Cover
Cover - shares | 3 Months Ended | |
Dec. 31, 2020 | Jan. 31, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Dec. 31, 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 $0.001 per share | |
Trading Symbol | MITK | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 42,687,378 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q1 | |
Entity Central Index Key | 0000807863 | |
Current Fiscal Year End Date | --09-30 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2020 | Sep. 30, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 26,723 | $ 19,986 |
Short-term investments | 40,238 | 40,035 |
Accounts receivable, net | 12,714 | 15,612 |
Contract assets | 4,465 | 5,187 |
Prepaid expenses | 1,473 | 1,338 |
Other current assets | 1,838 | 1,968 |
Total current assets | 87,451 | 84,126 |
Long-term investments | 5,597 | 1,963 |
Property and equipment, net | 3,674 | 3,610 |
Right-of-use assets | 5,122 | 5,407 |
Intangible assets, net | 18,423 | 19,289 |
Goodwill | 37,323 | 35,669 |
Deferred income tax assets, net | 14,211 | 13,484 |
Other non-current assets | 5,231 | 5,606 |
Total assets | 177,032 | 169,154 |
Current liabilities: | ||
Accounts payable | 3,472 | 3,909 |
Accrued payroll and related taxes | 6,467 | 8,882 |
Deferred revenue, current portion | 9,742 | 7,973 |
Lease liabilities, current portion | 1,751 | 1,819 |
Acquisition-related contingent consideration | 790 | 753 |
Other current liabilities | 940 | 1,020 |
Total current liabilities | 23,162 | 24,356 |
Deferred revenue, non-current portion | 1,154 | 1,597 |
Lease liabilities, non-current portion | 5,018 | 5,327 |
Deferred income tax liabilities | 4,924 | 4,649 |
Other non-current liabilities | 1,021 | 982 |
Total liabilities | 35,279 | 36,911 |
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, 42,668,376 and 41,779,853 issued and outstanding, as of December 31, 2020 and September 30, 2020, respectively | 43 | 42 |
Additional paid-in capital | 151,153 | 146,518 |
Accumulated other comprehensive income (loss) | 2,384 | (323) |
Accumulated deficit | (11,827) | (13,994) |
Total stockholders’ equity | 141,753 | 132,243 |
Total liabilities and stockholders’ equity | $ 177,032 | $ 169,154 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2020 | Sep. 30, 2020 |
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) | 42,668,376 | 41,779,853 |
Common stock, shares outstanding (in shares) | 42,668,376 | 41,779,853 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE INCOME - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Total revenue | $ 25,976 | $ 22,067 |
Operating costs and expenses | ||
Selling and marketing | 7,385 | 6,648 |
Research and development | 6,165 | 5,292 |
General and administrative | 5,058 | 5,288 |
Acquisition-related costs and expenses | 1,693 | 1,608 |
Total operating costs and expenses | 24,439 | 21,769 |
Operating income | 1,537 | 298 |
Other income, net | 96 | 303 |
Income before income taxes | 1,633 | 601 |
Income tax benefit (provision) | 534 | (41) |
Net income | $ 2,167 | $ 560 |
Net income per share – basic (in dollars per share) | $ 0.05 | $ 0.01 |
Net income per share - diluted (in dollars per share) | $ 0.05 | $ 0.01 |
Shares used in calculating net income per share – basic (in shares) | 42,476 | 40,615 |
Shares used in calculating net income per share – diluted (in shares) | 43,897 | 41,828 |
Other comprehensive income | ||
Net income | $ 2,167 | $ 560 |
Foreign currency translation adjustment | 2,760 | 1,253 |
Unrealized gain (loss) on investments | (53) | 2 |
Other comprehensive income | 4,874 | 1,815 |
Software and hardware | ||
Total revenue | 12,303 | 11,515 |
Operating costs and expenses | ||
Cost of revenue | 1,245 | 771 |
Services and other | ||
Total revenue | 13,673 | 10,552 |
Operating costs and expenses | ||
Cost of revenue | $ 2,893 | $ 2,162 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss) |
Beginning Balance (in shares) at Sep. 30, 2019 | 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) | 24,000 | ||||
Exercise of stock options | 73 | 73 | |||
Settlement of restricted stock units (in shares) | 474,000 | ||||
Settlement of restricted stock units | 0 | $ 1 | (1) | ||
Stock-based compensation expense | 2,303 | 2,303 | |||
Components of other comprehensive loss: | |||||
Net income | 560 | 560 | |||
Foreign currency translation adjustment | 1,253 | 1,253 | |||
Unrealized gain (loss) on investments | 2 | 2 | |||
Other comprehensive income | 1,815 | ||||
Ending Balance (in shares) at Dec. 31, 2019 | 40,865,000 | ||||
Ending Balance at Dec. 31, 2019 | $ 111,524 | $ 41 | 134,535 | (20,246) | (2,806) |
Beginning Balance (in shares) at Sep. 30, 2020 | 41,779,853 | 41,780,000 | |||
Beginning Balance at Sep. 30, 2020 | $ 132,243 | $ 42 | 146,518 | (13,994) | (323) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Exercise of stock options (in shares) | 241,490 | 241,000 | |||
Exercise of stock options | $ 1,889 | 1,889 | |||
Settlement of restricted stock units (in shares) | 647,000 | ||||
Settlement of restricted stock units | 0 | $ 1 | (1) | ||
Stock-based compensation expense | 2,747 | 2,747 | |||
Components of other comprehensive loss: | |||||
Net income | 2,167 | 2,167 | |||
Foreign currency translation adjustment | 2,760 | 2,760 | |||
Unrealized gain (loss) on investments | (53) | (53) | |||
Other comprehensive income | $ 4,874 | ||||
Ending Balance (in shares) at Dec. 31, 2020 | 42,668,376 | 42,668,000 | |||
Ending Balance at Dec. 31, 2020 | $ 141,753 | $ 43 | $ 151,153 | $ (11,827) | $ 2,384 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Operating activities: | ||
Net income | $ 2,167 | $ 560 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Stock-based compensation expense | 2,747 | 2,303 |
Amortization of intangible assets | 1,693 | 1,608 |
Depreciation and amortization | 390 | 406 |
Amortization of investment premiums and other | 72 | (38) |
Deferred taxes | (669) | 66 |
Changes in assets and liabilities: | ||
Accounts receivable | 3,084 | 2,179 |
Contract assets | 1,529 | (1,759) |
Other assets | (342) | (226) |
Accounts payable | (501) | 677 |
Accrued payroll and related taxes | (2,514) | (1,895) |
Deferred revenue | 1,273 | 2,427 |
Restructuring accrual | 0 | (923) |
Other liabilities | (199) | (195) |
Net cash provided by operating activities | 8,730 | 5,190 |
Investing activities: | ||
Purchases of investments | (12,111) | (10,132) |
Sales and maturities of investments | 8,141 | 3,150 |
Purchases of property and equipment | (400) | (205) |
Net cash used in investing activities | (4,370) | (7,187) |
Financing activities: | ||
Proceeds from the issuance of equity plan common stock | 1,889 | 73 |
Principal payments on other borrowings | (18) | (78) |
Net cash provided by (used in) financing activities | 1,871 | (5) |
Foreign currency effect on cash and cash equivalents | 506 | 47 |
Net increase (decrease) in cash and cash equivalents | 6,737 | (1,955) |
Cash and cash equivalents at beginning of period | 19,986 | 16,748 |
Cash and cash equivalents at end of period | 26,723 | 14,793 |
Supplemental disclosures of cash flow information: | ||
Cash paid for income taxes | 149 | 0 |
Supplemental disclosures of non-cash investing and financing activities: | ||
Unrealized holding gain (loss) on available for sale investments | $ (53) | $ 2 |
Nature of Operations and Summar
Nature of Operations and Summary of Significant Accounting Policies | 3 Months Ended |
Dec. 31, 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 December 31, 2020, the Company has been granted 69 patents and it has an additional 17 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 December 31, 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, 2020, filed with the U.S. Securities and Exchange Commission on December 7, 2020, as amended by Amendment No. 1 to the Annual Report on Form 10-K/A (the “Form 10-K”), filed with the SEC on December 11, 2020. Results for the three months ended December 31, 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 income (loss) in the consolidated balance sheets. The Company recorded a net gain resulting from foreign exchange translation of $2.8 million for the three months ended December 31, 2020 and a net gain resulting from foreign exchange translation of $1.3 million for the three months ended December 31, 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. Reclassifications Certain reclassifications have been made to prior year presentation to conform to the current year presentation. Prior to fiscal 2020, the Company had included its product management costs in selling and marketing expenses. Due to certain personnel and functional responsibility changes in this function, the Company has reclassified these costs to research and development expenses. To conform to the current period’s presentation, prior year’s financials have been reclassified accordingly. The Company has determined that this reclassification was not material to previously reported financial statements. Product management costs were $0.7 million for three months ended December 31, 2019. 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 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 Per Share The Company calculates net income per share in accordance with FASB ASC Topic 260, Earnings per Share . Basic net income per share is based on the weighted-average number of common shares outstanding during the period. Diluted net income 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 months ended December 31, 2020 and 2019, the following potentially dilutive common shares were excluded from the calculation of net income per share, as they would have been antidilutive ( amounts in thousands ): Three Months Ended December 31, 2020 2019 Stock options 721 325 RSUs 1,253 1,482 ESPP common stock equivalents 66 70 Performance options 179 — Performance RSUs 74 — Total potentially dilutive common shares outstanding 2,293 1,877 The calculation of basic and diluted net income per share is as follows ( amounts in thousands, except per share data) : Three Months Ended December 31, 2020 2019 Net income $ 2,167 $ 560 Weighted-average shares outstanding—basic 42,476 40,615 Common stock equivalents 1,421 1,213 Weighted-average shares outstanding—diluted 43,897 41,828 Net income per share: Basic $ 0.05 $ 0.01 Diluted $ 0.05 $ 0.01 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 income (loss), a component of stockholders’ equity. The Company evaluates its investments to assess whether those with unrealized loss positions are other-than-temporarily impaired. Impairments are considered to be other-than-temporary if they are related to deterioration in credit risk or if it is likely that the Company will sell the securities before the recovery of its cost basis. Realized gains and losses and declines in value judged to be other-than-temporary are determined based on the specific identification method and are reported in other income, net in the consolidated statements of operations and other comprehensive income. No other-than-temporary impairment charges were recognized in the three months ended December 31, 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 $1,000 of write-offs to the allowance for doubtful accounts for the three months ended December 31, 2020 and no write-offs in the three months ended December 31, 2019. The Company maintained an allowance for doubtful accounts of $0.2 million as of both December 31, 2020 and September 30, 2020. 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 three months ended December 31, 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 three months ended December 31, 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 $0.2 million and $23,000 of costs related to computer software developed for internal use during the three months ended December 31, 2020 and 2019, respectively. The Company had $0.1 million in amortization expense from internal use software during each of the three months ended December 31, 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 2020, 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 three months ended December 31, 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 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 6 of the consolidated financial statements for additional details. The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the tax authorities, based on the technical merits of the position. The tax benefit is measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. The Company recognizes interest and penalties related to income tax matters in income tax expense. See Note 6 of the consolidated financial statements for additional details. Stock-Based Compensation The Company issues RSUs, stock options, performance options, and 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 Comprehensive income consists of net income, unrealized gains and losses on available-for-sale securities, and foreign currency translation adjustments. Included on the consolidated balance sheets is accumulated other comprehensive income (loss) of $2.4 million and $(0.3) million at December 31, 2020 and September 30, 2020, respectively. Recently Adopted Accounting Pronouncements In August 2018, the FASB issued ASU No. 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (ASC 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (“ASU 2018-15”), which requires hosting arrangements that are service contracts to follow the guidance for internal-use software to determine which implementation costs can be capitalized. The Company adopted ASU 2018-15 in the first quarter of fiscal 2021, and the adoption did not 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 Company adopted ASU 2018-13 in the first quarter of fiscal 2021, and the adoption did not 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. The Company adopted ASU 2017-04 in the first quarter of fiscal 2021, and the adoption did not have a material impact on its consolidated financial statements. Change in Significant Accounting Policy The Company has consistently applied the accounting policies to all periods presented in its consolidated financial statements. 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. No other new accounting pronouncement issued or effective during the three months ended December 31, 2020 had, or is expected to have, a material impact on the Company’s consolidated financial statements. |
Revenue Recognition
Revenue Recognition | 3 Months Ended |
Dec. 31, 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 December 31, 2020 2019 Major product category Deposits software and hardware $ 10,755 $ 10,283 Deposits services and other 4,861 4,368 Deposits revenue 15,616 14,651 Identity verification software and hardware 1,548 1,232 Identity verification services and other 8,812 6,184 Identity verification revenue 10,360 7,416 Total revenue $ 25,976 $ 22,067 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 ): December 31, 2020 September 30, 2020 Contract assets, current $ 4,465 $ 5,187 Contract assets, non-current 3,671 4,468 Contract liabilities (deferred revenue), current 9,742 7,973 Contract liabilities (deferred revenue), non-current 1,154 1,597 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 $4.9 million and $3.6 million of revenue during the three months ended December 31, 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 $1.9 million and $1.5 million as of December 31, 2020 and September 30, 2020, 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 and totaled $0.2 million during both the three months ended December 31, 2020 and 2019, respectively. There were no impairment losses recognized during both the three months ended December 31, 2020 and 2019 related to capitalized contract costs. |
Investments
Investments | 3 Months Ended |
Dec. 31, 2020 | |
Investments, Debt and Equity Securities [Abstract] | |
INVESTMENTS | 3. INVESTMENTS The following tables summarize investments by type of security as of December 31, 2020 and September 30, 2020, respectively (amounts shown in thousands): December 31, 2020: Cost Gross Unrealized Gains Gross Unrealized Losses Fair Market Value Available-for-sale securities: U.S. Treasury, short-term $ 9,557 $ 14 $ — $ 9,571 Asset-backed securities, short-term 3,914 21 — 3,935 Corporate debt securities, short-term 26,713 20 (1) 26,732 U.S. Treasury, long-term 2,745 — — 2,745 Asset-backed securities, long-term 962 — — 962 Corporate debt securities, long-term 1,890 — — 1,890 Total $ 45,781 $ 55 $ (1) $ 45,835 September 30, 2020: Cost Gross Unrealized Gains Gross Unrealized Losses Fair Market Value Available-for-sale securities: U.S. Treasury, short-term $ 10,245 $ 38 $ — $ 10,283 Asset-backed securities, short-term 4,723 36 — 4,759 Corporate debt securities, short-term 24,956 37 — 24,993 Corporate debt securities, long-term 1,966 — (3) 1,963 Total $ 41,890 $ 111 $ (3) $ 41,998 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. 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 December 31, 2020 and September 30, 2020, 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 months ended December 31, 2020 and 2019. There were no realized gains or losses from the sale of available-for-sale securities during the three months ended December 31, 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 December 31, 2020 and September 30, 2020, respectively (amounts shown in thousands) : December 31, 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 $ 9,571 $ 9,571 $ — $ — Asset-backed securities 3,935 — 3,935 — Corporate debt securities Financial 6,387 6,387 — Industrial 1,913 1,913 — Commercial paper Financial 12,488 12,488 — Industrial 5,944 5,944 — Total short-term investments at fair value 40,238 9,571 30,667 — Long-term investments: U.S. Treasury 2,745 2,745 — — Asset-backed securities 962 — 962 — Corporate debt securities Financial — — Industrial 1,890 1,890 Total assets at fair value $ 45,835 $ 12,316 $ 33,519 $ — Liabilities: Acquisition-related contingent consideration 790 — — 790 Total liabilities at fair value $ 790 $ — $ — $ 790 September 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 $ 10,283 $ 10,283 $ — $ — Asset-backed securities, short-term $ 4,759 — 4,759 — Corporate debt securities Financial 7,695 — 7,695 — Industrial 1,924 — 1,924 — Commercial paper Financial 13,479 — 13,479 — Industrial 1,895 — 1,895 — Total short-term investments at fair value 40,035 10,283 29,752 — Long-term investments: U.S. Treasury — — — — Corporate debt securities Financial 977 — 977 — Industrial 986 — 986 — Total assets at fair value $ 41,998 $ 10,283 $ 31,715 $ — Liabilities: Acquisition-related contingent consideration 753 — — 753 Total liabilities at fair value $ 753 $ — $ — $ 753 As of December 31, 2020, total acquisition-related contingent consideration of $0.8 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 three months ended December 31, 2020 (amounts shown in thousands) : Balance at September 30, 2020 $ 753 Foreign currency effect on contingent consideration 37 Balance at December 31, 2020 $ 790 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 3 Months Ended |
Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | 4. GOODWILL AND INTANGIBLE ASSETS Goodwill The Company had a goodwill balance of $37.3 million at December 31, 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 three months ended December 31, 2020 (amounts shown in thousands) : Balance at September 30, 2020 $ 35,669 Foreign currency effect on goodwill 1,654 Balance at December 31, 2020 $ 37,323 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): December 31, 2020: Weighted Average Amortization Period Cost Accumulated Amortization Net Completed technologies 6.4 years $ 20,341 $ 9,736 $ 10,605 Customer relationships 4.8 years 17,628 9,928 7,700 Trade names 4.5 years 618 500 118 Total intangible assets $ 38,587 $ 20,164 $ 18,423 September 30, 2020: Weighted Average Amortization Period Cost Accumulated Amortization Net Completed technologies 6.4 years $ 20,341 $ 9,416 $ 10,925 Customer relationships 4.8 years 17,628 9,390 8,238 Trade names 4.5 years 618 492 126 Total intangible assets $ 38,587 $ 19,298 $ 19,289 Amortization expense related to acquired intangible assets was $1.7 million and $1.6 million for the three months ended December 31, 2020 and 2019, respectively, and is recorded within acquisition-related costs and expenses on the consolidated statements of operations and other comprehensive income. 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 2021—remaining $ 4,935 2022 6,209 2023 4,075 2024 1,947 2025 1,257 Total $ 18,423 |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
STOCKHOLDERS' EQUITY | 5. 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 December 31, 2020 2019 Cost of revenue $ 87 $ 61 Selling and marketing 788 572 Research and development 740 674 General and administrative 1,132 996 Stock-based compensation expense included in expenses $ 2,747 $ 2,303 As of December 31, 2020, the Company had $25.0 million of unrecognized compensation expense related to outstanding stock options and RSUs expected to be recognized over a weighted-average period of approximately 2.7 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 December 31, 2020, (i) 975,746 RSUs and 638,321 Performance RSUs were outstanding under the 2020 Plan, and 2,719,465 shares of Common Stock were reserved for future grants under the 2020 Plan and (ii) stock options to purchase an aggregate of 611,226 shares of Common Stock and 1,264,921 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 December 31, 2020, (i) 350,674 shares have been issued to participants pursuant to the ESPP and (ii) 649,326 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 December 31, 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 December 31, 2020, (i) 327,946 RSUs were outstanding under the Director Plan and (ii) 267,533 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 three months ended December 31, 2020: Number of Shares Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term (in Years) Aggregate Intrinsic Value ( in thousands ) Outstanding at September 30, 2020 1,162,505 $ 7.51 6.1 $ 6,081 Granted — $ — Exercised (241,490) $ 7.82 Canceled — $ — Outstanding at December 31, 2020 921,015 $ 7.43 6.2 $ 9,536 Vested and Expected to Vest at December 31, 2020 921,015 $ 7.43 6.2 $ 9,536 Exercisable at December 31, 2020 585,487 $ 6.25 5.1 $ 6,750 The Company recognized $0.2 million in stock-based compensation expense related to outstanding stock options in each of the three months ended December 31, 2020 and 2019. As of December 31, 2020, the Company had $1.4 million of unrecognized compensation expense related to outstanding stock options expected to be recognized over a weighted-average period of approximately 2.3 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 three months ended December 31, 2020 and 2019 was $1.5 million and $0.1 million, respectively. Restricted Stock Units The following table summarizes RSU activity under the Company’s equity plans during the three months ended December 31, 2020: Number of Shares Weighted-Average Fair Market Value Per Share Outstanding at September 30, 2020 2,661,943 $ 7.95 Granted 647,052 $ 11.92 Settled (647,035) $ 7.32 Canceled (34,135) $ 8.39 Outstanding at December 31, 2020 2,627,825 $ 9.07 The cost of RSUs is determined using the fair value of Common Stock on the award date, and the compensation expense is recognized ratably over the vesting period. The Company recognized $1.9 million and $1.7 million in stock-based compensation expense related to outstanding RSUs in the three months ended December 31, 2020 and 2019, respectively. As of December 31, 2020, the Company had $19.2 million of unrecognized compensation expense related to outstanding RSUs expected to be recognized over a weighted-average period of approximately 2.8 years. Performance Restricted Stock Units The following table summarizes Performance RSU activity under the Company’s equity plans during the three months ended December 31, 2020: Number of Shares Weighted-Average Fair Market Value Per Share Outstanding at September 30, 2020 353,556 $ 6.06 Granted 284,765 $ 11.84 Settled — $ — Canceled — $ — Outstanding at December 31, 2020 638,321 $ 8.64 The Company recognized $0.3 million and $0.2 million in stock-based compensation expense related to outstanding Performance RSUs in each of the three months ended December 31, 2020 and 2019, respectively. As of December 31, 2020, the Company had $3.6 million of unrecognized compensation expense related to outstanding RSUs expected to be recognized over a weighted-average period of approximately 2.8 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 December 31, 2020 and 2019, respectively. As of December 31, 2020, the Company had $0.7 million of unrecognized compensation expense related to outstanding Performance Options expected to be recognized over a weighted-average period of approximately 0.8 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 our Common Stock. The share repurchase program expired on December 16, 2020. Total purchases made under the share repurchase program were $1.0 million or approximately 137,000 shares at an average price of $7.33. The purchases under the share repurchase program were made through open market trades. 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 | 3 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | 6. 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 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 three months ended December 31, 2020, the Company recorded an income tax benefit of $0.5 million, which yielded an effective tax rate of negative 33%. For the three months ended December 31, 2019, the Company recorded an income tax provision of $41,000, which yielded an effective tax rate of 7%. The difference between the U.S. federal statutory tax rate and the Company’s effective tax rate for the three months ended December 31, 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 | 3 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 7. 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 one 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 December 31, 2020, the Company had operating ROU assets of $5.1 million. Total operating lease liabilities of $6.8 million were comprised of current lease liabilities of $1.8 million and non-current lease liabilities of $5.0 million. The Company recognized $0.5 million of operating lease costs in the three months ended December 31, 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. The Company paid $0.7 million in operating cash flows for operating leases in the three months ended December 31, 2020. Maturities of our operating lease liabilities as of December 31, 2020 were as follows (amounts shown in thousands) : Operating leases 2021—remaining $ 1,571 2022 1,737 2023 1,735 2024 1,399 2025 314 2026 310 Thereafter 395 Total lease payments 7,461 Less: amount representing interest (692) Present value of future lease payments $ 6,769 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 but has been delayed as a consequence of the COVID-19 pandemic. 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. Third Party Claims Against Our Customers The Company receives indemnification demands from end-user customers who received third party patentee offers to license patents and allegations of patent infringement. Some of the offers and allegations have resulted in ongoing litigation. The Company is not a party to any such litigation. License offers to and infringement allegations against the Company’s end-customers were made by Lighthouse Consulting Group, LLC; Lupercal, LLC; Pebble Tide, LLC; Dominion Harbor Group, LLC; and IP Edge, LLC, which appear to be non-practicing entities (“NPEs”)—often called “patent trolls”—and not the Company’s competitors. These NPEs may seek to extract settlements from our end-customers, resulting in new or renewed indemnification demands to the Company. At this time, the Company does not believe it is obligated to indemnify any customers or end-customers resulting from license offers or patent infringement allegations by the companies listed above. However, the Company could incur substantial costs if it is determined that it is required to indemnify any customers or end-customers in connection with these offers or allegations. Given the potential for impact to other customers and the industry, the Company is actively monitoring the offers, allegations and any resulting litigation. On July 7, 2018, United Services Automobile Association (“USAA”) filed a lawsuit against Wells Fargo Bank, N.A. (“Wells Fargo”) in the Eastern District of Texas alleging that Wells Fargo’s remote deposit capture systems (which in part utilize technology provided by the Company to Wells Fargo through a partner) infringe four USAA owned patents related to mobile deposits (the “First Wells Lawsuit”). On August 17, 2018, USAA filed a second lawsuit (the “Second Wells Lawsuit” and together with the First Wells Lawsuit, the “Wells Lawsuits”) against Wells Fargo in the Eastern District of Texas asserting that an additional five patents owned by USAA were infringed by Wells Fargo’s remote deposit capture system. In neither lawsuit was the Company named in the Complaint as an infringer and at no time did USAA allege specifically that the Company’s products by themselves infringed any of the asserted patents. Subsequently, on November 6, 2019, a jury in the First Wells Lawsuit found that Wells Fargo willfully infringed at least one of the Subject Patents (as defined below) and awarded USAA $200 million in damages. In the Second Wells Lawsuit, USAA dropped two of the patents from the litigation, and the judge in the case found that one of the remaining three patents was invalid. On January 10, 2020, a jury in the Second Wells Lawsuit found that Wells Fargo willfully infringed at least one of the patents at issue in that case and awarded USAA $102 million in damages. No Mitek product was accused of infringing either of the two patents in question in the Second Wells Lawsuit as the litigation involved broad banking processes and not 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. Wells Fargo filed petitions for Inter Partes Review (“IPR”) with the Patent Trial and Appeal Board (“PTAB”) challenging the validity of the four patents in the First Wells Lawsuit. Three of those four petitions were instituted, while one (relating to the ‘090 Patent) was denied institution. On November 24, 2020 and January 26, 2021, the PTAB issued final written decisions determining that Wells Fargo had not demonstrated by a preponderance of the evidence that any claims of the ‘571 Patent, the ‘779 Patent, or ‘517 Patent were unpatentable. Wells Fargo can request rehearing of these decisions and/or appeal the decisions to the U.S. Court of Appeals for the Federal Circuit. On September 30, 2020, USAA filed suit against PNC Bank (the “PNC Lawsuit”) in the Eastern District of Texas alleging infringement of U.S. Patent Nos. 10,482,432 and 10,621,559. These two patents are continuations of an asserted patent in the Second Wells Lawsuit and relate to similar subject matter. On October 19, 2020, PNC Bank’s integration partner, NCR Corporation, sent an indemnification demand to the Company requesting indemnification from all claims related to the PNC Lawsuit. The complaint against PNC does not claim that any Company product infringes any of the asserted patents. At this time, the Company does not believe it is obligated to indemnify NCR Corporation or end-users of NCR Corporation resulting from the patent infringement allegations by USAA. On December 4, 2020, USAA filed an amended complaint against PNC Bank also asserting two patents at issue in the First Wells Lawsuit—U.S. Patent Nos. 8,699,779 (“the ’779 Patent”) and 8,977,571 (“the ’571 Patent”). Also on December 4, 2020, PNC Bank filed a complaint for declaratory judgement of non-infringement of the ’779 Patent and the ’571 Patent in the Western District of Pennsylvania. On January 19, 2021, USAA filed a motion to dismiss that action in view of the pending lawsuit between the parties in the Eastern District of Texas. While neither the Wells Lawsuits nor the PNC Lawsuit name the Company 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 the ’779 Patent, the ’571 Patent, U.S. Patent No. 9,336,517 (“the ’517 Patent”), and U.S. Patent No. 9,818,090 (“the ’090 Patent”) (collectively, the “Subject Patents”). On January 15, 2020, USAA filed motions requesting the dismissal of the declaratory judgement of the Subject Patents and transfer of the case to the Eastern District of Texas, both of which the Company opposed. On April 21, 2020, the court in the Northern District of California transferred Mitek’s declaratory judgement action to the Eastern District of Texas and did not rule on USAA’s motion to dismiss. On July 15, 2020, the court in the Eastern District of Texas held a hearing on USAA’s motion to dismiss, but has not yet issued a ruling. The Company continues to believe that its products do not infringe the Subject Patents and will vigorously defend the right of its end-users to use its technology. In April, May, and June 2020, the Company filed petitions for IPR with the PTAB of the U.S. Patent & Trademark Office challenging the validity of the Subject Patents. On November 6 and 17, 2020 and January 26, 2021, the PTAB decided to exercise its discretion and deny institution of the four petitions due to the alleged relationship between the Company and Wells Fargo, who previously filed petitions for IPR on the Subject Patents. The PTAB did not address the merits of the Company’s petitions or the prior art cited in those petitions. The Company continues to believe that the prior art cited in the petitions renders all the claims of the Subject Patents invalid. On December 6 and 17, 2020, the Company filed requests for rehearing and Precedential Opinion Panel (“POP”) review of three of the four denied IPR petitions. The Company is evaluating all of it options with respect to the remaining petition, including a request for rehearing and POP review. In September 2020, the Company filed an additional two petitions for IPR with the U.S. Patent & Trademark Office challenging the validity of U.S. Patent Nos. 10,013,681 and 10,013,605—two of the patents at issue in the Second Wells Lawsuit. Those petitions remain pending with institution decisions expected in March 2021. The Company incurred legal fees of $0.2 million in the three months ended December 31, 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. Claim Against UrbanFT, Inc. On July 31, 2019, the Company filed a lawsuit against one of its customers, UrbanFT, Inc. (“UrbanFT”) in the United States District Court for the Southern District of California (case No. 19-CV-1432-CAB-DEB). UrbanFT is delinquent in payment and attempted to justify its non-payment by asserting that the Company is or may be infringing on purported UrbanFT patents. The Company filed such lawsuit to collect the delinquent payments and to obtain a declaratory judgment of non-infringement of five purported UrbanFT patents. UrbanFT filed an answer and later asserted infringement of two of the five patents-at-issue in the Company’s lawsuit against UrbanFT. The Company thereafter filed counterclaims seeking a declaration that the two patents now asserted by UrbanFT are invalid in addition to being not infringed. During the course of the litigation, the Company learned that a judgment had been entered against UrbanFT’s affiliates and its predecessor owner in which an Oregon court ordered that the patents in issue revert to a prior owner, Mr. Stevens, because UrbanFT’s affiliates did not pay the purchase price owed to the prior owner. On September 8, 2020, the Company filed a motion for summary judgment on its breach of contract claim. On September 15, 2020, the district court issued an order to show cause regarding jurisdiction over patent issues in light of the Oregon judgment. On December 17, 2020, the district court dismissed Mitek’s claims for declaratory judgment of non-infringement and UrbanFT’s counterclaims for patent infringement and related affirmative defenses based on infringement of the patents for lack of subject matter jurisdiction because UrbanFT does not own the patents. The district court then dismissed the remaining state law claims without prejudice to refiling in state court. On December 18, 2020, the Company filed a new suit against UrbanFT in the Superior Court of the State of California, County of San Diego (case no. 37-2020-00046670-CU-BC-CTL) asserting claims for breach of contract, open book account, and monetary damages. UrbanFT filed an answer and has not asserted any cross-claims as of now. We intend to vigorously pursue our claims and defend any cross-claims if any are filed at a later date. 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 | 3 Months Ended |
Dec. 31, 2020 | |
Risks and Uncertainties [Abstract] | |
REVENUE CONCENTRATION | 8. REVENUE CONCENTRATION For the three months ended December 31, 2020, the Company derived revenue of $3.9 million from one customer, with such customer accounting for 15% of the Company’s total revenue. For the three months ended December 31, 2019, the Company derived revenue of $8.1 million from two customers, with such customers accounting for 20% and 17% of the Company’s total revenue, respectively. The corresponding accounts receivable balances of customers from which revenues were in excess of 10% of total revenue were $0.1 million and $4.4 million at December 31, 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 31% and 25% of the Company’s total revenue for the three months ended December 31, 2020 and 2019, respectively. From a geographic perspective, approximately 64% and 66% of the Company’s total long-term assets as of December 31, 2020 and September 30, 2020, respectively, are associated with the Company’s international subsidiaries. From a geographic perspective, approximately 15% of the Company’s total long-term assets excluding goodwill and |
Nature of Operations and Summ_2
Nature of Operations and Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Dec. 31, 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 December 31, 2020, the Company has been granted 69 patents and it has an additional 17 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 December 31, 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, 2020, filed with the U.S. Securities and Exchange Commission on December 7, 2020, as amended by Amendment No. 1 to the Annual Report on Form 10-K/A (the “Form 10-K”), filed with the SEC on December 11, 2020. Results for the three months ended December 31, 2020 are not necessarily indicative of results for any other interim period or for a full fiscal year. |
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 income (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. |
Reclassifications | Reclassifications Certain reclassifications have been made to prior year presentation to conform to the current year presentation. Prior to fiscal 2020, the Company had included its product management costs in selling and marketing expenses. Due to certain personnel and functional responsibility changes in this function, the Company has reclassified these costs to research and development expenses. To conform to the current period’s presentation, prior year’s financials have been reclassified accordingly. The Company has determined that this reclassification was not material to previously reported financial statements. Product management costs were $0.7 million for three months ended December 31, 2019. |
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 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. 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. |
Net Income Per Share | Net Income Per Share The Company calculates net income per share in accordance with FASB ASC Topic 260, Earnings per Share . Basic net income per share is based on the weighted-average number of common shares outstanding during the period. Diluted net income 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 income (loss), a component of stockholders’ equity. The Company evaluates its investments to assess whether those with unrealized loss positions are other-than-temporarily impaired. Impairments are considered to be other-than-temporary if they are related to deterioration in credit risk or if it is likely that the Company will sell the securities before the recovery of its cost basis. Realized gains and losses and declines in value judged to be other-than-temporary are determined based on the specific identification method and are reported in other income, net in the consolidated statements of operations and other comprehensive income. No other-than-temporary impairment charges were recognized in the three months ended December 31, 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 three months ended December 31, 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 three months ended December 31, 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 2020, 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 6 of the consolidated financial statements for additional details. The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the tax authorities, based on the technical merits of the position. The tax benefit is measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. The Company recognizes interest and penalties related to income tax matters in income tax expense. See Note 6 of the consolidated financial statements for additional details. |
Stock-Based Compensation | Stock-Based Compensation The Company issues RSUs, stock options, performance options, and 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 | Comprehensive Income Comprehensive income consists of net income, unrealized gains and losses on available-for-sale securities, and foreign currency translation adjustments. |
Recently Adopted Accounting Pronouncements, Change in Significant Accounting Policy and Recently Issued Accounting Pronouncements | Recently Adopted Accounting Pronouncements In August 2018, the FASB issued ASU No. 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (ASC 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (“ASU 2018-15”), which requires hosting arrangements that are service contracts to follow the guidance for internal-use software to determine which implementation costs can be capitalized. The Company adopted ASU 2018-15 in the first quarter of fiscal 2021, and the adoption did not 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 Company adopted ASU 2018-13 in the first quarter of fiscal 2021, and the adoption did not 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. The Company adopted ASU 2017-04 in the first quarter of fiscal 2021, and the adoption did not have a material impact on its consolidated financial statements. Change in Significant Accounting Policy The Company has consistently applied the accounting policies to all periods presented in its consolidated financial statements. 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. No other new accounting pronouncement issued or effective during the three months ended December 31, 2020 had, or is expected to have, a material impact on the Company’s consolidated financial statements. |
Fair Value Measurements and Disclosures | 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. |
Nature of Operations and Summ_3
Nature of Operations and Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Schedule of Potentially Dilutive Common Shares Excluded from Calculation of Net Income per Share | For the three months ended December 31, 2020 and 2019, the following potentially dilutive common shares were excluded from the calculation of net income per share, as they would have been antidilutive ( amounts in thousands ): Three Months Ended December 31, 2020 2019 Stock options 721 325 RSUs 1,253 1,482 ESPP common stock equivalents 66 70 Performance options 179 — Performance RSUs 74 — Total potentially dilutive common shares outstanding 2,293 1,877 |
Schedule of Calculation of Basic and Diluted Net Income Per Share | The calculation of basic and diluted net income per share is as follows ( amounts in thousands, except per share data) : Three Months Ended December 31, 2020 2019 Net income $ 2,167 $ 560 Weighted-average shares outstanding—basic 42,476 40,615 Common stock equivalents 1,421 1,213 Weighted-average shares outstanding—diluted 43,897 41,828 Net income per share: Basic $ 0.05 $ 0.01 Diluted $ 0.05 $ 0.01 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 3 Months Ended |
Dec. 31, 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 December 31, 2020 2019 Major product category Deposits software and hardware $ 10,755 $ 10,283 Deposits services and other 4,861 4,368 Deposits revenue 15,616 14,651 Identity verification software and hardware 1,548 1,232 Identity verification services and other 8,812 6,184 Identity verification revenue 10,360 7,416 Total revenue $ 25,976 $ 22,067 |
Schedule of Contract Balances | The following table provides information about contract assets and contract liabilities from contracts with customers ( amounts in thousands ): December 31, 2020 September 30, 2020 Contract assets, current $ 4,465 $ 5,187 Contract assets, non-current 3,671 4,468 Contract liabilities (deferred revenue), current 9,742 7,973 Contract liabilities (deferred revenue), non-current 1,154 1,597 |
Investments (Tables)
Investments (Tables) | 3 Months Ended |
Dec. 31, 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 December 31, 2020 and September 30, 2020, respectively (amounts shown in thousands): December 31, 2020: Cost Gross Unrealized Gains Gross Unrealized Losses Fair Market Value Available-for-sale securities: U.S. Treasury, short-term $ 9,557 $ 14 $ — $ 9,571 Asset-backed securities, short-term 3,914 21 — 3,935 Corporate debt securities, short-term 26,713 20 (1) 26,732 U.S. Treasury, long-term 2,745 — — 2,745 Asset-backed securities, long-term 962 — — 962 Corporate debt securities, long-term 1,890 — — 1,890 Total $ 45,781 $ 55 $ (1) $ 45,835 September 30, 2020: Cost Gross Unrealized Gains Gross Unrealized Losses Fair Market Value Available-for-sale securities: U.S. Treasury, short-term $ 10,245 $ 38 $ — $ 10,283 Asset-backed securities, short-term 4,723 36 — 4,759 Corporate debt securities, short-term 24,956 37 — 24,993 Corporate debt securities, long-term 1,966 — (3) 1,963 Total $ 41,890 $ 111 $ (3) $ 41,998 |
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 December 31, 2020 and September 30, 2020, respectively (amounts shown in thousands) : December 31, 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 $ 9,571 $ 9,571 $ — $ — Asset-backed securities 3,935 — 3,935 — Corporate debt securities Financial 6,387 6,387 — Industrial 1,913 1,913 — Commercial paper Financial 12,488 12,488 — Industrial 5,944 5,944 — Total short-term investments at fair value 40,238 9,571 30,667 — Long-term investments: U.S. Treasury 2,745 2,745 — — Asset-backed securities 962 — 962 — Corporate debt securities Financial — — Industrial 1,890 1,890 Total assets at fair value $ 45,835 $ 12,316 $ 33,519 $ — Liabilities: Acquisition-related contingent consideration 790 — — 790 Total liabilities at fair value $ 790 $ — $ — $ 790 September 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 $ 10,283 $ 10,283 $ — $ — Asset-backed securities, short-term $ 4,759 — 4,759 — Corporate debt securities Financial 7,695 — 7,695 — Industrial 1,924 — 1,924 — Commercial paper Financial 13,479 — 13,479 — Industrial 1,895 — 1,895 — Total short-term investments at fair value 40,035 10,283 29,752 — Long-term investments: U.S. Treasury — — — — Corporate debt securities Financial 977 — 977 — Industrial 986 — 986 — Total assets at fair value $ 41,998 $ 10,283 $ 31,715 $ — Liabilities: Acquisition-related contingent consideration 753 — — 753 Total liabilities at fair value $ 753 $ — $ — $ 753 |
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 three months ended December 31, 2020 (amounts shown in thousands) : Balance at September 30, 2020 $ 753 Foreign currency effect on contingent consideration 37 Balance at December 31, 2020 $ 790 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 3 Months Ended |
Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The following table summarizes changes in the balance of goodwill during the three months ended December 31, 2020 (amounts shown in thousands) : Balance at September 30, 2020 $ 35,669 Foreign currency effect on goodwill 1,654 Balance at December 31, 2020 $ 37,323 |
Schedule of Intangible Assets | Intangible assets as of December 31, 2020 and September 30, 2020, respectively, are summarized as follows (amounts shown in thousands, except for years): December 31, 2020: Weighted Average Amortization Period Cost Accumulated Amortization Net Completed technologies 6.4 years $ 20,341 $ 9,736 $ 10,605 Customer relationships 4.8 years 17,628 9,928 7,700 Trade names 4.5 years 618 500 118 Total intangible assets $ 38,587 $ 20,164 $ 18,423 September 30, 2020: Weighted Average Amortization Period Cost Accumulated Amortization Net Completed technologies 6.4 years $ 20,341 $ 9,416 $ 10,925 Customer relationships 4.8 years 17,628 9,390 8,238 Trade names 4.5 years 618 492 126 Total intangible assets $ 38,587 $ 19,298 $ 19,289 |
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 2021—remaining $ 4,935 2022 6,209 2023 4,075 2024 1,947 2025 1,257 Total $ 18,423 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Dec. 31, 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 December 31, 2020 2019 Cost of revenue $ 87 $ 61 Selling and marketing 788 572 Research and development 740 674 General and administrative 1,132 996 Stock-based compensation expense included in expenses $ 2,747 $ 2,303 |
Schedule of Stock Option Activity | The following table summarizes stock option activity under the Company’s equity plans during the three months ended December 31, 2020: Number of Shares Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term (in Years) Aggregate Intrinsic Value ( in thousands ) Outstanding at September 30, 2020 1,162,505 $ 7.51 6.1 $ 6,081 Granted — $ — Exercised (241,490) $ 7.82 Canceled — $ — Outstanding at December 31, 2020 921,015 $ 7.43 6.2 $ 9,536 Vested and Expected to Vest at December 31, 2020 921,015 $ 7.43 6.2 $ 9,536 Exercisable at December 31, 2020 585,487 $ 6.25 5.1 $ 6,750 |
Schedule of RSU Activity | The following table summarizes RSU activity under the Company’s equity plans during the three months ended December 31, 2020: Number of Shares Weighted-Average Fair Market Value Per Share Outstanding at September 30, 2020 2,661,943 $ 7.95 Granted 647,052 $ 11.92 Settled (647,035) $ 7.32 Canceled (34,135) $ 8.39 Outstanding at December 31, 2020 2,627,825 $ 9.07 |
Schedule of Performance RSU Activity | Performance Restricted Stock Units The following table summarizes Performance RSU activity under the Company’s equity plans during the three months ended December 31, 2020: Number of Shares Weighted-Average Fair Market Value Per Share Outstanding at September 30, 2020 353,556 $ 6.06 Granted 284,765 $ 11.84 Settled — $ — Canceled — $ — Outstanding at December 31, 2020 638,321 $ 8.64 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Maturities of Operating Lease Liabilities | Maturities of our operating lease liabilities as of December 31, 2020 were as follows (amounts shown in thousands) : Operating leases 2021—remaining $ 1,571 2022 1,737 2023 1,735 2024 1,399 2025 314 2026 310 Thereafter 395 Total lease payments 7,461 Less: amount representing interest (692) Present value of future lease payments $ 6,769 |
Nature of Operations and Summ_4
Nature of Operations and Summary of Significant Accounting Policies - Narrative (Details) $ / shares in Units, check_deposit in Billions | 3 Months Ended | ||
Dec. 31, 2020USD ($)institutionpatentsegmentcheck_deposit$ / shares | Sep. 30, 2020USD ($)$ / shares | Dec. 31, 2019USD ($) | |
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 | ||
Number of check deposits processed (more than) | check_deposit | 4 | ||
Number of patents granted | patent | 69 | ||
Number of pending patent applications | patent | 17 | ||
Net gain resulting from foreign exchange translation | $ 2,760,000 | $ 1,253,000 | |
Research and development | 6,165,000 | 5,292,000 | |
Other than temporary impairments recognized on investments | 0 | 0 | |
Write-offs of allowance for doubtful accounts | 1,000 | 0 | |
Allowance for doubtful accounts receivable | 200,000 | $ 200,000 | |
Capitalized software development costs | 0 | 0 | |
Amortization expense of capitalized software development costs | 0 | 0 | |
Capitalized software development costs for internal use | 200,000 | 23,000 | |
Amortization expense from capitalized software development costs for internal use | $ 100,000 | 100,000 | |
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 | |
Impairment charges related to intangible assets | $ 0 | 0 | |
Trading-day average stock price period | 20 days | ||
Accumulated other comprehensive income (loss) | $ 2,384,000 | $ (323,000) | |
Revision of Prior Period, Reclassification, Adjustment | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Research and development | $ 700,000 | ||
ICAR | Spanish Government Agencies | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Interest rate on loan agreement | 0.00% | ||
Amount outstanding under loan agreement | $ 700,000 | 700,000 | |
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 | |
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 | |
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 Income per Share (Details) - shares shares in Thousands | 3 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Total potentially dilutive common shares outstanding (in shares) | 2,293 | 1,877 |
Stock options | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Total potentially dilutive common shares outstanding (in shares) | 721 | 325 |
RSUs | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Total potentially dilutive common shares outstanding (in shares) | 1,253 | 1,482 |
ESPP common stock equivalents | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Total potentially dilutive common shares outstanding (in shares) | 66 | 70 |
Performance options | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Total potentially dilutive common shares outstanding (in shares) | 179 | 0 |
Performance RSUs | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Total potentially dilutive common shares outstanding (in shares) | 74 | 0 |
Nature of Operations and Summ_6
Nature of Operations and Summary of Significant Accounting Policies - Calculation of Basic and Diluted Net Income Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Accounting Policies [Abstract] | ||
Net income | $ 2,167 | $ 560 |
Weighted-average shares outstanding - basic (in shares) | 42,476 | 40,615 |
Common stock equivalents (in shares) | 1,421 | 1,213 |
Weighted-average shares outstanding - diluted (in shares) | 43,897 | 41,828 |
Net income per share: | ||
Basic (in dollars per share) | $ 0.05 | $ 0.01 |
Diluted (in dollars per share) | $ 0.05 | $ 0.01 |
Revenue Recognition - Disaggreg
Revenue Recognition - Disaggregation of Revenues (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Disaggregation of Revenue [Line Items] | ||
Total revenue | $ 25,976 | $ 22,067 |
Deposits revenue | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 15,616 | 14,651 |
Identity verification revenue | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 10,360 | 7,416 |
Transferred at Point in Time | Deposits software and hardware | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 10,755 | 10,283 |
Transferred at Point in Time | Identity verification software and hardware | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 1,548 | 1,232 |
Transferred over Time | Deposits services and other | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 4,861 | 4,368 |
Transferred over Time | Identity verification services and other | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | $ 8,812 | $ 6,184 |
Revenue Recognition - Contract
Revenue Recognition - Contract Balances (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Sep. 30, 2020 |
Revenue from Contract with Customer [Abstract] | ||
Contract assets, current | $ 4,465 | $ 5,187 |
Contract assets, non-current | 3,671 | 4,468 |
Contract liabilities (deferred revenue), current | 9,742 | 7,973 |
Contract liabilities (deferred revenue), non-current | $ 1,154 | $ 1,597 |
Revenue Recognition - Narrative
Revenue Recognition - Narrative (Details) - USD ($) | 3 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2020 | |
Disaggregation of Revenue [Line Items] | |||
Revenue recognized included in contract liability balance at the beginning of the period | $ 4,900,000 | $ 3,600,000 | |
Impairment losses recognized on contract costs | 0 | 0 | |
Selling and marketing | |||
Disaggregation of Revenue [Line Items] | |||
Contract costs included in selling and marketing expenses | 200,000 | $ 200,000 | |
Other Current and Non-current Assets | |||
Disaggregation of Revenue [Line Items] | |||
Contract costs | $ 1,900,000 | $ 1,500,000 |
Investments - Summary of Invest
Investments - Summary of Investments by Type of Security (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Sep. 30, 2020 |
Schedule Of Available For Sale Securities [Line Items] | ||
Cost | $ 45,781 | $ 41,890 |
Gross Unrealized Gains | 55 | 111 |
Gross Unrealized Losses | (1) | (3) |
Fair Market Value | 45,835 | 41,998 |
Short-term investments | U.S. Treasury | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Cost | 9,557 | 10,245 |
Gross Unrealized Gains | 14 | 38 |
Gross Unrealized Losses | 0 | 0 |
Fair Market Value | 9,571 | 10,283 |
Short-term investments | Asset-backed securities | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Cost | 3,914 | 4,723 |
Gross Unrealized Gains | 21 | 36 |
Gross Unrealized Losses | 0 | 0 |
Fair Market Value | 3,935 | 4,759 |
Short-term investments | Corporate debt securities | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Cost | 26,713 | 24,956 |
Gross Unrealized Gains | 20 | 37 |
Gross Unrealized Losses | (1) | 0 |
Fair Market Value | 26,732 | 24,993 |
Long-term investments | U.S. Treasury | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Cost | 2,745 | |
Gross Unrealized Gains | 0 | |
Gross Unrealized Losses | 0 | |
Fair Market Value | 2,745 | |
Long-term investments | Asset-backed securities | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Cost | 962 | |
Gross Unrealized Gains | 0 | |
Gross Unrealized Losses | 0 | |
Fair Market Value | 962 | |
Long-term investments | Corporate debt securities | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Cost | 1,890 | 1,966 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | (3) |
Fair Market Value | $ 1,890 | $ 1,963 |
Investments - Narrative (Detail
Investments - Narrative (Details) - USD ($) | 3 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2020 | |
Investments, Debt and Equity Securities [Abstract] | |||
Other-than-temporary impairment charges recognized | $ 0 | $ 0 | |
Realized gains (losses) from sale of available-for-sale securities | 0 | $ 0 | |
Acquisition-related contingent consideration | $ 790,000 | $ 753,000 |
Investments - Summary of Fair V
Investments - Summary of Fair Value of Investments Measured on Recurring Basis (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Sep. 30, 2020 |
Assets | ||
Short-term investments | $ 40,238 | $ 40,035 |
Total assets at fair value | 45,835 | 41,998 |
Liabilities | ||
Acquisition-related contingent consideration | 790 | 753 |
Total liabilities at fair value | 790 | 753 |
U.S. Treasury | ||
Assets | ||
Short-term investments | 9,571 | 10,283 |
Long-term investments | 2,745 | 0 |
Asset-backed securities | ||
Assets | ||
Short-term investments | 3,935 | 4,759 |
Long-term investments | 962 | |
Corporate debt securities | Financial | ||
Assets | ||
Short-term investments | 6,387 | 7,695 |
Long-term investments | 0 | 977 |
Corporate debt securities | Industrial | ||
Assets | ||
Short-term investments | 1,913 | 1,924 |
Long-term investments | 1,890 | 986 |
Commercial paper | Financial | ||
Assets | ||
Short-term investments | 12,488 | 13,479 |
Commercial paper | Industrial | ||
Assets | ||
Short-term investments | 5,944 | 1,895 |
Quoted Prices in Active Markets (Level 1) | ||
Assets | ||
Short-term investments | 9,571 | 10,283 |
Total assets at fair value | 12,316 | 10,283 |
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 | 9,571 | 10,283 |
Long-term investments | 2,745 | 0 |
Quoted Prices in Active Markets (Level 1) | Asset-backed securities | ||
Assets | ||
Short-term investments | 0 | 0 |
Long-term investments | 0 | |
Quoted Prices in Active Markets (Level 1) | Corporate debt securities | Financial | ||
Assets | ||
Short-term investments | 0 | |
Long-term investments | 0 | |
Quoted Prices in Active Markets (Level 1) | Corporate debt securities | Industrial | ||
Assets | ||
Short-term investments | 0 | |
Long-term investments | 0 | |
Quoted Prices in Active Markets (Level 1) | Commercial paper | Financial | ||
Assets | ||
Short-term investments | 0 | |
Quoted Prices in Active Markets (Level 1) | Commercial paper | Industrial | ||
Assets | ||
Short-term investments | 0 | |
Significant Other Observable Inputs (Level 2) | ||
Assets | ||
Short-term investments | 30,667 | 29,752 |
Total assets at fair value | 33,519 | 31,715 |
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 | 3,935 | 4,759 |
Long-term investments | 962 | |
Significant Other Observable Inputs (Level 2) | Corporate debt securities | Financial | ||
Assets | ||
Short-term investments | 6,387 | 7,695 |
Long-term investments | 0 | 977 |
Significant Other Observable Inputs (Level 2) | Corporate debt securities | Industrial | ||
Assets | ||
Short-term investments | 1,913 | 1,924 |
Long-term investments | 1,890 | 986 |
Significant Other Observable Inputs (Level 2) | Commercial paper | Financial | ||
Assets | ||
Short-term investments | 12,488 | 13,479 |
Significant Other Observable Inputs (Level 2) | Commercial paper | Industrial | ||
Assets | ||
Short-term investments | 5,944 | 1,895 |
Significant Unobservable Inputs (Level 3) | ||
Assets | ||
Short-term investments | 0 | 0 |
Total assets at fair value | 0 | 0 |
Liabilities | ||
Acquisition-related contingent consideration | 790 | 753 |
Total liabilities at fair value | 790 | 753 |
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 | 0 |
Long-term investments | 0 | |
Significant Unobservable Inputs (Level 3) | Corporate debt securities | Financial | ||
Assets | ||
Short-term investments | 0 | 0 |
Long-term investments | 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 | 3 Months Ended |
Dec. 31, 2020USD ($) | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
September 30, 2020 | $ 753 |
Foreign currency effect on contingent consideration | 37 |
Balance at December 31, 2020 | $ 790 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2020 | |
Goodwill and Intangible Assets [Line Items] | |||
Goodwill | $ 37,323 | $ 35,669 | |
Amortization of intangible assets | $ 1,693 | $ 1,608 | |
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) $ in Thousands | 3 Months Ended |
Dec. 31, 2020USD ($) | |
Goodwill [Roll Forward] | |
Balance at September 30, 2020 | $ 35,669 |
Foreign currency effect on goodwill | 1,654 |
Balance at December 31, 2020 | $ 37,323 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Sep. 30, 2020 | |
Indefinite Lived Intangible Assets By Major Class [Line Items] | ||
Cost | $ 38,587 | $ 38,587 |
Accumulated Amortization | 20,164 | 19,298 |
Net | $ 18,423 | $ 19,289 |
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 | 9,736 | 9,416 |
Net | $ 10,605 | $ 10,925 |
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 | 9,928 | 9,390 |
Net | $ 7,700 | $ 8,238 |
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 | 500 | 492 |
Net | $ 118 | $ 126 |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets - Schedule of Estimated Future Amortization Expense (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Sep. 30, 2020 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2021—remaining | $ 4,935 | |
2022 | 6,209 | |
2023 | 4,075 | |
2024 | 1,947 | |
2025 | 1,257 | |
Net | $ 18,423 | $ 19,289 |
Stockholders' Equity - Stock-Ba
Stockholders' Equity - Stock-Based Compensation Expense Related to Stock Options and RSUs (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Stock-based compensation expense included in expenses | $ 2,747 | $ 2,303 |
Cost of revenue | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Stock-based compensation expense included in expenses | 87 | 61 |
Selling and marketing | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Stock-based compensation expense included in expenses | 788 | 572 |
Research and development | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Stock-based compensation expense included in expenses | 740 | 674 |
General and administrative | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Stock-based compensation expense included in expenses | $ 1,132 | $ 996 |
Stockholders' Equity - Narrativ
Stockholders' Equity - Narrative (Details) | Nov. 06, 2018$ / sharesshares | Dec. 31, 2020USD ($)$ / sharesshares | Dec. 31, 2019USD ($) | Dec. 31, 2020USD ($)$ / sharesshares | Sep. 30, 2020$ / sharesshares | Jan. 31, 2020shares | Dec. 13, 2019USD ($) | Feb. 28, 2019 | Oct. 23, 2018$ / right$ / sharesshares | Mar. 07, 2018shares | Mar. 10, 2017shares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Unrecognized compensation expense | $ | $ 25,000,000 | $ 25,000,000 | |||||||||
Weighted average period for unrecognized compensation expense expected to be recognized (in years) | 2 years 8 months 12 days | ||||||||||
Purchase of common stock (in shares) | 921,015 | 921,015 | 1,162,505 | ||||||||
Discount rate from market price, purchase date | 0.15 | ||||||||||
Recognized compensation expense | $ | $ 2,747,000 | $ 2,303,000 | |||||||||
Total intrinsic value of options exercised | $ | $ 1,500,000 | 100,000 | |||||||||
Amount authorized and approved under share repurchase program | $ | $ 10,000,000 | ||||||||||
Amount of shares repurchased | $ | $ 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 | ||||||||
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, par value (in dollars per share) | $ / shares | $ 0.001 | ||||||||||
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 9 months 18 days | ||||||||||
Awards outstanding (in shares) | 2,627,825 | 2,627,825 | 2,661,943 | ||||||||
Recognized compensation expense | $ | $ 1,900,000 | 1,700,000 | |||||||||
Unrecognized compensation expense related to nonvested awards | $ | 19,200,000 | $ 19,200,000 | |||||||||
Performance RSUs | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Unrecognized compensation expense | $ | $ 3,600,000 | $ 3,600,000 | |||||||||
Weighted average period for unrecognized compensation expense expected to be recognized (in years) | 2 years 9 months 18 days | ||||||||||
Awards outstanding (in shares) | 638,321 | 638,321 | 353,556 | ||||||||
Recognized compensation expense | $ | $ 300,000 | 200,000 | |||||||||
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 3 months 18 days | ||||||||||
Recognized compensation expense | $ | $ 200,000 | 200,000 | |||||||||
Unrecognized compensation expense related to outstanding stock options | $ | 1,400,000 | $ 1,400,000 | |||||||||
Performance options | Chief Executive Officer | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Unrecognized compensation expense | $ | $ 700,000 | $ 700,000 | |||||||||
Weighted average period for unrecognized compensation expense expected to be recognized (in years) | 9 months 18 days | ||||||||||
Number of common stock reserved for future grants (in shares) | 800,000 | ||||||||||
Recognized compensation expense | $ | $ 200,000 | 200,000 | |||||||||
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 | ||||||||||
Number of common stock reserved for future grants (in shares) | 2,719,465 | 2,719,465 | |||||||||
2020 Plan | RSUs | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Awards outstanding (in shares) | 975,746 | 975,746 | |||||||||
2020 Plan | Performance RSUs | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Awards outstanding (in shares) | 638,321 | 638,321 | |||||||||
Prior Plans | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Common stock reserved for issuance (in shares) | 107,903 | ||||||||||
Purchase of common stock (in shares) | 611,226 | 611,226 | |||||||||
Prior Plans | RSUs | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Awards outstanding (in shares) | 1,264,921 | 1,264,921 | |||||||||
ESPP | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Common stock reserved for issuance (in shares) | 649,326 | 649,326 | 1,000,000 | ||||||||
Shares issued to participants pursuant to employee stock purchase plan (in shares) | 350,674 | ||||||||||
Recognized compensation expense | $ | $ 100,000 | $ 100,000 | |||||||||
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) | 267,533 | 267,533 | |||||||||
Director Plan | RSUs | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Purchase of common stock (in shares) | 327,946 | 327,946 |
Stockholders' Equity - Stock Op
Stockholders' Equity - Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | |
Dec. 31, 2020 | Jun. 30, 2020 | Sep. 30, 2020 | |
Number of Shares | |||
Outstanding at September 30, 2020 (in shares) | 1,162,505 | ||
Granted (in shares) | 0 | ||
Exercised (in shares) | (241,490) | ||
Canceled (in shares) | 0 | ||
Outstanding at December 31, 2020 (in shares) | 921,015 | ||
Weighted-Average Exercise Price | |||
Outstanding at September 30, 2020 (in dollars per share) | $ 7.51 | ||
Granted (in dollars per share) | 0 | ||
Exercised (in dollars per share) | 7.82 | ||
Canceled (in dollars per share) | 0 | ||
Outstanding at December 31, 2020 (in dollars per share) | $ 7.43 | ||
Weighted-Average Remaining Contractual Term (in Years) | |||
Outstanding | 6 years 2 months 12 days | 6 years 1 month 6 days | |
Outstanding, Aggregate Intrinsic Value | $ 9,536 | $ 6,081 | |
Vested and Expected to Vest at December 31, 2020 | |||
Outstanding (in shares) | 921,015 | ||
Outstanding, Weighted Average Exercise Price (in dollars per share) | $ 7.43 | ||
Outstanding, Weighted Average Remaining Contractual Term (in Years) | 6 years 2 months 12 days | ||
Outstanding, Aggregate Intrinsic Value (in thousands) | $ 9,536 | ||
Exercisable at December 31, 2020 (in shares) | 585,487 | ||
Exercisable at December 31, 2020, Weighted Average Exercise Price (in dollars per share) | $ 6.25 | ||
Exercisable at December 31, 2020, Weighted Average Remaining Contractual Term (in Years) | 5 years 1 month 6 days | ||
Exercisable at December 31, 2020, Aggregate Intrinsic Value (in thousands) | $ 6,750 |
Stockholders' Equity - RSU Acti
Stockholders' Equity - RSU Activity (Details) - RSUs | 3 Months Ended |
Dec. 31, 2020$ / sharesshares | |
Number of Shares | |
Outstanding at September 30, 2020 (in shares) | shares | 2,661,943 |
Granted (in shares) | shares | 647,052 |
Settled (in shares) | shares | (647,035) |
Canceled (in shares) | shares | (34,135) |
Outstanding at December 31, 2020 (in shares) | shares | 2,627,825 |
Weighted-Average Fair Market Value Per Share | |
Outstanding at September 30, 2020 (in dollars per share) | $ / shares | $ 7.95 |
Granted (in dollars per share) | $ / shares | 11.92 |
Settled (in dollars per share) | $ / shares | 7.32 |
Canceled (in dollars per share) | $ / shares | 8.39 |
Outstanding at December 31, 2020 (in dollars per share) | $ / shares | $ 9.07 |
Stockholders' Equity - Performa
Stockholders' Equity - Performance RSU Activity (Details) - Performance RSUs | 3 Months Ended |
Dec. 31, 2020$ / sharesshares | |
Number of Shares | |
Outstanding at September 30, 2020 (in shares) | shares | 353,556 |
Granted (in shares) | shares | 284,765 |
Settled (in shares) | shares | 0 |
Canceled (in shares) | shares | 0 |
Outstanding at December 31, 2020 (in shares) | shares | 638,321 |
Weighted-Average Fair Market Value Per Share | |
Outstanding at September 30, 2020 (in dollars per share) | $ / shares | $ 6.06 |
Granted (in dollars per share) | $ / shares | 11.84 |
Settled (in dollars per share) | $ / shares | 0 |
Canceled (in dollars per share) | $ / shares | 0 |
Outstanding at December 31, 2020 (in dollars per share) | $ / shares | $ 8.64 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Income tax (benefit) provision | $ (534) | $ 41 |
Effective tax rate | (33.00%) | 7.00% |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) ft² in Thousands, € in Millions | Dec. 04, 2020patent | Nov. 17, 2020patent | Sep. 30, 2020USD ($)patent | Jan. 10, 2020USD ($)productpatent | Nov. 06, 2019USD ($)patentday | Jul. 31, 2019patent | Aug. 17, 2018patent | Jul. 07, 2018patent | Jun. 11, 2018USD ($) | Jun. 11, 2018EUR (€) | May 03, 2018USD ($) | Dec. 31, 2020USD ($)ft² | Feb. 01, 2021USD ($)patent |
Leases | |||||||||||||
Weighted average remaining lease term of operating leases | 4 years 2 months 12 days | ||||||||||||
Weighted average discount rate of operating leases | 4.70% | ||||||||||||
ROU assets | $ | $ 5,407,000 | $ 5,122,000 | |||||||||||
ROU liabilities | $ | 6,769,000 | ||||||||||||
Lease liabilities, current portion | $ | 1,819,000 | 1,751,000 | |||||||||||
Lease liabilities, non-current portion | $ | $ 5,327,000 | 5,018,000 | |||||||||||
Operating lease costs | $ | 500,000 | ||||||||||||
Operating cash flows for operating leases paid | $ | $ 700,000 | ||||||||||||
Minimum | |||||||||||||
Leases | |||||||||||||
Remaining operating lease term | 1 year | ||||||||||||
Maximum | |||||||||||||
Leases | |||||||||||||
Remaining operating lease term | 7 years | ||||||||||||
Line of Credit | Revolving Credit Facility | |||||||||||||
Revolving Credit Facility | |||||||||||||
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 | |||||||||||||
Revolving Credit Facility | |||||||||||||
Basis spread on variable rate | 0.25% | ||||||||||||
Building | |||||||||||||
Leases | |||||||||||||
Office space subject to the lease | ft² | 29 | ||||||||||||
Pending Litigation | General and administrative | |||||||||||||
Legal Proceedings | |||||||||||||
Legal fees | $ | $ 200,000 | ||||||||||||
Pending Litigation | UrbanFT | |||||||||||||
Legal Proceedings | |||||||||||||
Number of patents allegedly infringed | patent | 5 | ||||||||||||
Number of patents infringed | patent | 2 | ||||||||||||
Number of invalid patents | patent | 2 | ||||||||||||
Number of patents not infringed | patent | 2 | ||||||||||||
Pending Litigation | Global Equity & Corporate Consulting, S.L. | ICAR | |||||||||||||
Legal Proceedings | |||||||||||||
Contingency amount claimed | $ 900,000 | € 0.8 | |||||||||||
Pending Litigation | USAA | Wells Fargo | |||||||||||||
Legal Proceedings | |||||||||||||
Number of patents allegedly infringed | 4 | 2 | 2 | 3 | 5 | 4 | |||||||
Number of patents infringed | patent | 1 | 1 | |||||||||||
Amount awarded in damages to other party | $ | $ 102,000,000 | $ 200,000,000 | |||||||||||
Number of patents dropped | patent | 2 | ||||||||||||
Number of invalid patents | patent | 1 | ||||||||||||
Number of products accused of patent infringement | product | 0 | ||||||||||||
Number of patents denied institution | patent | 3 | ||||||||||||
Pending Litigation | USAA | Wells Fargo | Subsequent Event | |||||||||||||
Legal Proceedings | |||||||||||||
Number of patents allegedly infringed | patent | 4 | ||||||||||||
Amount awarded in damages to other party | $ | $ 0 | ||||||||||||
Number of patents instituted | patent | 3 | ||||||||||||
Number of patents denied institution | patent | 1 | ||||||||||||
Pending Litigation | USAA | PNC Bank | |||||||||||||
Legal Proceedings | |||||||||||||
Number of patents allegedly infringed | patent | 2 | 2 |
Commitments and Contingencies_2
Commitments and Contingencies - Maturity of Operating Lease Liabilities (Details) $ in Thousands | Dec. 31, 2020USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2021—remaining | $ 1,571 |
2022 | 1,737 |
2023 | 1,735 |
2024 | 1,399 |
2025 | 314 |
2026 | 310 |
Thereafter | 395 |
Total lease payments | 7,461 |
Less: amount representing interest | (692) |
Present value of future lease payments | $ 6,769 |
Revenue Concentration (Details)
Revenue Concentration (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2020 | |
Revenue, Major Customer [Line Items] | |||
Revenue | $ 25,976 | $ 22,067 | |
Accounts receivable, net | 12,714 | $ 15,612 | |
Customer Concentration Risk | Sales Revenue Net | |||
Revenue, Major Customer [Line Items] | |||
Revenue | 3,900 | 8,100 | |
Customer Concentration Risk | Accounts Receivable | |||
Revenue, Major Customer [Line Items] | |||
Accounts receivable, net | $ 100 | $ 4,400 | |
Customer Concentration Risk | Customer One | Sales Revenue Net | |||
Revenue, Major Customer [Line Items] | |||
Total revenue, percentage | 15.00% | 20.00% | |
Customer Concentration Risk | Customer Two | Sales Revenue Net | |||
Revenue, Major Customer [Line Items] | |||
Total revenue, percentage | 17.00% | ||
Geographic Concentration Risk | Sales Revenue Net | International | |||
Revenue, Major Customer [Line Items] | |||
Total revenue, percentage | 31.00% | 25.00% | |
Geographic Concentration Risk | Long-term Assets | International | |||
Revenue, Major Customer [Line Items] | |||
Total revenue, percentage | 64.00% | 66.00% | |
Geographic Concentration Risk | Long-term Assets, Excluding Goodwill and Other Intangibles | International | |||
Revenue, Major Customer [Line Items] | |||
Total revenue, percentage | 15.00% | 15.00% |