectively or retrospectively for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years, with early adoption permitted. The Company does not expect the adoption of ASU 2018-15 to have a material impact on its consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”), to eliminate, add, and modify certain disclosure requirements for fair value measurements. Entities will no longer be required to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, but public companies will be required to disclose the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements. The guidance is effective for annual and interim periods beginning after December 15, 2019, but entities are permitted to early adopt either the entire standard or only the provisions that eliminate or modify the requirements. The Company does not expect the adoption of ASU 2018-13 to have a material impact on its consolidated financial statements. In January 2017, the FASB issued ASU No. 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment (“ASU 2017-04”), which eliminates Step 2 of the goodwill impairment test that had required a hypothetical purchase price allocation. Rather, entities should apply the same impairment assessment to all reporting units and recognize an impairment loss for the amount by which a reporting unit’s carrying amount exceeds its fair value, without exceeding the total amount of goodwill allocated to that reporting unit. Entities will continue to have the option to perform a qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. ASU 2017-04 will be effective prospectively for annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2019. The Company does not expect the adoption of ASU 2017-04 to have a material impact on its consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), which requires entities to use a Current Expected Credit Loss model which is a new impairment model based on expected losses rather than incurred losses. Under this model, an entity would recognize an impairment allowance equal to its current estimate of all contractual cash flows that the entity does not expect to collect from financial assets measured at amortized cost. The entity’s estimate would consider relevant information about past events, current conditions, and reasonable and supportable forecasts. ASU 2016-13 is effective for interim and annual reporting periods beginning after December 31, 2019 with early adoption permitted for annual reporting periods beginning after December 31, 2018. The Company is currently evaluating the impact ASU 2016-13 will have on its consolidated financial statements. |
Leases | Leases The Company determines if an arrangement is a lease at inception in accordance with ASC 842. The lease term begins on the commencement date, which is the date the Company takes possession of the property, and may include options to extend or terminate the lease when it is reasonably certain that the option will be exercised. The lease term is used to determine lease classification as an operating or finance lease and is used to calculate straight-line expense for operating leases. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make payments arising from the lease. As a practical expedient, lease agreements with lease and non-lease components are accounted for as a single lease component for all asset classes, which are comprised of real estate leases and auto leases. ROU assets and lease liabilities are recognized at commencement date based upon the present value of lease payments over the lease term. ROU assets also include prepaid lease payments and exclude lease incentives received. The Company estimates contingent lease incentives when it is probable that the Company is entitled to the incentive at lease commencement. Since the Company’s leases do not typically provide an implicit rate, the Company uses its incremental borrowing rate based upon the information available at commencement date of each lease. The determination of the incremental borrowing rate requires judgment. The Company determines the incremental borrowing rate using the Company’s current secured borrowing rate. The Company elected the short-term lease recognition exemption for all leases that qualify. Therefore, leases with an initial term of twelve months or less are not recorded on the consolidated balance sheet; instead, lease payments are recognized as lease expenses on a straight-line basis over the lease term. See Note 8 of the consolidated financial statements for additional details. |
Nature of Operations and Summ_3
Nature of Operations and Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Schedule of Potentially Dilutive Common Shares Excluded from Calculation of Net Income (Loss) per Share | For the three and nine months ended June 30, 2020 and 2019, the following potentially dilutive common shares were excluded from the calculation of net income (loss) per share, as they would have been antidilutive ( amounts in thousands ): Three Months Ended June 30, Nine Months Ended June 30, 2020 2019 2020 2019 Stock options 207 1,664 270 1,664 RSUs 1,718 2,498 1,577 2,498 ESPP common stock equivalents 73 65 — 65 Performance RSUs 67 — 26 — Total potentially dilutive common shares outstanding 2,065 4,227 1,873 4,227 |
Schedule of Calculation of Basic and Diluted Net Income (Loss) Per Share | The calculation of basic and diluted net income (loss) per share is as follows ( amounts in thousands, except per share data) : Three Months Ended June 30, Nine Months Ended June 30, 2020 2019 2020 2019 Net income (loss) $ 1,348 $ (99) $ 2,816 $ (4,006) Weighted-average shares outstanding—basic 41,483 39,936 41,251 39,034 Common stock equivalents 945 — 988 — Weighted-average shares outstanding—diluted 42,428 39,936 42,239 39,034 Net income (loss) per share: Basic $ 0.03 $ 0.00 $ 0.07 $ (0.10) Diluted $ 0.03 $ 0.00 $ 0.07 $ (0.10) |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 9 Months Ended |
Jun. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenue | The following table presents the Company's revenue disaggregated by major product category ( amounts in thousands ): Three Months Ended June 30, Nine Months Ended June 30, 2020 2019 2020 2019 Major product category Deposits software and hardware $ 12,222 $ 10,521 $ 32,822 $ 28,786 Deposits services and other 4,726 4,528 13,399 11,041 Deposits revenue 16,948 15,049 46,221 39,827 Identity verification software and hardware 990 1,367 3,358 3,682 Identity verification services and other 7,475 5,490 21,093 16,063 Identity verification revenue 8,465 6,857 24,451 19,745 Total revenue $ 25,413 $ 21,906 $ 70,672 $ 59,572 |
Schedule of Contract Balances | The following table provides information about contract assets and contract liabilities from contracts with customers ( amounts in thousands ): June 30, 2020 September 30, 2019 Contract assets, current $ 3,410 $ 2,350 Contract assets, non-current 4,338 581 Contract liabilities (deferred revenue), current 9,089 5,612 Contract liabilities (deferred revenue), non-current $ 1,240 $ 736 |
Restructuring (Tables)
Restructuring (Tables) | 9 Months Ended |
Jun. 30, 2020 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Changes in Restructuring Accrual | The following table summarizes changes in the restructuring accrual during the nine months ended June 30, 2020 (amounts shown in thousands) : Balance at September 30, 2019 $ 1,526 Accrual reversed (114) Payments (1,165) Foreign currency effect on the restructuring accrual (27) Balance at June 30, 2020 $ 220 |
Investments (Tables)
Investments (Tables) | 9 Months Ended |
Jun. 30, 2020 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Investments by Type of Security | The following tables summarize investments by type of security as of June 30, 2020 and September 30, 2019, respectively (amounts shown in thousands): June 30, 2020: Cost Gross Unrealized Gains Gross Unrealized Losses Fair Market Value Available-for-sale securities: U.S. Treasury, short-term $ 8,245 $ 62 $ — $ 8,307 Asset-backed securities, short-term 3,769 34 — 3,803 Corporate debt securities, short-term 18,147 24 — 18,171 Asset-backed securities, long-term 964 14 — 978 Corporate debt securities, long-term 1,936 28 — 1,964 Total $ 33,061 $ 162 $ — $ 33,223 September 30, 2019: Cost Gross Unrealized Gains Gross Unrealized Losses Fair Market Value Available-for-sale securities: U.S. Treasury, short-term $ 4,240 $ 2 $ — $ 4,242 Corporate debt securities, short-term 12,258 2 — 12,260 U.S. Treasury, long-term 1,102 — (1) 1,101 Corporate debt securities, long-term 451 — — 451 Total $ 18,051 $ 4 $ (1) $ 18,054 |
Schedule of Fair Value of Investments Measured on Recurring Basis | The following tables represent the fair value hierarchy of the Company’s investments and acquisition-related contingent consideration as of June 30, 2020 and September 30, 2019, respectively (amounts shown in thousands) : June 30, 2020: Balance Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Short-term investments: U.S. Treasury $ 8,307 $ 8,307 $ — $ — Asset-backed securities 3,803 — 3,803 — Corporate debt securities Financial 6,385 — 6,385 — Industrial 1,918 — 1,918 — Commercial paper Financial 6,978 — 6,978 — Industrial 2,890 — 2,890 — Total short-term investments at fair value 30,281 8,307 21,974 — Long-term investments: U.S. Treasury — — — — Asset-backed securities 978 — 978 — Corporate debt securities Financial 997 — 997 — Industrial 967 — 967 — Total assets at fair value $ 33,223 $ 8,307 $ 24,916 $ — Liabilities: Acquisition-related contingent consideration 686 — — 686 Total liabilities at fair value $ 686 $ — $ — $ 686 September 30, 2019: Balance Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Short-term investments: U.S. Treasury $ 4,242 $ 4,242 $ — $ — Corporate debt securities Financial 2,503 — 2,503 — Industrial 1,371 — 1,371 — Commercial paper Financial 5,560 — 5,560 — Industrial 2,826 — 2,826 — Total short-term investments at fair value 16,502 4,242 12,260 — Long-term investments: U.S. Treasury 1,101 1,101 — — Corporate debt securities Financial 451 — 451 — Total assets at fair value $ 18,054 $ 5,343 $ 12,711 $ — Liabilities: Acquisition-related contingent consideration 1,601 — — 1,601 Total liabilities at fair value $ 1,601 $ — $ — $ 1,601 |
Schedule of Contingent Consideration Measured at Fair Value | The following table includes a summary of the contingent consideration measured at fair value using significant unobservable inputs (Level 3) during the nine months ended June 30, 2020 (amounts shown in thousands) : Balance at September 30, 2019 $ 1,601 Expenses recorded due to changes in fair value 98 Payment of contingent consideration (1,049) Foreign currency effect on contingent consideration 36 Balance at June 30, 2020 $ 686 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 9 Months Ended |
Jun. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The following table summarizes changes in the balance of goodwill during the nine months ended June 30, 2020 (amounts shown in thousands) : Balance at September 30, 2019 $ 32,636 Other adjustments(1) 806 Foreign currency effect on goodwill and other 807 Balance at June 30, 2020 $ 34,249 (1) During the three months ended December 31, 2019, the Company determined that it had incorrectly classified $0.8 million of contract assets in its fair value estimate associated with the acquisition of A2iA. This asset was incorrectly recorded as other non-current assets with an offset to goodwill on the Company’s consolidated balance sheet during the three months ended June 30, 2018 and subsequent financial statements. The Company has determined that the adjustment was not material to any previously reported financial statements. Therefore, the consolidated balance sheet as of June 30, 2020 has been adjusted. |
Schedule of Intangible Assets | Intangible assets as of June 30, 2020 and September 30, 2019, respectively, are summarized as follows (amounts shown in thousands, except for years): June 30, 2020: Weighted Average Amortization Period Cost Accumulated Amortization Net Completed technologies 6.4 years $ 20,341 $ 9,095 $ 11,246 Customer relationships 4.8 years 17,628 8,866 8,762 Trade names 4.5 years 618 475 143 Total intangible assets $ 38,587 $ 18,436 $ 20,151 September 30, 2019: Weighted Average Amortization Period Cost Accumulated Amortization Net Completed technologies 6.4 years $ 20,341 $ 7,104 $ 13,237 Customer relationships 4.8 years 17,628 6,701 10,927 Trade names 4.5 years 618 377 241 Total intangible assets $ 38,587 $ 14,182 $ 24,405 |
Schedule of Estimated Future Amortization Expense | The estimated future amortization expense related to intangible assets for each of the five succeeding fiscal years is expected to be as follows (amounts shown in thousands): Estimated Future Amortization Expense 2020—remaining $ 1,585 2021 6,134 2022 5,738 2023 3,766 2024 1,779 2025 1,149 Total $ 20,151 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 9 Months Ended |
Jun. 30, 2020 | |
Equity [Abstract] | |
Schedule of Stock-Based Compensation Expense Related to Stock Options and RSUs | The following table summarizes stock-based compensation expense related to RSUs, stock options, and ESPP shares, which was allocated as follows (amounts shown in thousands) : Three Months Ended June 30, Nine Months Ended June 30, 2020 2019 2020 2019 Cost of revenue $ 73 $ 55 $ 199 $ 155 Selling and marketing 823 705 2,194 2,242 Research and development 591 437 1,740 1,438 General and administrative 1,014 1,071 2,979 3,456 Stock-based compensation expense included in expenses $ 2,501 $ 2,268 $ 7,112 $ 7,291 |
Schedule of Fair Value Calculations for Stock-Based Compensation Awards | The fair value calculations for stock-based compensation awards to employees for the nine months ended June 30, 2020 and 2019 were based on the following assumptions: Nine Months Ended June 30, 2020 Nine Months Ended June 30, 2019 Risk-free interest rate 1.35% 2.88% – 3.08% Expected life (years) 5.78 5.46 Expected volatility 48% 57% Expected dividends None None |
Schedule of Stock Option Activity | The following table summarizes stock option activity under the Company’s equity plans during the nine months ended June 30, 2020: Number of Shares Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term (in Years) Aggregate Intrinsic Value ( in thousands ) Outstanding at September 30, 2019 1,686,902 $ 7.00 5.4 $ 4,882 Granted 92,610 $ 9.49 Exercised (301,060) $ 3.46 Canceled (36,146) $ 10.76 Outstanding at June 30, 2020 1,442,306 $ 7.81 5.5 $ 2,978 Vested and Expected to Vest at June 30, 2020 1,442,306 $ 7.81 5.5 $ 2,978 Exercisable at June 30, 2020 1,015,542 $ 7.16 4.2 $ 2,876 |
Schedule of RSU Activity | The following table summarizes RSU activity under the Company’s equity plans during the nine months ended June 30, 2020: Number of Shares Weighted-Average Fair Market Value Per Share Outstanding at September 30, 2019 2,352,487 $ 8.26 Granted 1,346,405 $ 7.20 Settled (676,473) $ 7.66 Canceled (221,435) $ 8.37 Outstanding at June 30, 2020 2,800,984 $ 7.89 |
Schedule of Performance RSU Activity | Performance Restricted Stock Units The following table summarizes Performance RSU activity under the Company’s equity plans during the nine months ended June 30, 2020: Number of Shares Weighted-Average Fair Market Value Per Share Outstanding at September 30, 2019 1,722,551 $ 7.76 Granted 353,556 $ 6.06 Settled — $ — Canceled (1,722,551) $ 7.76 Outstanding at June 30, 2020 353,556 $ 6.06 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Jun. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Maturities of Operating Lease Liabilities | Maturities of our operating lease liabilities as of June 30, 2020 were as follows (amounts shown in thousands) : Operating leases 2020—remaining $ 355 2021 2,068 2022 1,707 2023 1,709 2024 1,378 2025 290 Thereafter 644 Total lease payments 8,151 Less: amount representing interest (826) Present value of future lease payments 7,325 |
Schedule of Future Minimum Rental Payments for Operating Leases Under ASC 840 | As determined under ASC 840, the future minimum lease payments related to lease agreements with a remaining noncancelable term in excess of one year, as of September 30, 2019 were as follows: Operating leases 2020 $ 1,641 2021 2,157 2022 1,777 2023 1,550 2024 1,151 2025 36 Thereafter — Total minimum lease payments $ 8,312 |
Nature of Operations and Summ_4
Nature of Operations and Summary of Significant Accounting Policies - Additional Information (Details) $ / shares in Units, checkDeposits in Billions | Oct. 01, 2019USD ($) | Jun. 30, 2020USD ($)institutioncheckDepositspatent$ / shares | Dec. 31, 2019USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2020USD ($)segmentpatentinstitutioncheckDeposits$ / shares | Jun. 30, 2019USD ($) | Sep. 30, 2019USD ($)$ / shares |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Number of financial institutions signed agreements to deploy mobile deposit (more than) | institution | 7,500 | 7,500 | |||||
Number of check deposits processed (more than) | checkDeposits | 4 | 4 | |||||
Number of patents granted | patent | 64 | 64 | |||||
Number of pending patent applications | patent | 19 | 19 | |||||
Net gain (loss) resulting from foreign exchange translation | $ 1,135,000 | $ 814,000 | $ 1,324,000 | $ (1,213,000) | |||
Other than temporary impairments recognized on investments | 0 | 0 | 0 | 0 | |||
Write-offs of allowance for doubtful accounts | 100,000 | 100,000 | |||||
Allowance for doubtful accounts receivable | 200,000 | 200,000 | $ 200,000 | ||||
Capitalized software development costs | $ 0 | $ 0 | 0 | 0 | |||
Amortization expense of capitalized software development costs | 0 | 0 | |||||
Capitalized software development costs for internal use | 100,000 | 200,000 | |||||
Amortization expense from capitalized software development costs for internal use | $ 300,000 | 300,000 | |||||
Number of operating segments | segment | 1 | ||||||
Number of reporting units | segment | 1 | ||||||
Goodwill impairment | $ 0 | ||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | ||||
Impairment charges related to intangible assets | $ 0 | $ 0 | |||||
Trading-day average stock price period | 20 days | ||||||
Accumulated other comprehensive loss | $ 2,581,000 | $ 2,581,000 | $ 4,061,000 | ||||
Operating lease liabilities | $ 8,200,000 | 7,325,000 | 7,325,000 | ||||
Operating ROU assets | $ 6,800,000 | $ 5,683,000 | $ 5,683,000 | ||||
Accounting Standards Update [Extensible List] | us-gaap:AccountingStandardsUpdate201602Member | us-gaap:AccountingStandardsUpdate201409Member | |||||
ICAR | Spanish Government Agencies | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Interest rate on loan agreement | 0.00% | 0.00% | |||||
Amount outstanding under loan agreement | $ 700,000 | $ 700,000 | 600,000 | ||||
ICAR | Spanish Government Agencies | Other current liabilities | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Amount outstanding under loan agreement | 100,000 | 100,000 | 200,000 | ||||
ICAR | Spanish Government Agencies | Other non-current liabilities | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Amount outstanding under loan agreement | $ 600,000 | $ 600,000 | $ 400,000 | ||||
Minimum | ICAR | Spanish Government Agencies | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Term of loan agreement | 5 years | ||||||
Maximum | ICAR | Spanish Government Agencies | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Term of loan agreement | 12 years |
Nature of Operations and Summ_5
Nature of Operations and Summary of Significant Accounting Policies - Potentially Dilutive Common Shares Excluded from Calculation of Net Loss per Share (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Total potentially dilutive common shares outstanding (in shares) | 2,065 | 4,227 | 1,873 | 4,227 |
Stock options | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Total potentially dilutive common shares outstanding (in shares) | 207 | 1,664 | 270 | 1,664 |
RSUs | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Total potentially dilutive common shares outstanding (in shares) | 1,718 | 2,498 | 1,577 | 2,498 |
ESPP common stock equivalents | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Total potentially dilutive common shares outstanding (in shares) | 73 | 65 | 0 | 65 |
Performance RSUs | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Total potentially dilutive common shares outstanding (in shares) | 67 | 0 | 26 | 0 |
Nature of Operations and Summ_6
Nature of Operations and Summary of Significant Accounting Policies - Calculation of Basic and Diluted Net Loss Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Accounting Policies [Abstract] | ||||
Net income (loss) | $ 1,348 | $ (99) | $ 2,816 | $ (4,006) |
Weighted-average shares outstanding - basic (in shares) | 41,483 | 39,936 | 41,251 | 39,034 |
Common stock equivalents (in shares) | 945 | 0 | 988 | 0 |
Weighted-average shares outstanding - diluted (in shares) | 42,428 | 39,936 | 42,239 | 39,034 |
Net income (loss) per share: | ||||
Basic (in dollars per share) | $ 0.03 | $ 0 | $ 0.07 | $ (0.10) |
Diluted (in dollars per share) | $ 0.03 | $ 0 | $ 0.07 | $ (0.10) |
Revenue Recognition - Disaggreg
Revenue Recognition - Disaggregation of Revenues (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 25,413 | $ 21,906 | $ 70,672 | $ 59,572 |
Deposits revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 16,948 | 15,049 | 46,221 | 39,827 |
Identity verification revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 8,465 | 6,857 | 24,451 | 19,745 |
Transferred at Point in Time | Deposits software and hardware | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 12,222 | 10,521 | 32,822 | 28,786 |
Transferred at Point in Time | Identity verification software and hardware | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 990 | 1,367 | 3,358 | 3,682 |
Transferred over Time | Deposits services and other | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 4,726 | 4,528 | 13,399 | 11,041 |
Transferred over Time | Identity verification services and other | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 7,475 | $ 5,490 | $ 21,093 | $ 16,063 |
Revenue Recognition - Contract
Revenue Recognition - Contract Balances (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Sep. 30, 2019 |
Revenue from Contract with Customer [Abstract] | ||
Contract assets, current | $ 3,410 | $ 2,350 |
Contract assets, non-current | 4,338 | 581 |
Contract liabilities (deferred revenue), current | 9,089 | 5,612 |
Contract liabilities (deferred revenue), non-current | $ 1,240 | $ 736 |
Revenue Recognition - Additiona
Revenue Recognition - Additional Information (Details) - USD ($) | 9 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Sep. 30, 2019 | |
Disaggregation of Revenue [Line Items] | |||
Revenue recognized included in contract liability balance at the beginning of the period | $ 5,600,000 | $ 4,200,000 | |
Impairment losses recognized on contract costs | 0 | 0 | |
Selling and marketing | |||
Disaggregation of Revenue [Line Items] | |||
Contract costs included in selling and marketing expenses | 600,000 | $ 400,000 | |
Other Current and Non-current Assets | |||
Disaggregation of Revenue [Line Items] | |||
Contract costs | $ 1,500,000 | $ 1,500,000 |
Restructuring (Details)
Restructuring (Details) - A2iA $ in Thousands | 9 Months Ended |
Jun. 30, 2020USD ($) | |
Restructuring Reserve [Roll Forward] | |
Balance at September 30, 2019 | $ 1,526 |
Accrual reversed | (114) |
Payments | (1,165) |
Foreign currency effect on the restructuring accrual | (27) |
Balance at June 30, 2020 | $ 220 |
Investments - Summary of Invest
Investments - Summary of Investments by Type of Security (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Sep. 30, 2019 |
Schedule Of Available For Sale Securities [Line Items] | ||
Cost | $ 33,061 | $ 18,051 |
Gross Unrealized Gains | 162 | 4 |
Gross Unrealized Losses | 0 | (1) |
Fair Market Value | 33,223 | 18,054 |
Short-term investments | U.S. Treasury | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Cost | 8,245 | 4,240 |
Gross Unrealized Gains | 62 | 2 |
Gross Unrealized Losses | 0 | 0 |
Fair Market Value | 8,307 | 4,242 |
Short-term investments | Asset-backed securities | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Cost | 3,769 | |
Gross Unrealized Gains | 34 | |
Gross Unrealized Losses | 0 | |
Fair Market Value | 3,803 | |
Short-term investments | Corporate debt securities | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Cost | 18,147 | 12,258 |
Gross Unrealized Gains | 24 | 2 |
Gross Unrealized Losses | 0 | 0 |
Fair Market Value | 18,171 | 12,260 |
Long-term investments | U.S. Treasury | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Cost | 1,102 | |
Gross Unrealized Gains | 0 | |
Gross Unrealized Losses | (1) | |
Fair Market Value | 1,101 | |
Long-term investments | Asset-backed securities | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Cost | 964 | |
Gross Unrealized Gains | 14 | |
Gross Unrealized Losses | 0 | |
Fair Market Value | 978 | |
Long-term investments | Corporate debt securities | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Cost | 1,936 | 451 |
Gross Unrealized Gains | 28 | 0 |
Gross Unrealized Losses | 0 | 0 |
Fair Market Value | $ 1,964 | $ 451 |
Investments - Additional Inform
Investments - Additional Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Sep. 30, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |||||
Other-than-temporary impairment charges recognized | $ 0 | $ 0 | $ 0 | $ 0 | |
Realized gains (losses) from sale of available-for-sale securities | 0 | $ 0 | 0 | $ 0 | |
Acquisition-related contingent consideration | $ 686,000 | $ 686,000 | $ 1,601,000 |
Investments - Summary of Fair V
Investments - Summary of Fair Value of Investments Measured on Recurring Basis (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Sep. 30, 2019 |
Assets | ||
Short-term investments | $ 30,281 | $ 16,502 |
Total assets at fair value | 33,223 | 18,054 |
Liabilities | ||
Acquisition-related contingent consideration | 686 | 1,601 |
Total liabilities at fair value | 686 | 1,601 |
U.S. Treasury | ||
Assets | ||
Short-term investments | 8,307 | 4,242 |
Long-term investments | 0 | 1,101 |
Asset-backed securities | ||
Assets | ||
Short-term investments | 3,803 | |
Long-term investments | 978 | |
Corporate debt securities | Financial | ||
Assets | ||
Short-term investments | 6,385 | 2,503 |
Long-term investments | 997 | 451 |
Corporate debt securities | Industrial | ||
Assets | ||
Short-term investments | 1,918 | 1,371 |
Long-term investments | 967 | |
Commercial paper | Financial | ||
Assets | ||
Short-term investments | 6,978 | 5,560 |
Commercial paper | Industrial | ||
Assets | ||
Short-term investments | 2,890 | 2,826 |
Quoted Prices in Active Markets (Level 1) | ||
Assets | ||
Short-term investments | 8,307 | 4,242 |
Total assets at fair value | 8,307 | 5,343 |
Liabilities | ||
Acquisition-related contingent consideration | 0 | 0 |
Total liabilities at fair value | 0 | 0 |
Quoted Prices in Active Markets (Level 1) | U.S. Treasury | ||
Assets | ||
Short-term investments | 8,307 | 4,242 |
Long-term investments | 0 | 1,101 |
Quoted Prices in Active Markets (Level 1) | Asset-backed securities | ||
Assets | ||
Short-term investments | 0 | |
Long-term investments | 0 | |
Quoted Prices in Active Markets (Level 1) | Corporate debt securities | Financial | ||
Assets | ||
Short-term investments | 0 | 0 |
Long-term investments | 0 | 0 |
Quoted Prices in Active Markets (Level 1) | Corporate debt securities | Industrial | ||
Assets | ||
Short-term investments | 0 | 0 |
Long-term investments | 0 | |
Quoted Prices in Active Markets (Level 1) | Commercial paper | Financial | ||
Assets | ||
Short-term investments | 0 | 0 |
Quoted Prices in Active Markets (Level 1) | Commercial paper | Industrial | ||
Assets | ||
Short-term investments | 0 | 0 |
Significant Other Observable Inputs (Level 2) | ||
Assets | ||
Short-term investments | 21,974 | 12,260 |
Total assets at fair value | 24,916 | 12,711 |
Liabilities | ||
Acquisition-related contingent consideration | 0 | 0 |
Total liabilities at fair value | 0 | 0 |
Significant Other Observable Inputs (Level 2) | U.S. Treasury | ||
Assets | ||
Short-term investments | 0 | 0 |
Long-term investments | 0 | 0 |
Significant Other Observable Inputs (Level 2) | Asset-backed securities | ||
Assets | ||
Short-term investments | 3,803 | |
Long-term investments | 978 | |
Significant Other Observable Inputs (Level 2) | Corporate debt securities | Financial | ||
Assets | ||
Short-term investments | 6,385 | 2,503 |
Long-term investments | 997 | 451 |
Significant Other Observable Inputs (Level 2) | Corporate debt securities | Industrial | ||
Assets | ||
Short-term investments | 1,918 | 1,371 |
Long-term investments | 967 | |
Significant Other Observable Inputs (Level 2) | Commercial paper | Financial | ||
Assets | ||
Short-term investments | 6,978 | 5,560 |
Significant Other Observable Inputs (Level 2) | Commercial paper | Industrial | ||
Assets | ||
Short-term investments | 2,890 | 2,826 |
Significant Unobservable Inputs (Level 3) | ||
Assets | ||
Short-term investments | 0 | 0 |
Total assets at fair value | 0 | 0 |
Liabilities | ||
Acquisition-related contingent consideration | 686 | 1,601 |
Total liabilities at fair value | 686 | 1,601 |
Significant Unobservable Inputs (Level 3) | U.S. Treasury | ||
Assets | ||
Short-term investments | 0 | 0 |
Long-term investments | 0 | 0 |
Significant Unobservable Inputs (Level 3) | Asset-backed securities | ||
Assets | ||
Short-term investments | 0 | |
Long-term investments | 0 | |
Significant Unobservable Inputs (Level 3) | Corporate debt securities | Financial | ||
Assets | ||
Short-term investments | 0 | 0 |
Long-term investments | 0 | 0 |
Significant Unobservable Inputs (Level 3) | Corporate debt securities | Industrial | ||
Assets | ||
Short-term investments | 0 | 0 |
Long-term investments | 0 | |
Significant Unobservable Inputs (Level 3) | Commercial paper | Financial | ||
Assets | ||
Short-term investments | 0 | 0 |
Significant Unobservable Inputs (Level 3) | Commercial paper | Industrial | ||
Assets | ||
Short-term investments | $ 0 | $ 0 |
Investments - Summary of Contin
Investments - Summary of Contingent Consideration Measured at Fair Value (Details) - Contingent Consideration $ in Thousands | 9 Months Ended |
Jun. 30, 2020USD ($) | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
September 30, 2019 | $ 1,601 |
Expenses recorded due to changes in fair value | 98 |
Payment of contingent consideration | (1,049) |
Foreign currency effect on contingent consideration | 36 |
Balance at June 30, 2020 | $ 686 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Sep. 30, 2019 | |
Goodwill and Intangible Assets [Line Items] | |||||
Goodwill | $ 34,249 | $ 34,249 | $ 32,636 | ||
Amortization of intangible assets | $ 1,600 | $ 1,800 | $ 4,786 | $ 5,298 | |
Minimum | |||||
Goodwill and Intangible Assets [Line Items] | |||||
Estimated useful lives of intangible assets (in years) | 2 years | ||||
Maximum | |||||
Goodwill and Intangible Assets [Line Items] | |||||
Estimated useful lives of intangible assets (in years) | 7 years |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Changes in Goodwill (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Mar. 31, 2020 | Jun. 30, 2020 | |
Goodwill [Roll Forward] | ||
Balance at September 30, 2019 | $ 32,636 | |
Foreign currency effect on goodwill and other | 807 | |
Balance at June 30, 2020 | 34,249 | |
A2iA | ||
Goodwill [Roll Forward] | ||
Other adjustments | $ 800 | $ 806 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Sep. 30, 2019 | |
Indefinite Lived Intangible Assets By Major Class [Line Items] | ||
Cost | $ 38,587 | $ 38,587 |
Accumulated Amortization | 18,436 | 14,182 |
Net | $ 20,151 | $ 24,405 |
Completed technologies | ||
Indefinite Lived Intangible Assets By Major Class [Line Items] | ||
Weighted Average Amortization Period | 6 years 4 months 24 days | 6 years 4 months 24 days |
Cost | $ 20,341 | $ 20,341 |
Accumulated Amortization | 9,095 | 7,104 |
Net | $ 11,246 | $ 13,237 |
Customer relationships | ||
Indefinite Lived Intangible Assets By Major Class [Line Items] | ||
Weighted Average Amortization Period | 4 years 9 months 18 days | 4 years 9 months 18 days |
Cost | $ 17,628 | $ 17,628 |
Accumulated Amortization | 8,866 | 6,701 |
Net | $ 8,762 | $ 10,927 |
Trade names | ||
Indefinite Lived Intangible Assets By Major Class [Line Items] | ||
Weighted Average Amortization Period | 4 years 6 months | 4 years 6 months |
Cost | $ 618 | $ 618 |
Accumulated Amortization | 475 | 377 |
Net | $ 143 | $ 241 |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets - Schedule of Estimated Future Amortization Expense (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Sep. 30, 2019 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2020—remaining | $ 1,585 | |
2021 | 6,134 | |
2022 | 5,738 | |
2023 | 3,766 | |
2024 | 1,779 | |
2025 | 1,149 | |
Net | $ 20,151 | $ 24,405 |
Stockholders' Equity - Stock-Ba
Stockholders' Equity - Stock-Based Compensation Expense Related to Stock Options and RSUs (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Stock-based compensation expense included in expenses | $ 2,501 | $ 2,268 | $ 7,112 | $ 7,291 |
Cost of revenue | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Stock-based compensation expense included in expenses | 73 | 55 | 199 | 155 |
Selling and marketing | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Stock-based compensation expense included in expenses | 823 | 705 | 2,194 | 2,242 |
Research and development | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Stock-based compensation expense included in expenses | 591 | 437 | 1,740 | 1,438 |
General and administrative | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Stock-based compensation expense included in expenses | $ 1,014 | $ 1,071 | $ 2,979 | $ 3,456 |
Stockholders' Equity - Fair Val
Stockholders' Equity - Fair Value Calculations for Stock-Based Compensation Awards (Details) | 9 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Risk-free interest rate | 1.35% | |
Expected life (years) | 5 years 9 months 10 days | 5 years 5 months 15 days |
Expected volatility | 48.00% | 57.00% |
Expected dividends | 0.00% | 0.00% |
Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Risk-free interest rate | 2.88% | |
Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Risk-free interest rate | 3.08% |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Details) | Nov. 06, 2018$ / sharesshares | Jun. 30, 2020USD ($)$ / sharesshares | Jun. 30, 2019USD ($) | Jun. 30, 2020USD ($)$ / sharesshares | Jun. 30, 2020USD ($)$ / sharesshares | Jun. 30, 2019USD ($)$ / shares | Jan. 31, 2020shares | Dec. 13, 2019USD ($) | Sep. 30, 2019$ / sharesshares | Feb. 28, 2019 | Oct. 23, 2018$ / right$ / sharesshares | Mar. 07, 2018shares | Mar. 10, 2017shares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Unrecognized compensation expense | $ | $ 19,800,000 | $ 19,800,000 | $ 19,800,000 | ||||||||||
Weighted average period for unrecognized compensation expense expected to be recognized (in years) | 2 years 6 months | ||||||||||||
Purchase of common stock (in shares) | 1,442,306 | 1,442,306 | 1,442,306 | 1,686,902 | |||||||||
Discount rate from market price, purchase date | 0.15 | ||||||||||||
Recognized compensation expense | $ | $ 2,501,000 | $ 2,268,000 | $ 7,112,000 | $ 7,291,000 | |||||||||
Total intrinsic value of options exercised | $ | $ 1,700,000 | $ 11,000,000 | |||||||||||
Weighted average fair value of options granted (in dollars per share) | $ / shares | $ 4.32 | $ 5.08 | |||||||||||
Amount authorized and approved under share repurchase program | $ | $ 10,000,000 | ||||||||||||
Amount of shares repurchased | $ | $ 1,000,000 | $ 1,000,000 | |||||||||||
Number of shares repurchased (in shares) | 137,000 | ||||||||||||
Average price of shares repurchased (in dollars per share) | $ / shares | $ 7.33 | ||||||||||||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||
Percentage of common stock outstanding for acquiring person under right agreement | 4.90% | ||||||||||||
Series B Preferred Stock | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Number of preferred share purchase right for each share of common stock (in shares) | 1 | ||||||||||||
Preferred stock, share conversion ratio | 0.001000 | ||||||||||||
Preferred stock, purchase price per right (in dollars per right) | $ / right | 35 | ||||||||||||
Preferred stock, redemption price per share (in dollars per share) | $ / shares | $ 0.0001 | ||||||||||||
RSUs | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Weighted average period for unrecognized compensation expense expected to be recognized (in years) | 2 years 7 months 6 days | ||||||||||||
Awards outstanding (in shares) | 2,800,984 | 2,800,984 | 2,800,984 | 2,352,487 | |||||||||
Recognized compensation expense | $ | $ 1,800,000 | 1,600,000 | $ 5,200,000 | $ 5,300,000 | |||||||||
Unrecognized compensation expense related to nonvested awards | $ | 15,200,000 | $ 15,200,000 | 15,200,000 | ||||||||||
Performance RSUs | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Unrecognized compensation expense | $ | $ 1,700,000 | $ 1,700,000 | $ 1,700,000 | ||||||||||
Weighted average period for unrecognized compensation expense expected to be recognized (in years) | 1 year 9 months 18 days | ||||||||||||
Awards outstanding (in shares) | 353,556 | 353,556 | 353,556 | 1,722,551 | |||||||||
Recognized compensation expense | $ | $ 200,000 | 200,000 | $ 500,000 | 700,000 | |||||||||
Stock options | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Weighted average period for unrecognized compensation expense expected to be recognized (in years) | 2 years 8 months 12 days | ||||||||||||
Recognized compensation expense | $ | 200,000 | 200,000 | $ 500,000 | 500,000 | |||||||||
Unrecognized compensation expense related to outstanding stock options | $ | 1,800,000 | $ 1,800,000 | 1,800,000 | ||||||||||
Performance Options | Chief Executive Officer | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Unrecognized compensation expense | $ | 1,100,000 | $ 1,100,000 | $ 1,100,000 | ||||||||||
Weighted average period for unrecognized compensation expense expected to be recognized (in years) | 1 year 4 months 24 days | ||||||||||||
Number of common stock reserved for future grants (in shares) | 800,000 | ||||||||||||
Recognized compensation expense | $ | $ 200,000 | 200,000 | $ 600,000 | 500,000 | |||||||||
Exercise price per share (in dollars per share) | $ / shares | $ 9.50 | ||||||||||||
Vesting period of awards | 3 years | ||||||||||||
2020 Plan | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Common stock reserved for issuance (in shares) | 4,500,000 | ||||||||||||
Additional common stock reserved for issuance (maximum) (in shares) | 107,903 | ||||||||||||
Number of common stock reserved for future grants (in shares) | 3,820,692 | 3,820,692 | 3,820,692 | ||||||||||
2020 Plan | RSUs | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Awards outstanding (in shares) | 300,395 | 300,395 | 300,395 | ||||||||||
2020 Plan | Performance RSUs | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Awards outstanding (in shares) | 353,556 | 353,556 | 353,556 | ||||||||||
Prior Plans | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Purchase of common stock (in shares) | 1,132,517 | 1,132,517 | 1,132,517 | ||||||||||
Prior Plans | RSUs | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Awards outstanding (in shares) | 1,989,599 | 1,989,599 | 1,989,599 | ||||||||||
ESPP | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Common stock reserved for issuance (in shares) | 724,407 | 724,407 | 724,407 | 1,000,000 | |||||||||
Shares issued to participants pursuant to employee stock purchase plan (in shares) | 275,593 | ||||||||||||
Recognized compensation expense | $ | $ 100,000 | $ 100,000 | $ 300,000 | $ 300,000 | |||||||||
ESPP | Minimum | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Discount rate from market price, offering date | 15.00% | ||||||||||||
Director Plan | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Common stock reserved for issuance (in shares) | 1,500,000 | ||||||||||||
Number of common stock reserved for future grants (in shares) | 287,385 | 287,385 | 287,385 | ||||||||||
Director Plan | RSUs | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Purchase of common stock (in shares) | 428,094 | 428,094 | 428,094 |
Stockholders' Equity - Stock Op
Stockholders' Equity - Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | |
Dec. 31, 2019 | Jun. 30, 2020 | Sep. 30, 2019 | |
Number of Shares | |||
Outstanding at September 30, 2019 (in shares) | 1,686,902 | 1,686,902 | |
Granted (in shares) | 92,610 | ||
Exercised (in shares) | (301,060) | ||
Canceled (in shares) | (36,146) | ||
Outstanding at June 30, 2020 (in shares) | 1,442,306 | ||
Weighted-Average Exercise Price | |||
Outstanding at September 30, 2019 (in dollars per share) | $ 7 | $ 7 | |
Granted (in dollars per share) | 9.49 | ||
Exercised (in dollars per share) | 3.46 | ||
Canceled (in dollars per share) | 10.76 | ||
Outstanding at June 30, 2020 (in dollars per share) | $ 7.81 | ||
Weighted-Average Remaining Contractual Term (in Years) | |||
Outstanding | 5 years 4 months 24 days | 5 years 6 months | |
Outstanding, Aggregate Intrinsic Value | $ 2,978 | $ 4,882 | |
Vested and Expected to Vest at June 30, 2020 | |||
Outstanding (in shares) | 1,442,306 | ||
Weighted Average Exercise Price (in dollars per share) | $ 7.81 | ||
Weighted Average Remaining Contractual Term (in Years) | 5 years 6 months | ||
Aggregate Intrinsic Value (in thousands) | $ 2,978 | ||
Exercisable at June 30, 2020 | |||
Exercisable (in shares) | 1,015,542 | ||
Exercisable, Weighted Average Exercise Price (in dollars per share) | $ 7.16 | ||
Exercisable, Weighted Average Remaining Contractual Term (in Years) | 4 years 2 months 12 days | ||
Aggregate Intrinsic Value (in thousands) | $ 2,876 |
Stockholders' Equity - RSU Acti
Stockholders' Equity - RSU Activity (Details) - RSUs | 9 Months Ended |
Jun. 30, 2020$ / sharesshares | |
Number of Shares | |
Outstanding at September 30, 2019 (in shares) | shares | 2,352,487 |
Granted (in shares) | shares | 1,346,405 |
Settled (in shares) | shares | (676,473) |
Canceled (in shares) | shares | (221,435) |
Outstanding at June 30, 2020 (in shares) | shares | 2,800,984 |
Weighted-Average Fair Market Value Per Share | |
Outstanding at September 30, 2019 (in dollars per share) | $ / shares | $ 8.26 |
Granted (in dollars per share) | $ / shares | 7.20 |
Settled (in dollars per share) | $ / shares | 7.66 |
Canceled (in dollars per share) | $ / shares | 8.37 |
Outstanding at June 30, 2020 (in dollars per share) | $ / shares | $ 7.89 |
Stockholders' Equity - Performa
Stockholders' Equity - Performance RSU Activity (Details) - Performance RSUs | 9 Months Ended |
Jun. 30, 2020$ / sharesshares | |
Number of Shares | |
Outstanding at September 30, 2019 (in shares) | shares | 1,722,551 |
Granted (in shares) | shares | 353,556 |
Settled (in shares) | shares | 0 |
Canceled (in shares) | shares | (1,722,551) |
Outstanding at June 30, 2020 (in shares) | shares | 353,556 |
Weighted-Average Fair Market Value Per Share | |
Outstanding at September 30, 2019 (in dollars per share) | $ / shares | $ 7.76 |
Granted (in dollars per share) | $ / shares | 6.06 |
Settled (in dollars per share) | $ / shares | 0 |
Canceled (in dollars per share) | $ / shares | 7.76 |
Outstanding at June 30, 2020 (in dollars per share) | $ / shares | $ 6.06 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | ||||
Income tax provision (benefit) | $ 231 | $ (2,712) | $ 460 | $ (4,861) |
Effective tax rate | 14.00% | 55.00% |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) ft² in Thousands, € in Millions | Apr. 28, 2020patent | Jan. 10, 2020USD ($)patent | Nov. 06, 2019USD ($)patent | Jul. 31, 2019patent | Aug. 17, 2018patent | Jul. 07, 2018patent | Jun. 11, 2018USD ($) | Jun. 11, 2018EUR (€) | May 03, 2018USD ($) | Jun. 12, 2020petition | Jun. 30, 2020USD ($)ft²patent | Oct. 01, 2019USD ($) |
Loss Contingencies [Line Items] | ||||||||||||
Weighted average remaining lease term of operating leases | 4 years 6 months | |||||||||||
Weighted average discount rate of operating leases | 4.70% | |||||||||||
Right-of-use assets | $ 5,683,000 | $ 6,800,000 | ||||||||||
Operating lease liabilities | 7,325,000 | $ 8,200,000 | ||||||||||
Lease liabilities, current portion | 1,651,000 | |||||||||||
Lease liabilities, non-current portion | 5,674,000 | |||||||||||
Operating lease costs | 600,000 | |||||||||||
Operating cash flows for operating leases paid | $ 1,300,000 | |||||||||||
Minimum | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Remaining operating lease term | 2 years | |||||||||||
Maximum | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Remaining operating lease term | 8 years | |||||||||||
Line of Credit | Revolving Credit Facility | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Maximum borrowing capacity | $ 10,000,000 | |||||||||||
Interest rate floor | 4.50% | |||||||||||
Minimum unrestricted cash and unused borrowing capacity | $ 15,000,000 | |||||||||||
Adjusted quick ratio requirement | 1.75 | |||||||||||
Borrowings outstanding | $ 0 | |||||||||||
Line of Credit | Revolving Credit Facility | Prime Rate | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Basis spread on variable rate | 0.25% | |||||||||||
Building | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Office space subject to the lease | ft² | 29 | |||||||||||
Pending Litigation | General and administrative | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Legal fees | $ 2,000,000 | |||||||||||
Pending Litigation | UrbanFT | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Estimate of future contingency liability accrual | 0 | |||||||||||
Number of patents allegedly infringed | patent | 2 | 5 | ||||||||||
Number of patents infringed | patent | 2 | |||||||||||
Number of invalid patents | patent | 2 | |||||||||||
Pending Litigation | Global Equity & Corporate Consulting, S.L. | ICAR | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Contingency amount claimed | $ 900,000 | € 0.8 | ||||||||||
Estimate of future contingency liability accrual | 0 | |||||||||||
Pending Litigation | USAA | Wells Fargo | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Estimate of future contingency liability accrual | $ 0 | |||||||||||
Number of patents allegedly infringed | patent | 2 | 5 | 4 | 3 | ||||||||
Number of patents infringed | patent | 1 | 1 | ||||||||||
Amount awarded in damages to other party | $ 102,000,000 | $ 200,000,000 | ||||||||||
Number of patents dropped from litigation | patent | 2 | |||||||||||
Number of invalid patents | patent | 1 | |||||||||||
Number of petitions filed | petition | 4 |
Commitments and Contingencies_2
Commitments and Contingencies - Maturity of Operating Lease Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Oct. 01, 2019 |
Commitments and Contingencies Disclosure [Abstract] | ||
2020—remaining | $ 355 | |
2021 | 2,068 | |
2022 | 1,707 | |
2023 | 1,709 | |
2024 | 1,378 | |
2025 | 290 | |
Thereafter | 644 | |
Total lease payments | 8,151 | |
Less: amount representing interest | (826) | |
Present value of future lease payments | $ 7,325 | $ 8,200 |
Commitments and Contingencies_3
Commitments and Contingencies - Future Minimum Operating Lease Payments Under ASC 840 (Details) $ in Thousands | Sep. 30, 2019USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2020 | $ 1,641 |
2021 | 2,157 |
2022 | 1,777 |
2023 | 1,550 |
2024 | 1,151 |
2025 | 36 |
Thereafter | 0 |
Total minimum lease payments | $ 8,312 |
Revenue Concentration (Details)
Revenue Concentration (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Sep. 30, 2019 | |
Revenue, Major Customer [Line Items] | |||||
Revenue | $ 25,413 | $ 21,906 | $ 70,672 | $ 59,572 | |
Accounts receivable, net | $ 12,943 | 12,943 | $ 14,938 | ||
Customer Concentration Risk | Sales Revenue Net | |||||
Revenue, Major Customer [Line Items] | |||||
Total revenue, percentage | 640000000.00% | 610000000.00% | |||
Customer Concentration Risk | Accounts Receivable | |||||
Revenue, Major Customer [Line Items] | |||||
Accounts receivable, net | $ 4,200 | $ 5,500 | 4,200 | 5,500 | |
Customer Concentration Risk | Customer One | Sales Revenue Net | |||||
Revenue, Major Customer [Line Items] | |||||
Revenue | $ 10,800 | $ 10,500 | |||
Total revenue, percentage | 15.00% | 16.00% | 15.00% | 18.00% | |
Customer Concentration Risk | Customer Two | Sales Revenue Net | |||||
Revenue, Major Customer [Line Items] | |||||
Total revenue, percentage | 11.00% | 11.00% | |||
Geographic Concentration Risk | Sales Revenue Net | International | |||||
Revenue, Major Customer [Line Items] | |||||
Total revenue, percentage | 25.00% | 28.00% | 25.00% | 33.00% | |
Geographic Concentration Risk | Long-term Assets | International | |||||
Revenue, Major Customer [Line Items] | |||||
Total revenue, percentage | 63.00% | 68.00% | |||
Geographic Concentration Risk | Long-term Assets, Excluding Goodwill and Other Intangibles | International | |||||
Revenue, Major Customer [Line Items] | |||||
Total revenue, percentage | 14.00% | 12.00% |