Cover
Cover - USD ($) | 12 Months Ended | ||
Sep. 30, 2023 | Mar. 12, 2024 | Mar. 31, 2023 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Sep. 30, 2023 | ||
Current Fiscal Year End Date | --09-30 | ||
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 Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Document Financial Statement Error Correction [Flag] | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 428,814,692 | ||
Entity Common Stock, Shares Outstanding | 46,790,611 | ||
Documents Incorporated by Reference | None. | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2023 | ||
Document Fiscal Period Focus | FY | ||
Entity Central Index Key | 0000807863 |
Audit Information
Audit Information | 12 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Audit Information [Abstract] | ||
Auditor Name | BDO USA, P.C. | Mayer Hoffman McCann P.C. |
Auditor Location | Troy, Michigan | San Diego, California |
Auditor Firm ID | 243 | 199 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2023 | Sep. 30, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 58,913 | $ 32,059 |
Short-term investments | 74,700 | 58,268 |
Accounts receivable, net | 32,132 | 35,922 |
Contract assets, current portion | 18,355 | 7,037 |
Prepaid expenses | 3,513 | 1,946 |
Other current assets | 2,396 | 2,622 |
Total current assets | 190,009 | 137,854 |
Long-term investments | 1,304 | 10,633 |
Property and equipment, net | 2,829 | 3,493 |
Right-of-use assets | 4,140 | 5,155 |
Intangible assets, net | 64,674 | 75,756 |
Goodwill | 123,548 | 115,632 |
Deferred income tax assets | 11,645 | 10,110 |
Contract assets, non-current portion | 5,579 | 4,218 |
Other non-current assets | 1,647 | 1,628 |
Total assets | 405,375 | 364,479 |
Current liabilities: | ||
Accounts payable | 7,589 | 4,974 |
Accrued payroll and related taxes | 10,554 | 10,393 |
Accrued interest payable | 305 | 202 |
Income tax payables | 4,329 | 206 |
Deferred revenue, current portion | 17,360 | 21,350 |
Lease liabilities, current portion | 1,902 | 2,110 |
Acquisition-related contingent consideration | 7,976 | 5,920 |
Restructuring accrual | 0 | 901 |
Other current liabilities | 1,482 | 2,402 |
Total current liabilities | 51,497 | 48,458 |
Convertible senior notes | 135,516 | 127,970 |
Deferred revenue, non-current portion | 957 | 1,775 |
Lease liabilities, non-current portion | 2,867 | 4,106 |
Deferred income tax liabilities, non-current portion | 6,476 | 9,578 |
Other non-current liabilities | 2,874 | 1,613 |
Total liabilities | 200,187 | 193,500 |
Commitments and contingencies (Note 10) | ||
Stockholders’ equity: | ||
Preferred stock, $0.001 par value, 1,000,000 shares authorized, none issued and outstanding, as of September 30, 2023 and 2022 | 0 | 0 |
Common stock, $0.001 par value, 120,000,000 shares authorized, 45,591,199 and 44,680,429 issued and outstanding, as of September 30, 2023 and 2022, respectively | 46 | 44 |
Additional paid-in capital | 228,691 | 216,493 |
Accumulated other comprehensive loss | (14,237) | (28,219) |
Accumulated deficit | (9,312) | (17,339) |
Total stockholders’ equity | 205,188 | 170,979 |
Total liabilities and stockholders’ equity | $ 405,375 | $ 364,479 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2023 | Sep. 30, 2022 |
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) | 120,000,000 | 120,000,000 |
Common stock, shares issued (in shares) | 45,591,199 | 44,680,429 |
Common stock, shares outstanding (in shares) | 45,591,199 | 44,680,429 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE INCOME (LOSS) - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2021 | |
Total revenue | $ 172,552 | $ 144,804 | $ 119,797 |
Operating costs and expenses | |||
Selling and marketing | 40,551 | 38,841 | 32,497 |
Research and development | 28,988 | 30,192 | 28,042 |
General and administrative | 43,338 | 26,591 | 22,490 |
Amortization and acquisition-related costs | 19,046 | 15,172 | 8,951 |
Restructuring costs | 2,114 | 1,800 | 0 |
Total operating costs and expenses | 156,988 | 132,604 | 106,520 |
Operating income | 15,564 | 12,200 | 13,277 |
Interest expense | 9,063 | 8,232 | 5,129 |
Other income (expense), net | 3,840 | (366) | 654 |
Income before income taxes | 10,341 | 3,602 | 8,802 |
Income tax benefit (provision) | (2,314) | 92 | (824) |
Net income | $ 8,027 | $ 3,694 | $ 7,978 |
Net income per share—basic (in dollars per share) | $ 0.18 | $ 0.08 | $ 0.18 |
Net income per share—diluted (in dollars per share) | $ 0.17 | $ 0.08 | $ 0.18 |
Shares used in calculating net income per share—basic (in shares) | 45,533 | 44,595 | 43,509 |
Shares used in calculating net income per share—diluted (in shares) | 46,461 | 45,780 | 45,083 |
Comprehensive income (loss) | |||
Net income | $ 8,027 | $ 3,694 | $ 7,978 |
Foreign currency translation adjustment | 13,093 | (27,559) | (455) |
Unrealized gain (loss) on investments | 889 | 283 | (165) |
Other comprehensive income (loss) | 13,982 | (27,276) | (620) |
Comprehensive income (loss) | 22,009 | (23,582) | 7,358 |
Software and hardware | |||
Total revenue | 88,374 | 72,928 | 60,069 |
Operating costs and expenses | |||
Cost of revenue | 1,413 | 1,576 | 2,468 |
Services and other | |||
Total revenue | 84,178 | 71,876 | 59,728 |
Operating costs and expenses | |||
Cost of revenue | $ 21,538 | $ 18,432 | $ 12,072 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Treasury Stock | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss) |
Beginning balance (in shares) at Sep. 30, 2020 | 41,780,000 | |||||
Beginning balance at Sep. 30, 2020 | $ 132,243 | $ 42 | $ 146,518 | $ 0 | $ (13,994) | $ (323) |
Treasury Stock, Beginning Balance (in shares) at Sep. 30, 2020 | 0 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Exercise of stock options (in shares) | 329,878 | 330,000 | ||||
Exercise of stock options | $ 2,516 | 2,516 | ||||
Settlement of restricted stock units (in shares) | 1,066,000 | |||||
Settlement of restricted stock units | 0 | $ 1 | (1) | |||
Issuance of common stock under employee stock purchase plan (in shares) | 129,000 | |||||
Issuance of common stock under employee stock purchase plan | 1,519 | 1,519 | ||||
Acquisition-related shares issued (in shares) | 867,000 | |||||
Acquisition-related shares issued | 13,943 | $ 1 | 13,942 | |||
Stock-based compensation expense | 11,532 | 11,532 | ||||
Sale of convertible senior notes warrants | 23,909 | 23,909 | ||||
Repurchase and retirements of common stock (in shares) | (3,000) | (8,000) | ||||
Repurchases and retirements of common stock | (190) | $ (140) | (50) | |||
Components of comprehensive income (loss) | ||||||
Net income | 7,978 | 7,978 | ||||
Currency translation adjustment | (455) | (455) | ||||
Change in unrealized gain (loss) on investments | (165) | (165) | ||||
Total comprehensive income (loss) | 7,358 | |||||
Ending balance (in shares) at Sep. 30, 2021 | 44,169,000 | |||||
Treasury Stock, Ending Balance (in shares) at Sep. 30, 2021 | (8,000) | |||||
Ending balance at Sep. 30, 2021 | $ 192,830 | $ 44 | 199,935 | $ (140) | (6,066) | (943) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Exercise of stock options (in shares) | 35,625 | 35,000 | ||||
Exercise of stock options | $ 238 | 238 | ||||
Settlement of restricted stock units (in shares) | 1,075,000 | |||||
Settlement of restricted stock units | 0 | $ 1 | (1) | |||
Issuance of common stock under employee stock purchase plan (in shares) | 129,000 | |||||
Issuance of common stock under employee stock purchase plan | 1,487 | 1,487 | ||||
Acquisition-related shares issued (in shares) | 203,000 | |||||
Acquisition-related shares issued | 1,836 | 1,836 | ||||
Stock-based compensation expense | 13,346 | 13,346 | ||||
Repurchase and retirements of common stock (in shares) | (931,000) | 8,000 | ||||
Repurchases and retirements of common stock | (15,176) | $ 1 | 348 | $ 140 | (14,967) | |
Components of comprehensive income (loss) | ||||||
Net income | 3,694 | 3,694 | ||||
Currency translation adjustment | (27,559) | (27,559) | ||||
Change in unrealized gain (loss) on investments | 283 | 283 | ||||
Total comprehensive income (loss) | $ (23,582) | |||||
Ending balance (in shares) at Sep. 30, 2022 | 44,680,429 | 44,680,000 | ||||
Treasury Stock, Ending Balance (in shares) at Sep. 30, 2022 | 0 | |||||
Ending balance at Sep. 30, 2022 | $ 170,979 | $ 44 | 216,493 | $ 0 | (17,339) | (28,219) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Exercise of stock options (in shares) | 98,952 | 100,000 | ||||
Exercise of stock options | $ 727 | 727 | ||||
Settlement of restricted stock units (in shares) | 689,000 | |||||
Settlement of restricted stock units | 0 | $ 2 | (2) | |||
Issuance of common stock under employee stock purchase plan (in shares) | 122,000 | |||||
Issuance of common stock under employee stock purchase plan | 1,010 | 1,010 | ||||
Stock-based compensation expense | 10,463 | 10,463 | ||||
Components of comprehensive income (loss) | ||||||
Net income | 8,027 | 8,027 | ||||
Currency translation adjustment | 13,093 | 13,093 | ||||
Change in unrealized gain (loss) on investments | 889 | 889 | ||||
Total comprehensive income (loss) | $ 22,009 | |||||
Ending balance (in shares) at Sep. 30, 2023 | 45,591,199 | 45,591,000 | ||||
Treasury Stock, Ending Balance (in shares) at Sep. 30, 2023 | 0 | |||||
Ending balance at Sep. 30, 2023 | $ 205,188 | $ 46 | $ 228,691 | $ 0 | $ (9,312) | $ (14,237) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2021 | |
Operating activities: | |||
Net income | $ 8,027 | $ 3,694 | $ 7,978 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Stock-based compensation expense | 10,463 | 13,346 | 11,532 |
Amortization of intangible assets | 16,992 | 13,547 | 7,505 |
Depreciation and amortization | 1,727 | 1,401 | 1,439 |
Amortization of investment premiums & other | (722) | 1,684 | 1,266 |
Accretion and amortization on debt securities | 7,546 | 7,053 | 4,372 |
Net changes in estimated fair value of acquisition-related contingent consideration | 2,056 | (1,358) | 1,080 |
Deferred taxes | (5,496) | (8,988) | 105 |
Changes in assets and liabilities, net of acquisitions: | |||
Accounts receivable | 4,316 | (19,004) | (813) |
Contract assets | (12,471) | (3,095) | 1,150 |
Other assets | (1,124) | 417 | (1,331) |
Accounts payable | 2,535 | 2,183 | (1,589) |
Accrued payroll and related taxes | 18 | (2,195) | 2,687 |
Income taxes payable | 5,577 | 422 | (71) |
Deferred revenue | (5,217) | 9,950 | 1,790 |
Restructuring accrual | (977) | 991 | 0 |
Other liabilities | (1,664) | 1,071 | 241 |
Net cash provided by operating activities | 31,586 | 21,119 | 37,341 |
Investing activities: | |||
Purchases of investments | (71,733) | (47,818) | (246,508) |
Sales and maturities of investments | 66,250 | 173,316 | 89,956 |
Acquisitions, net of cash acquired | (267) | (122,672) | (12,549) |
Purchases of property and equipment, net | (1,034) | (1,126) | (1,387) |
Net cash provided by (used in) investing activities | (6,784) | 1,700 | (170,488) |
Financing activities: | |||
Proceeds from the issuance of convertible senior notes | 0 | 0 | 155,250 |
Payment for convertible senior notes issuance costs | 0 | 0 | (5,513) |
Purchase of 2026 convertible senior notes hedge | 0 | 0 | (33,192) |
Proceeds from issuance of convertible senior notes warrants | 0 | 0 | 23,909 |
Proceeds from the issuance of equity plan common stock | 1,737 | 1,725 | 4,035 |
Repurchases and retirements of common stock | 0 | (15,176) | (190) |
Payment of acquisition-related contingent consideration | 0 | (7,656) | (782) |
Proceeds from other borrowings | 0 | 0 | 251 |
Principal payments on other borrowings | (36) | (36) | (88) |
Net cash provided by (used in) financing activities | 1,701 | (21,143) | 143,680 |
Foreign currency effect on cash and cash equivalents | 351 | 71 | (207) |
Net increase in cash and cash equivalents | 26,854 | 1,747 | 10,326 |
Cash and cash equivalents at beginning of period | 32,059 | 30,312 | 19,986 |
Cash and cash equivalents at end of period | 58,913 | 32,059 | 30,312 |
Supplemental disclosures of cash flow information: | |||
Cash paid for interest | 1,413 | 1,164 | 569 |
Cash paid for income taxes | 3,836 | 750 | 741 |
Supplemental disclosures of non-cash investing and financing activities: | |||
Reclassification of convertible senior notes hedge and embedded conversion derivative to additional paid-in capital | 0 | 28,516 | 0 |
Acquisition-related shares issued | 0 | 1,836 | 0 |
Unrealized holding gain (loss) on available-for-sale investments | $ 889 | $ 283 | $ (165) |
NATURE OF OPERATIONS AND SUMMAR
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 1. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Operations Mitek Systems, Inc. (“Mitek,” the “Company,” “we,” “us,” and “our” ) is a leading innovator of mobile image capture and digital identity verification solutions. We are a software development company with expertise in computer vision, artificial intelligence and machine learning. We currently serve more than 7,900 financial services organizations and leading marketplace and financial technology (“fintech”) brands around the globe. Customers count on Mitek to deliver trusted and convenient online experiences, detect and reduce fraud, and meet Know Your Customer (“KYC”) and Anti-Money Laundering (“AML”) regulatory compliance. The Company’s solutions are embedded in native mobile apps and web browsers to facilitate digital consumer experiences. Mitek’s identity verification and authentication technologies and services make it possible for banks, financial services organizations and the world’s leading marketplace and sharing platforms to verify an individual’s identity during numerous stages of the customer lifecycle, allowing them to reduce risk and meet regulatory requirements. The Company’s advanced mobile deposit system enables secure, fast and convenient deposit services. Thousands of organizations use Mitek solutions to optimize the security of mobile check deposits, new account openings and more. In May of 2021, Mitek acquired ID R&D, Inc. (“ID R&D” and such acquisition, the “ID R&D Acquisition”), an award-winning provider of AI-based voice and face biometrics and liveness detection. ID R&D delivers innovative, biometric capabilities that raise the bar on usability and performance. The ID R&D Acquisition helps simplify and secure the entire transaction lifecycle for both businesses and consumers, provides businesses and financial institutions with access to one authentication solution to deploy throughout the entire transaction cycle, and can provide consumers with a simple, intuitive approach to fighting fraud. In March of 2022, Mitek acquired HooYu Ltd. (“HooYu”), a leading KYC technology provider in the United Kingdom. Such technology helps to ensure businesses know the true identity of their customers by linking biometric verification with real-time data aggregation across many different sources, including credit bureaus, international sanctions lists, local law-enforcement, and others. Mitek markets and sells its products and services worldwide through internal, direct sales teams located in the U.S., Europe, and Latin America as well as through channel partners. Our partner sales strategy includes channel partners who are financial services technology providers and identity verification providers. These partners integrate our products into their solutions to meet the needs of their customers, typically provisioning Mitek services through their respective platforms. Summary of Significant Accounting Policies Basis of Presentation The financial statements are prepared under the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 105-10, Generally Accepted Accounting Principles , in accordance with accounting principles generally accepted in the U.S. (“GAAP”). 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 equivalents at the exchange rate in effect on the balance sheet date and revenues and expenses are translated into U.S. dollars using the average exchange rate over the period. Resulting currency translation adjustments are recorded in accumulated other comprehensive loss in the consolidated balance sheet. The Company recorded net gains resulting from foreign exchange translation of $13.1 million for the twelve months ended September 30, 2023. The Company recorded net losses resulting from foreign exchange translation of $27.6 million and $0.5 million for the twelve months ended September 30, 2022 and 2021, respectively. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses, deferred taxes, and related disclosure of contingent assets and liabilities. On an ongoing basis, management reviews its estimates based upon currently available information. Actual results could differ materially from those estimates. These estimates include, but are not limited to, assessing the collectability of accounts receivable, estimation of the value of stock-based compensation awards, fair value of assets and liabilities acquired, impairment of goodwill, useful lives of intangible assets, standalone selling price related to revenue recognition, contingent consideration, and income taxes. Revenue Recognition The Company generates revenue primarily from the delivery of licenses and related services to customers (for both on premise and software as a service (“SaaS”) products), as well as the delivery of hardware and professional services. Consistent with Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (“ASC 606”), revenue is recognized when control of these services is transferred to the Company’s customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those services. The Company determined revenue recognition through the following steps: 1. Identification of the contract, or contracts, with a customer 2. Identification of the performance obligations in the contract 3. Determination of the transaction price 4. Allocation of the transaction price to the performance obligations in the contract 5. Recognition of revenue when, or as, performance obligations are satisfied Note 2 describes the nature of the Company’s primary types of revenue and the revenue recognition policies and significant payment terms as they pertain to the types of transactions the Company enters into with its customers. Contract Balances: The timing of revenue recognition may differ from the timing of invoicing to customers, and these timing differences result in receivables (billed or unbilled), contract assets, or contract liabilities (deferred revenue) on the Company’s consolidated balance sheets. The Company records a contract asset when revenue is recognized prior to the right to invoice, or deferred revenue when revenue is recognized subsequent to invoicing. The Company records an unbilled receivable when revenue is recognized and it has an unconditional right to invoice and receive payment. The Company reports net contract asset or liability positions on a customer-by-customer basis at the end of each reporting period. Unbilled receivables are included within accounts receivable on the consolidated balance sheets and were $0.9 million and $1.7 million as of September 30, 2023 and 2022, respectively. Contract Costs: The Company incurs incremental costs to obtain a contract, consisting primarily of sales commissions, which are payable 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. Cost of Revenue: Cost of revenue includes personnel costs related to billable services and software support, direct costs associated with our hardware products and hosting costs. Depreciation and amortization that are excluded from cost of revenue are included in research and development and selling and marketing on the consolidated statement of operations and other comprehensive income (loss). Restructuring Costs Restructuring costs consist of employee severance obligations and other related costs. Restructuring costs were $2.1 million and $1.8 million for the twelve months ended September 30, 2023 and 2022, respectively. There were no restructuring costs for the twelve months ended September 30, 2021. Reclassifications A reclassification has been made to the prior periods’ consolidated financial statements in order to conform to the current period presentation. Accrued interest payable and income tax payables were included in the other current liabilities line in the consolidated balance sheet as of September 30, 2022, however, they have been presented separately in the consolidated balance sheet as of September 30, 2023 so that the total of the other current liabilities line is less than five percent of total current liabilities. Revision of Previously Reported Consolidated Financial Statements In connection with the preparation of its consolidated financial statements for the twelve months ended September 30, 2023, the Company determined that its previously issued consolidated financial statements for the period ended September 30, 2022 contained errors in the application of GAAP. See Note 15 for further details. 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 twelve months ended September 30, 2023, 2022 and 2021, 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) : 2023 2022 2021 Stock options 437 506 543 RSUs 1,455 960 1,113 ESPP common stock equivalents 6 7 9 Performance options 755 623 272 Performance RSUs 268 281 104 Convertible senior notes 7,448 7,448 4,856 Warrants 7,448 7,448 4,856 Total potentially dilutive common shares outstanding 17,817 17,273 11,753 The calculation of basic and diluted net income per share for the twelve months ended September 30, 2023, 2022 and 2021, is as follows (amounts in thousands, except per share data): 2023 2022 2021 Net income $ 8,027 $ 3,694 $ 7,978 Weighted-average shares outstanding—basic 45,533 44,595 43,509 Common stock equivalents 928 1,185 1,574 Weighted-average shares outstanding—diluted 46,461 45,780 45,083 Net income per share: Basic $ 0.18 $ 0.08 $ 0.18 Diluted $ 0.17 $ 0.08 $ 0.18 Cash and Cash Equivalents Cash and cash equivalents are defined as highly liquid financial instruments with original maturities of three months or less. The Company's cash and cash equivalents are composed of interest and non-interest-bearing deposits and money market funds. Cash and cash equivalents are maintained with various financial institutions. Investments Investments consist of corporate notes and bonds, 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 their estimated fair value. Unrealized gains and losses for available-for-sale securities are included in accumulated other comprehensive loss, a component of stockholders’ equity. The Company evaluates its investments to assess whether those with unrealized loss positions are other-than-temporarily impaired. Impairments are considered to be other-than-temporary if they are related to deterioration in credit risk or if it is likely that the Company will sell the securities before the recovery of its cost basis. Realized gains and losses and declines in value judged to be other-than-temporary are determined based on the specific identification method and are reported in other income (expense), net in the consolidated statements of operations and other comprehensive income (loss). No other-than-temporary impairment charges were recognized in the twelve months ended September 30, 2023, 2022, and 2021. 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 Credit Losses 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 credit losses are established based on various factors including credit profiles of the Company’s customers, contractual terms and conditions, historical payments, and current economic trends. The Company reviews its allowances by assessing individual accounts receivable over a specific aging and amount. Accounts receivable are written off on a case-by-case basis, net of any amounts that may be collected. The Company had $0.1 million of write-offs to the allowance for credit losses for the twelve months ended September 30, 2023, no write-offs for the twelve months ended September 30, 2022, and $0.1 million of write-offs for the September 30, 2021. The Company maintained an allowance for credit losses of $1.5 million and $0.9 million as of September 30, 2023 and 2022, respectively. Concentration of Credit Risk Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash and cash equivalents, investments, and accounts receivable. The Company maintains the majority of its cash and cash equivalent balances with financial institutions that management believes are high-credit, quality financial institutions and invests its cash equivalents in highly rated market funds. Property and Equipment Property and equipment are carried at cost less accumulated depreciation and amortization. The following is a summary of property and equipment as of September 30, 2023 and 2022 (amounts in thousands): 2023 2022 Property and equipment—at cost: Leasehold improvements $ 2,612 $ 2,554 Machinery and equipment 3,657 3,384 Capitalized software development costs 3,610 2,902 Furniture and fixtures 728 709 10,607 9,549 Less: accumulated depreciation and amortization (7,778) (6,056) Total property and equipment, net $ 2,829 $ 3,493 Depreciation and amortization of property and equipment are calculated using the straight-line method over estimated useful lives ranging from three Leases The Company determines if an arrangement is a lease at inception in accordance with ASC Topic 842, Leases (“ASC 842”). The lease term begins on the commencement date, which is the date the Company takes possession of the property, and may include options to extend or terminate the lease when it is reasonably certain that the option will be exercised. The lease term is used to determine lease classification as an operating or finance lease and is used to calculate straight-line expense for operating leases. Right of use (“ROU”) assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make payments arising from the lease. As a practical expedient, lease agreements with lease and non-lease components are accounted for as a single lease component for all asset classes, which are comprised of real estate leases and auto leases. ROU assets and lease liabilities are recognized at the commencement date based upon the present value of lease payments over the lease term. ROU assets also include prepaid lease payments and exclude lease incentives received. The Company estimates contingent lease incentives when it is probable that the Company is entitled to the incentive at lease commencement. Since the Company’s leases do not typically provide an implicit rate, the Company uses its incremental borrowing rate based upon the information available at commencement date of each lease. The determination of the incremental borrowing rate requires judgment. The Company determines the incremental borrowing rate using the Company’s current secured borrowing rate. The Company elected the short-term lease recognition exemption for all leases that qualify. Therefore, leases with an initial term of twelve months or less are not recorded on the consolidated balance sheet; instead, lease payments are recognized as lease expenses on a straight-line basis over the lease term. See Note 11 for additional details. Operating lease assets and liabilities are recognized for leases with lease terms greater than 12 months based on the present value of the future lease payments over the lease term at the commencement date. Operating lease expense is recognized on a straight-line basis over the lease term. Long-Lived Assets The Company evaluates the carrying value of long-lived assets, including license agreements and other intangible assets, when events and circumstances indicate that these assets may be impaired or in order to determine whether any revision to the related useful lives should be made. This evaluation is based on management’s projections of the undiscounted future cash flows associated with each product or asset. If management’s evaluation indicates that the carrying values of these assets are impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. The Company did not record any impairment of long-lived assets during the twelve months ended September 30, 2023, 2022, or 2021. 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. Amortization expense of capitalized development costs is included in research and development in the consolidated statements of other comprehensive income (loss). For the twelve months ended September 30, 2023, 2022, and 2021, 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. The Company had no amortization expense from capitalized software costs during the twelve months ended September 30, 2023, 2022, or 2021. Qualifying costs related to software acquired, developed, or modified solely to meet the Company’s 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 $0.7 million, $0.8 million, and $0.8 million of costs related to computer software developed for internal use during the twelve months ended September 30, 2023, 2022 and 2021, respectively. The Company recognized $0.7 million, $0.4 million and $0.3 million of amortization expense from internal use software during the twelve months ended September 30, 2023, 2022 and 2021, respectively. 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 Topic 350”), the Company reviews its goodwill 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. 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. The process of evaluating the potential impairment of goodwill is subjective and requires significant judgment at many points during the analysis. Management determines the fair value of the reporting unit based on the income approach which requires significant judgments to be made about the future cash flows of that reporting unit, discount rates, and growth rates. The Company’s cash flow forecasts are based on assumptions that represent the highest and best use for the Company’s reporting units. In the fourth quarter of fiscal 2023, management completed its annual goodwill impairment test and concluded that the Company’s goodwill was not impaired. 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 group 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 twelve months ended September 30, 2023, 2022, or 2021. Other Borrowings The Company has certain loan agreements with Spanish government agencies which were assumed when the Company acquired ICAR Vision Systems, S.L. (“ICAR”) in 2017. These agreements have repayment periods of five 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 8 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 8 for additional details. Stock-Based Compensation The Company issues RSUs, stock options, performance options, and Senior Executive Long-Term Incentive Restricted Stock Units (“Senior Executive Performance RSUs”) as awards to its employees based on the fair value assigned to RSUs which is based on the closing stock price of its common stock, par value $0.001 (“Common Stock”) on the date of grant. 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 (“ASC 718”). Forfeitures are recorded as they occur. 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. Advertising Expense Advertising costs are expensed as incurred and totaled $1.2 million, $1.1 million and $1.2 million during the twelve months ended September 30, 2023, 2022, and 2021, respectively. Research and Development Research and development costs are expensed in the period incurred. Segment Reporting FASB ASC Topic 280, Segment Reporting , requires the use of a management approach in identifying segments of an enterprise. During the twelve months ended September 30, 2023, management determined that the Company has only one operating segment: the development, sale, and service of proprietary software solutions related to mobile imaging. The Company’s chief operating decision maker is its Chief Executive Officer, who reviews financial information presented on a consolidated basis for purposes of making operating decisions, assessing financial performance and allocating resources. Comprehensive Income (Loss) Comprehensive income (loss) consists of net income, unrealized gains and losses on available-for-sale securities, and foreign currency translation adjustments. Recently Adopted Accounting Pronouncements The Company did not adopt any new accounting pronouncements in the twelve months ended September 30, 2023. Recently Issued Accounting Pronouncements In December 2023, the FASB issued an Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures amending existing income tax disclosure guidance, primarily requiring more detailed disclosure for income taxes paid and the effective tax rate reconciliation. The ASU is effective for annual reporting periods beginning after December 15, 2024, with early adoption permitted and can be applied on either a prospective or retroactive basis. The Company is currently evaluating the ASU to determine its impact on its income tax disclosures and expects. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (ASU 2020-04) and also issued subsequent amendments to the initial guidance (collectively, Topic 848). Topic 848 provides optional guidance for contract modifications and certain hedging relationships associated with the transition from reference rates that are expected to be discontinued. The Company will adopt Topic 848 when the relevant contracts are modified upon transition to alternative reference rates. The Company does not expect the adoption of Topic 848 will have a material impact on the consolidated financial statements. No other new accounting pronouncement issued or effective during the twelve months ended September 30, 2023 had, or are expected to have, a material impact on the Company’s consolidated financial statements. |
REVENUE RECOGNITION
REVENUE RECOGNITION | 12 Months Ended |
Sep. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE RECOGNITION | 2. REVENUE RECOGNITION Nature of Goods and Services The following is a description of principal activities from which the Company generates its revenue. Contracts with customers are evaluated on a contract-by-contract basis as contracts may include multiple types of goods and services as described below. Software and Hardware Software and hardware revenue is generated from on premise software license sales, as well as sales of hardware scanner boxes and on premise appliance products. Software is typically sold as a time-based license with a term of one Services and Other Services and other revenue is generated from the sale of software as a service (“SaaS”) products and services, maintenance associated with the sale of on premise software licenses and consulting and professional services. The Company’s SaaS offerings give customers the option to be charged upon their incurred usage in arrears (“Pay as You Go”), or commit to a minimum spend over their contracted period, with the ability to purchase unlimited additional transactions above the minimum during the contract term. Revenue related to Pay as You Go contracts are recognized based on the customer’s actual usage, in the period of usage. For contracts which include a minimum commitment, the Company is standing ready to provide as many transactions as desired by the customer throughout the contract term, and revenue is recognized on a ratable basis over the contract period including an estimate of usage above the minimum commitment. Usage above minimum commitment is estimated by looking at historical usage, expected volume, and other factors to project out for the remainder of the contract term. The estimated usage-based revenues are constrained to the amount the Company expects to be entitled to receive in exchange for providing access to its platform. If professional services are deemed to be distinct, revenue is recognized as services are performed. The Company does not view the signing of the contract or the provision of initial setup services as discrete earnings events that are distinct. Significant Judgments in Application of the Guidance The Company uses the following methods, inputs, and assumptions in determining amounts of revenue to recognize: Identification of Performance Obligations For contracts that contain multiple performance obligations, which include combinations of software licenses, maintenance, and services, the Company accounts for individual goods or services as a separate performance obligation if they are distinct. The good or service is distinct if the good or service is separately identifiable from other items in the arrangement and if a customer can benefit from it on its own or with other resources that are readily available to the customer. If these criteria are not met, the promised goods or services are accounted for as a combined performance obligation. Determination of Transaction Price The transaction price is determined based on the consideration to which the Company will be entitled in exchange for transferring products or services to the customer. The Company includes any fixed charges within its contracts as part of the total transaction price. To the extent that variable consideration is not constrained, the Company includes an estimate of the variable amount, as appropriate, within the total transaction price and updates its assumptions over the duration of the contract. As a practical expedient, the Company does not adjust the transaction price for the effects of a significant financing component if, at contract inception, the period between customer payment and the transfer of goods or services is expected to be one year or less. Assessment of Estimates of Variable Consideration Many of the Company’s contracts with customers contain some component of variable consideration; however, variable consideration will only be included in the transaction price to the extent it is probable that a significant reversal of revenues recognized will not occur when the uncertainty associated with the variable consideration is resolved. The Company may constrain the estimated transaction price in the event of a high degree of uncertainty as to the final consideration amount owed because of an extended length of time over which the fees may be adjusted or due to uncertainty surrounding collectability. The Company estimates variable consideration in its contracts primarily using the expected value method as the Company believes this method represents the most appropriate estimate for this consideration, based on historical usage trends, the individual contract considerations, and its best judgment at the time. Allocation of Transaction Price The transaction price, including any discounts, is allocated between separate goods and services in a contract that contains multiple performance obligations based on their relative standalone selling prices. The standalone selling prices are based on the prices at which the Company separately sells each good or service. For items that are not sold separately, the Company estimates the standalone selling prices using available information such as market conditions and internally approved pricing guidelines. In certain situations, primarily transactional SaaS revenue described above, the Company allocates variable consideration to a series of distinct goods or services within a contract. The Company allocates variable payments to one or more, but not all, of the distinct goods or services or to a series of distinct goods or services in a contract when (i) the variable payment relates specifically to the Company’s efforts to transfer the distinct good or service and (ii) the variable payment is for an amount that depicts the amount of consideration to which the Company expects to be entitled in exchange for transferring the promised goods or services to its customer. Disaggregation of Revenue The following table presents the Company's revenue disaggregated by major product category ( amounts in thousands ): Twelve Months Ended September 30, 2023 2022 2021 Major product category Deposits software and hardware $ 78,212 $ 64,548 $ 55,129 Deposits services and other 25,922 22,013 20,388 Deposits revenue 104,134 86,561 75,517 Identity verification software and hardware 10,162 8,380 4,940 Identity verification services and other 58,256 49,863 39,340 Identity verification revenue 68,418 58,243 44,280 Total revenue $ 172,552 $ 144,804 $ 119,797 Contract Balances The following table provides information about contract assets and contract liabilities from contracts with customers ( amounts in thousands ) as of September 30, 2023 and 2022: September 30, 2023 September 30, 2022 Contract assets, current $ 18,355 $ 7,037 Contract assets, non-current 5,579 4,218 Contract liabilities (deferred revenue), current 17,360 21,350 Contract liabilities (deferred revenue), non-current 957 1,775 Contract assets reported within a separate line in current assets and the other non-current assets line in the consolidated balance sheets, primarily result from when the right to consideration is conditional upon factors other than the passage of time. Contract liabilities primarily relate to advance consideration received from customers (deferred revenue), for which transfer of control occurs, and therefore revenue is recognized as services are provided. Contract balances are reported in a net contract asset or liability position on a contract-by-contract basis at the end of each reporting period. The Company recognized $19.3 million and $10.9 million of revenue during the twelve months ended September 30, 2023 and 2022, respectively, which was included in the contract liability balance at the beginning of each such period. Unbilled receivables are included within accounts receivable, net on the consolidated balance sheets and were $0.9 million and $1.7 million as of September 30, 2023 and 2022, respectively. Transaction Price Allocated to the Remaining Performance Obligations As of September 30, 2023, the aggregate amount of the transaction price allocated to the remaining performance obligations that were unsatisfied or partially unsatisfied was $18.3 million, which is recorded as deferred revenue on the Company’s consolidated balance sheets. Of that amount, $17.4 million will be recognized as revenue during the year ended September 30, 2024, and $1.0 million thereafter. As of September 30, 2022, the aggregate amount of the transaction price allocated to the remaining performance obligations that were unsatisfied or partially unsatisfied was $23.1 million, which is recorded as deferred revenue on the Company’s consolidated balance sheets. Of that amount, $21.4 million was expected to be recognized as revenue during the year ended September 30, 2023, and $1.8 million thereafter. Contract Costs Contract costs included in other current and non-current assets on the consolidated balance sheets totaled $2.6 million and $2.4 million at September 30, 2023 and 2022, respectively. Contract costs are amortized based on the transfer of goods or services to which the asset relates. The amortization period also considers expected customer lives and whether the asset relates to goods or services transferred under a specific anticipated contract. These costs are included in selling and marketing expenses in the consolidated statement of operations and other comprehensive income (loss) and totaled $1.5 million and $1.3 million during the twelve months ended September 30, 2023 and 2022, respectively. There were no impairment losses recognized during the twelve months ended September 30, 2023 and 2022 related to capitalized contract costs. |
BUSINESS COMBINATIONS
BUSINESS COMBINATIONS | 12 Months Ended |
Sep. 30, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
BUSINESS COMBINATIONS | 3. BUSINESS COMBINATIONS Acquisition of ID R&D, Inc. On May 28, 2021 (the “Closing Date”), the Company completed the ID R&D Acquisition pursuant to an Agreement and Plan of Merger (the “Merger Agreement”) dated May 28, 2021, by and among the Company, ID R&D and Alexey Khitrov (the “Representative”). Upon completion of the ID R&D Acquisition, ID R&D became a direct wholly owned subsidiary of Mitek Systems, Inc. ID R&D is an award-winning provider of artificial intelligence-based voice and face biometrics and liveness detection. As consideration for the ID R&D Acquisition, the Company agreed to pay an aggregate purchase price of up to $49.0 million. On the Closing Date, the equityholders of ID R&D received from the Company: (i) $13.0 million in cash, subject to adjustments for transaction expenses, escrow amounts, indebtedness and working capital adjustments (the “Initial Cash Payment”); and (ii) 867,226 shares, or $13.9 million, of Common Stock. In addition to the foregoing, the equityholders of ID R&D may become entitled to receive additional consideration from the Company upon achievement of certain milestones as follows (collectively, the “Earnout Payments”): subject to ID R&D’s achievement of target revenue for the period commencing on the Closing Date and ending on the one year anniversary thereof and the period commencing on the one year anniversary of the Closing Date and ending on the one year anniversary thereof (each such period, an “Earnout Period”): (i) an aggregate maximum amount of approximately $12.3 million with respect to the first Earnout Period and (ii) approximately $9.8 million with respect to the second Earnout Period, with 15% of the first Earnout Period’s payment to be deposited (as additional funds) into an escrow fund. The Company will make the Earnout Payments in the form of cash and up to 711,535 shares of Common Stock as set forth in the Merger Agreement. The Company has granted the Representative an option to shift the Earnout Period(s) out by one year, pursuant to the terms of the Merger Agreement. Moreover, in the event actual revenue for an Earnout Period exceeds the target revenue for such period, the amount of such excess will be credited towards the achievement of the subsequent Earnout Period’s Earnout Payment. In May and June of 2022, the Company paid the first of the Earnout Payments of an aggregate of $9.5 million which consisted of $7.7 million paid in cash and $1.8 million in shares of Common Stock to the equityholders of ID R&D. Pursuant to the Merger Agreement, 15% of the Earnout Payments with respect to the first Earnout Period, were deposited into the escrow fund which consisted of both cash and Common Stock. The Company released the cash and shares held in escrow in the fourth quarter of fiscal 2023. The second Earnout Period ended in May 2023 and the Representative did not exercise their option to shift the Earnout Period. In the first quarter of fiscal 2024, the Company paid the second Earnout Payment of an aggregate $8.0 million which consisted of $4.7 million paid in cash and $3.3 million in shares of Common Stock to the equityholders of ID R&D. The Company estimated the fair value of the consideration for the Earnout Periods to be $15.7 million on the Closing Date, which was determined using a discounted cash flow methodology based on financial forecasts determined by management that included assumptions about revenue growth and discount rates, and is included in level three of the fair value hierarchy. Each quarter, the Company revised the estimated fair value of the consideration for the Earnout Periods. Accordingly, the Company recognized an expense of $2.1 million and gain of $1.4 million in amortization and acquisition-related costs in the consolidated statements of operations and other comprehensive income (loss) for the twelve months ended September 30, 2023 and 2022, respectively. The Company incurred $0.6 million of expense in connection with the acquisition primarily related to legal fees, outside service costs, and travel expense, which are included in amortization and acquisition-related costs in the consolidated statements of operations and other comprehensive income (loss). On the Closing Date, the Company deposited a portion of the Initial Cash Payment and a number of shares of Common Stock having a collective value of approximately $4.0 million into an escrow fund to serve as collateral and partial security for working capital adjustments and certain indemnification rights of the Company. As indicated above, 15% of the Earnout Payment with respect to the first Earnout Period was also be deposited into the escrow fund. The escrow fund was released to the equityholders of ID R&D in the fourth quarter of fiscal 2023. The Company used cash on hand for the Initial Cash Payment. Acquisition of HooYu Ltd. On March 23, 2022, the Company completed the acquisition (“HooYu Acquisition”) of HooYu Ltd (“HooYu”) pursuant to the Purchase Agreement (the “Purchase Agreement”) dated March 23, 2022, by and among the Company and certain persons identified in the Purchase Agreement (the “Sellers”). Pursuant to the Purchase Agreement, the Company, among other things, acquired 100% of the outstanding share capital of HooYu, a leading global customer onboarding platform designed to increase the integrity of KYC and maximize the success of customer onboarding. As consideration for the HooYu Acquisition, the Company paid aggregate consideration in the amount of $129.1 million (the “Closing Consideration”), as such amount may be adjusted for transaction expenses and indebtedness. Pursuant to the Purchase Agreement, $1.6 million was withheld as a reduction to the Closing Consideration and was retained by the Company for the final working capital adjustments and indemnification of certain tax matters under the Purchase Agreement. The Company incurred $3.2 million of expense in connection with the acquisition primarily related to legal fees, outside service costs, foreign currency and realized losses on investments, and travel expense, which are included in amortization and acquisition-related costs in the consolidated statements of operations and other comprehensive income (loss). On March 23, 2022, using cash on hand, the Company transferred an aggregate of $127.5 million to the Sellers and its third-party legal and investment advisors, net of cash acquired of $0.5 million. In July 2022 the Company paid an additional $0.4 million to the Sellers in settling final working capital. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed from the ID R&D Acquisition and HooYu Acquisition as of September 30, 2023 ( amounts in thousands ): ID R&D HooYu Accounts receivable $ 173 $ 1,234 Property, plant, and equipment 114 504 Other current assets 147 630 Intangible assets 16,930 73,100 Goodwill 27,748 74,206 Current liabilities (425) (2,264) Deferred revenue — (2,612) Deferred income tax liabilities (2,355) (16,896) Net assets acquired $ 42,332 $ 127,902 The goodwill recognized is due to expected market participant synergies and other factors and is not expected to be deductible for income tax purposes. The Company estimated the fair value of identifiable acquisition-related intangible assets with definite lives primarily based on discounted cash flow projections that were estimated to arise from these assets. The Company exercised significant judgment with regard to assumptions used in the determination of fair value such as with respect to revenue growth rates, discount rates and the determination of the estimated useful lives of the intangible assets. The following table summarizes the estimated fair values and estimated useful lives of intangible assets with definite lives acquired from the ID R&D Acquisition and HooYu Acquisition during the twelve months ended September 30, 2023 ( amounts in thousands, except for years ): ID R&D Amortization Period Amount assigned Completed technologies 7.0 years $ 14,020 Customer relationships 3.0 years 2,540 Trade name 5.0 years 370 Total intangible assets acquired $ 16,930 HooYu Amortization Period Amount assigned Completed technologies 7.0 years $ 61,400 Customer relationships 5.0 years 5,000 Trade name 5.0 years 6,100 Covenants not to compete 3.0 years $ 600 Total intangible assets acquired $ 73,100 The following unaudited pro forma financial information should not be taken as representative of the Company’s future consolidated results of operations and includes adjustments for the amortization expense related to the identified intangible assets. The following table summarizes the Company’s unaudited pro forma financial information and is presented as if the ID R&D Acquisition and HooYu Acquisition occurred on October 1, 2020 and 2021, respectively ( amounts shown in thousands ): For the twelve months ended September 30, 2022 2021 Pro forma revenue $ 149,679 $ 130,302 Pro forma net income (loss) $ (6,683) $ (8,516) The following table summarizes the results of ID R&D and HooYu that are included in the Company’s consolidated results (amounts shown in thousands): For the twelve months ended September 30, 2022 2021 ID R&D Revenue $ 5,663 $ 849 Net Income (loss) $ (3,769) $ (3,021) HooYu Revenue $ 5,738 Net Income (loss) $ (1,587) |
RESTRUCTURING
RESTRUCTURING | 12 Months Ended |
Sep. 30, 2023 | |
Restructuring and Related Activities [Abstract] | |
RESTRUCTURING | 4. RESTRUCTURING In order to streamline the organization and focus resources going forward, the Company undertook strategic restructurings in June and November 2022, which included reductions in workforce. Restructuring costs consist of employee severance obligations and other related costs. The following table summarizes changes in the restructuring accrual during the twelve months ended September 30, 2023 (amounts in thousands) : Balance at September 30, 2022 $ 901 Additional costs incurred 2,109 Payments (3,070) Foreign currency effect on the restructuring accrual 60 Balance at September 30, 2023 $ — |
INVESTMENTS
INVESTMENTS | 12 Months Ended |
Sep. 30, 2023 | |
Investments, Debt and Equity Securities [Abstract] | |
INVESTMENTS | 5. INVESTMENTS 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 September 30, 2023 and 2022, the Company’s short-term investments have maturity dates of less than one year from the balance sheet date. 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 (loss). No other-than-temporary impairment charges were recognized in the twelve months ended September 30, 2023, 2022, and 2021. The Company had no realized gain or loss from the sale of available-for-sale securities during the twelve months ended September 30, 2023. The Company realized a $0.3 million loss from the sale of available-for-sale securities during the twelve months ended September 30, 2022. There were no realized gains or losses from the sale of available-for-sale securities during the twelve months ended September 30, 2021. The cost of securities sold is based on the specific identification method. Amortization of premiums, accretion of discounts, interest, dividend income, and realized gains and losses are included in other income, net in the consolidated statements of operations and other comprehensive income (loss). The following tables summarize investments by type of security as of September 30, 2023 and 2022, respectively (amounts in thousands ): September 30, 2023: Cost Gross Unrealized Gains Gross Unrealized Losses Fair Market Value Available-for-sale securities: U.S. Treasury, short-term $ 40,329 $ 1 $ (76) $ 40,254 Corporate debt securities, short-term 34,545 — (99) 34,446 U.S. Treasury, long-term 1,371 — (67) 1,304 Total $ 76,245 $ 1 $ (242) $ 76,004 September 30, 2022: Cost Gross Gross Fair Market Available-for-sale securities: U.S. Treasury, short-term $ 6,016 $ — $ (134) $ 5,882 Foreign government and agency securities, short-term 2,865 — (38) $ 2,827 Commercial paper, short-term 18,245 — (223) 18,022 Corporate debt securities, short-term 32,065 — (528) 31,537 U.S. Treasury, long-term 3,431 — (210) 3,221 Corporate debt securities, long-term 7,692 — (280) 7,412 Total $ 70,314 $ — $ (1,413) $ 68,901 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, that may be used to measure fair value which consists of the following: • 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 September 30, 2023 and 2022, respectively (amounts in thousands): September 30, 2023 Balance Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Short-term investments: U.S. Treasury $ 40,254 $ 40,254 $ — $ — Corporate debt securities 34,446 — 34,446 — Total short-term investments at fair value 74,700 40,254 34,446 — Long-term investments: U.S. Treasury 1,304 1,304 — — Total long-term investments at fair value 1,304 1,304 — — Total assets at fair value $ 76,004 $ 41,558 $ 34,446 $ — Liabilities: Current liabilities: Acquisition-related contingent consideration $ 7,976 $ — $ 7,976 $ — Total liabilities at fair value $ 7,976 $ — $ 7,976 $ — September 30, 2022 Balance Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Short-term investments: U.S. Treasury $ 5,882 $ 5,882 $ — $ — Commercial paper 18,022 — 18,022 — Foreign government and agency securities 2,827 — 2,827 — Corporate debt securities 31,537 — 31,537 — Total short-term investments at fair value 58,268 5,882 52,386 — Long-term investments: U.S. Treasury 3,221 3,221 — — Corporate debt securities 7,412 — 7,412 — Total long-term investments at fair value 10,633 3,221 7,412 — Total assets at fair value $ 68,901 $ 9,103 $ 59,798 $ — Liabilities: Current liabilities: Acquisition-related contingent consideration $ 5,920 $ — $ — $ 5,920 Total liabilities at fair value $ 5,920 $ — $ — $ 5,920 • Level 1: Includes investments in U.S. Government and agency securities, which are valued based on recently executed transactions in the same or similar securities. • Level 2: Convertible Senior Notes and corporate debt securities. Corporate debt securities are valued using quoted prices for similar assets or liabilities, quoted prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. On February 5, 2021, the Company issued the 2026 Notes as further described in Note 9. Concurrently with the issuance of the 2026 Notes, the Company entered into the Notes Hedge and Warrant Transactions which in combination are intended to reduce the potential dilution from the conversion of the 2026 Notes (see Note 9). The fair value of the Notes Hedge and the embedded conversion derivative were estimated using a Black-Scholes model. Based on the fair value hierarchy, the Company classified the Notes Hedge and the embedded conversion derivative as Level 2 as significant inputs are observable, either directly or indirectly. The significant inputs and assumptions used in the models to calculate the fair value of the derivatives include the Common Stock price, exercise price of the derivatives, risk-free interest rate, volatility, annual coupon rate and remaining contractual term. As of September 30, 2023, total acquisition-related contingent consideration of $8.0 million is recorded in acquisition-related contingent consideration in the consolidated balance sheets. The Company recorded the acquisition date fair value based on the likelihood of contingent earnout payments related to the Company’s acquisition of ID R&D, as part of the consideration transferred. The earnout payments consist of cash payments and issuances of Common Stock and are subsequently remeasured to fair value each reporting date. The Company used a Monte Carlo Simulation to estimate fair value of total contingent consideration. Additionally, for contingent consideration to be settled in a variable number of shares of Common Stock, the Company used the most recent Mitek share price as reported by the Nasdaq Capital Market to determine the fair value of the shares expected to be issued. The Company previously classified the contingent consideration as Level 3, due to the lack of relevant observable inputs and market activity. The second earnout period ended on May 28, 2023 and the value recorded as of September 30, 2023 is based on the calculated final payout and the Company reclassified the contingent consideration as Level 2 during the third quarter of fiscal year 2023. The following table includes a roll-forward of the contingent consideration liability during the twelve months ended September 30, 2023 (amounts in thousands): Balance at September 30, 2022 $ 5,920 Expenses recorded due to changes in fair value 2,056 Balance at September 30, 2023 $ 7,976 The following tables summarize the quantitative information including the unobservable inputs related to our acquisition-related contingent consideration as of September 30, 2022 (amounts in thousands) : Fair Value at September 30, 2022 Valuation Technique Unobservable Input Input Used Acquisition-related contingent consideration $ 5,920 Monte Carlo simulation Weighted-average cost of capital 14.80 % Revenue weight-average cost of capital 4.40 % Revenue volatility 0.20 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 12 Months Ended |
Sep. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | 6. GOODWILL AND INTANGIBLE ASSETS Goodwill The Company had a goodwill balance of $123.5 million and $115.6 million at September 30, 2023 and 2022, respectively, representing the excess of costs over fair value of assets of businesses acquired. The following table summarizes changes in the balance of goodwill during the twelve months ended September 30, 2023 ( amounts in thousands ): Balance at September 30, 2022 $ 115,632 Foreign currency effect on goodwill 7,916 Balance at September 30, 2023 $ 123,548 Intangible Assets Intangible assets include the value assigned to purchased completed technology, customer relationships, trade names, and covenants not to compete. The estimated useful lives for all of these intangible assets range from three (amounts in thousands, except for years): September 30, 2023: Weighted Average Amortization Period (in years) Cost Accumulated Amortization Net Completed technologies 6.9 years $ 95,761 $ 39,254 $ 56,507 Customer relationships 4.7 years 25,168 21,396 3,772 Trade names 5.0 years 7,088 2,967 4,121 Covenants not to compete 3.0 years $ 600 $ 326 274 Total intangible assets $ 128,617 $ 63,943 $ 64,674 September 30, 2022: Weighted Average Amortization Period (in years) Cost Accumulated Amortization Net Completed technologies 6.9 years $ 95,761 $ 32,265 $ 63,496 Customer relationships 4.7 years 25,168 18,241 6,927 Trade names 5.0 years 7,088 2,174 4,914 Covenants not to compete 3.0 years 600 181 419 Total intangible assets $ 128,617 $ 52,861 $ 75,756 Amortization expense related to acquired intangible assets was $17.0 million, $13.5 million, and $7.5 million for twelve months ended September 30, 2023, 2022, and 2021, respectively, and is recorded within amortization and acquisition-related costs on the consolidated statements of operations and other comprehensive income (loss). The estimated future amortization expense related to intangible assets for each of the five succeeding fiscal years is expected to be as follows (amounts in thousands): Estimated Future Amortization Expense 2024 14,650 2025 13,404 2026 12,207 2027 11,095 2028 9,418 Thereafter 3,900 Total $ 64,674 |
STOCKHOLDERS_ EQUITY
STOCKHOLDERS’ EQUITY | 12 Months Ended |
Sep. 30, 2023 | |
Equity [Abstract] | |
STOCKHOLDERS' EQUITY | 7. STOCKHOLDERS’ EQUITY Stock-Based Compensation Expense The following table summarizes stock-based compensation expense related to RSUs, stock options, and ESPP shares for the twelve months ended September 30, 2023, 2022, and 2021, which were allocated as follows (amounts in thousands): 2023 2022 2021 Cost of revenue $ 468 $ 289 $ 339 Selling and marketing 3,023 4,383 3,399 Research and development 2,757 3,701 3,218 General and administrative 4,215 4,973 4,576 Stock-based compensation expense included in expenses $ 10,463 $ 13,346 $ 11,532 No options were granted in the twelve months ended September 30, 2023 or 2022. As of September 30, 2023, the Company had $20.3 million of unrecognized compensation expense related to outstanding stock options and RSUs expected to be recognized over a weighted-average period of approximately 2.3 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 September 30, 2023, (i) 1,834,474 RSUs and 730,393 performance-based restricted stock unit awards (“Performance RSUs”) were outstanding under the 2020 Plan, (ii) 1,425,042 shares of Common Stock were reserved for future grants under the 2020 Plan, and (iii) stock options to purchase an aggregate of 434,090 shares of Common Stock and 94,309 RSUs were outstanding under the Prior Plans. On October 2, 2023, the Company held an annual meeting of its stockholders (the “Annual Meeting”). At the Annual Meeting, the Company’s stockholders approved an amendment and restatement of the 2020 Plan to increase the number of shares authorized for issuance thereunder by 5,108,000 shares (the 2020 Plan as so amended and restated, the “A&R 2020 Plan”). The A&R 2020 Plan had been previously approved, subject to stockholder approval, by the Company’s Board of Directors (the “Board”), upon recommendation of the Compensation Committee of the Board, on August 9, 2023. A summary of the A&R 2020 Plan was included in the Company’s definitive proxy statement for the Annual Meeting filed with the U.S. Securities and Exchange Commission on August 22, 2023, as supplemented and amended on September 19, 2023 (the “Proxy Statement”). Employee Stock Purchase Plan In January 2018, the Board adopted the ESPP. On March 7, 2018, the Company’s stockholders approved the ESPP. The total number of shares of Common Stock reserved for issuance thereunder is 1,000,000 shares. As of September 30, 2023, (i) 729,124 shares have been issued to participants pursuant to the ESPP and (ii) 270,876 shares of Common Stock were reserved for future purchases under the ESPP. The Company commenced the initial offering period on April 2, 2018. The ESPP enables eligible employees to purchase shares of Common Stock at a discount from the market price through payroll deductions, subject to certain limitations. Eligible employees may elect to participate in the ESPP only during an open enrollment period. The offering period immediately follows the open enrollment window, at which time ESPP contributions are withheld from the participant's regular paycheck. The ESPP provides for a 15% discount on the market value of the stock at the lower of the grant date price (first day of the offering period) and the purchase date price (last day of the offering period). The Company recognized $0.3 million, $0.4 million and $0.6 million in stock-based compensation expense related to the ESPP during each of the twelve months ended September 30, 2023, 2022, and 2021, respectively. Director Restricted Stock Unit Plan In January 2011, the Board adopted the Mitek Systems, Inc. Director Restricted Stock Unit Plan, as amended and restated (the “Director Plan”). On March 10, 2017, the Company's stockholders approved an amendment to the Director Plan to increase the number of shares of Common Stock available for future grants. The total number of shares of Common Stock reserved for issuance thereunder is 1,500,000 shares. The Director Plan expired on December 31, 2022. As of September 30, 2023, (i) 259,513 RSUs were outstanding under the Director Plan and (ii) no shares of Common Stock were reserved for future grants under the Director Plan. Stock Options The following table summarizes stock option activity under the Company’s equity plans during the twelve months ended September 30, 2023, 2022, and 2021: 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 (329,878) $ 7.63 $ 2,670 Canceled (15,910) $ 9.41 Outstanding at September 30, 2021 816,717 $ 7.42 5.8 $ 9,046 Granted — $ — Exercised (35,625) $ 6.68 $ 279 Canceled — $ — Outstanding at September 30, 2022 781,092 $ 7.46 3.7 $ 1,512 Granted — $ — Exercised (98,952) $ 7.44 $ 338 Canceled (30,871) $ 9.49 Outstanding at September 30, 2023 651,269 $ 7.37 3.6 $ 2,185 Vested and Expected to Vest at September 30, 2023 651,269 $ 7.37 3.6 $ 2,185 Exercisable at September 30, 2023 647,884 $ 7.35 3.6 $ 2,181 The Company recognized $0.4 million, $0.5 million, and $0.7 million in stock-based compensation expense related to outstanding stock options during the twelve months ended September 30, 2023, 2022, and 2021, respectively. As of September 30, 2023, the Company had $9,000 of unrecognized compensation expense related to outstanding stock options expected to be recognized over a weighted-average period of approximately 0.1 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. There were no options granted during either of the twelve months ended September 30, 2023, 2022, or 2021. Restricted Stock Units The following table summarizes RSU activity under the Company’s equity plans during the twelve months ended September 30, 2023, 2022, and 2021: Number of Shares Weighted- Average Fair Value Per Share Outstanding at September 30, 2020 2,661,943 $ 7.95 Granted 887,049 $ 13.35 Settled (975,764) $ 7.64 Canceled (161,961) $ 8.94 Outstanding at September 30, 2021 2,411,267 $ 9.99 Granted 1,272,917 $ 14.43 Settled (898,178) $ 9.57 Canceled (344,329) $ 11.16 Outstanding at September 30, 2022 2,441,677 $ 12.29 Granted 1,101,925 $ 10.24 Settled (665,635) $ 11.33 Canceled (689,671) $ 12.49 Outstanding at September 30, 2023 2,188,296 $ 11.49 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 $7.1 million, $9.4 million, and $8.1 million in stock-based compensation expense related to outstanding RSUs in the twelve months ended September 30, 2023, 2022, and 2021, respectively. As of September 30, 2023, the Company had $16.7 million of unrecognized compensation expense related to outstanding RSUs, which is expected to be recognized over a weighted-average period of approximately 2.5 years. Performance Restricted Stock Units The following table summarizes Performance RSU activity under the Company’s equity plans during the twelve months ended September 30, 2023, 2022, and 2021: 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 (90,345) $ 6.06 Canceled (19,252) $ 6.06 Outstanding at September 30, 2021 528,724 $ 9.17 Granted 629,279 $ 15.60 Settled (176,864) $ 8.42 Canceled (61,683) $ 13.51 Outstanding at September 30, 2022 919,456 $ 13.43 Granted 325,837 $ 10.23 Settled (27,245) $ 9.25 Canceled (487,655) $ 11.61 Outstanding at September 30, 2023 730,393 $ 13.37 The cost of Performance RSUs is determined using a Monte Carlo simulation to estimate the fair value on the award date, and the compensation expense is recognized ratably over the vesting period. The Company recognized $2.7 million, $3.0 million, and $1.3 million in stock-based compensation expense related to outstanding Performance RSUs in the twelve months ended September 30, 2023, 2022, and 2021, respectively. As of September 30, 2023, the Company had $3.4 million of unrecognized compensation expense related to outstanding RSUs expected to be recognized over a weighted-average period of approximately 1.7 years. Performance Options On November 6, 2018, as an inducement grant pursuant to Nasdaq Listing Rule 5635(c)(4), the Company’s Chief Executive Officer was granted performance options (the “Performance Options”) to purchase up to 800,000 shares of Common Stock at an exercise price of $9.50 per share, the closing market price for a share of Common Stock on the date of the grant. During the fiscal year ended September 30, 2021, the performance conditions were achieved. In November 2021, the time vesting condition was met and the performance options vested in full. The Company recognized $0.1 million and $0.8 million in stock-based compensation expense related to outstanding Performance Options in the twelve months ended September 30, 2022 and 2021, respectively. The Company did not recognize any stock-based compensation expense related to outstanding performance options for the twelve months ended September 30, 2023. Share Repurchase Program On June 15, 2021, the Board authorized and approved a share repurchase program for up to $15 million of the currently outstanding shares of our Common Stock. The share repurchase program was completed during the second quarter of fiscal 2022 and as such the Company made no purchase during the twelve months ended September 30, 2023. The Company made purchases of $14.8 million, or approximately 886,204 shares, during twelve months ended September 30, 2022 at an average price of $16.73 per share and subsequently retired the shares. The share repurchase program expired on June 30, 2022 and as such no purchases were made after this date. The timing, price and volume of repurchases were based on market conditions, relevant securities laws and other factors. The repurchases were made from time to time, through solicited or unsolicited transactions in the open market, in privately negotiated transactions or pursuant to a share repurchase trading plan. 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. 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. The Rights expired on October 22, 2021 and no Rights were redeemed or exchanged. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Sep. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | 8. INCOME TAXES Provision for Income Taxes Income before income taxes for the twelve months ended September 30, 2023, 2022, and 2021 is comprised of the following ( amounts in thousands ): 2023 2022 2021 Domestic $ 23,836 $ 11,483 $ 10,966 Foreign (13,495) (7,881) (2,164) Total $ 10,341 $ 3,602 $ 8,802 For the twelve months ended September 30, 2023, 2022, and 2021 the income tax benefit (provision) was as follows (amounts in thousands): 2023 2022 2021 Current: Federal $ (4,414) $ (233) $ — State (1,215) (325) (78) Foreign (1,023) (1,800) (1,119) Total current provision for income taxes (6,652) (2,358) (1,197) Deferred: Federal (659) (1,400) (1,387) State 819 513 457 Foreign 4,178 3,337 1,303 Total deferred provision for income taxes 4,338 2,450 373 Total tax benefit (expense) $ (2,314) $ 92 $ (824) Deferred Income Tax Assets and Liabilities Significant components of the Company’s net deferred tax assets and liabilities as of September 30, 2023 and 2022 are as follows (amounts in thousands): 2023 2022 Deferred tax assets: Stock-based compensation $ 2,357 $ 1,793 Net operating loss carryforwards 11,548 6,656 Research credit carryforwards 4,336 7,747 Lease liability 1,185 859 Intangibles 4,606 — Other, net 852 1,117 Total deferred assets 24,884 18,172 Deferred tax liabilities: Right of use asset (1,032) (633) Intangibles (15,914) (14,139) Total deferred liabilities (16,946) (14,772) Valuation allowance for net deferred tax assets (2,769) (2,868) Net deferred tax asset $ 5,169 $ 532 The net change in the total valuation allowance for the twelve months ended September 30, 2023 and 2022 was a decrease of $0.1 million and an increase of $2.1 million, respectively. There was no material change in the total valuation allowance during the twelve months ended September 30, 2023. The valuation allowance increased due to foreign losses incurred in the twelve months ended September 30, 2022. In assessing the realizability of deferred tax assets, the Company considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during periods in which those temporary differences become deductible. The Company considers projected future taxable income and planning strategies in making this assessment. Based on the level of historical operating results and the projections for future taxable income, the Company has determined that it is more likely than not that the deferred tax assets will be realized with the exception of the net foreign deferred tax assets for certain foreign entities. During the year ended September 30, 2022 the Company completed the HooYu Acquisition, as detailed in Note 3 which increased deferred tax liabilities related to intangible assets. As of September 30, 2023, the Company has no available net operating loss carryforwards for federal income tax purposes. The net operating losses for state purposes are $25.2 million, which will begin to expire in 2032. As of September 30, 2023, the Company has no available federal research and development credit carryforwards as the Company fully utilized all federal research and development credits. As of September 30, 2023, the Company has available California research and development credit carryforwards, net of reserves, of $4.4 million, which do not expire. As of September 30, 2023, the Company has available foreign research and development credit carryforwards of $0.8 million, which will begin to expire in 2037. Sections 382 and 383 of the Internal Revenue Code of 1986, as amended (the “IRC”) limit the utilization of tax attribute carryforwards that arise prior to certain cumulative changes in a corporation’s ownership. The Company has completed an IRC Section 382/383 analysis through March 31, 2017 and any identified ownership changes had no impact to the utilization of tax attribute carryforwards. Any future ownership changes may have an impact on the utilization of the tax attribute carryforwards. Earnings from the Company's foreign subsidiaries are considered to be indefinitely reinvested. A distribution of these non-U.S. earnings in the form of dividends or otherwise would subject the Company to foreign withholding taxes and may subject the Company to U.S. federal and state taxes. Income Tax Provision Reconciliation The difference between the income tax benefit (provision) and income taxes computed using the U.S. federal income tax rate was as follows for the twelve months ended September 30, 2023, 2022, and 2021 (amounts shown in thousands): 2023 2022 2021 Amount computed using statutory rate $ (2,172) $ (756) $ (1,849) Net change in valuation allowance for net deferred tax assets 292 (1,702) (19) Other (477) 1,605 — Foreign rate differential 504 268 13 Non-deductible items (14) (64) (141) Transaction costs — (411) — State income tax (100) 251 (276) Research and development credits 791 1,166 1,248 Foreign income tax — — (15) Contingent consideration (432) 285 — Uncertain tax positions (184) (318) — Stock compensation, net (522) (232) 215 Income tax (provision) benefit $ (2,314) $ 92 $ (824) Uncertain Tax Positions In accordance with authoritative guidance, the Company recognizes the benefit of uncertain income tax positions only if those positions are more likely than not of being sustained. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. The following table reconciles the beginning and ending amount of unrecognized tax benefits for the twelve months ended September 30, 2023, 2022, and 2021 (amounts shown in thousands): 2023 2022 2021 Gross unrecognized tax benefits at the beginning of the year $ 2,664 $ 2,114 $ 1,810 Additions from tax positions taken in the current year 330 484 268 Additions from tax positions taken in prior years — 66 36 Reductions from tax positions taken in prior years (9) — — Gross unrecognized tax benefits at end of the year $ 2,985 $ 2,664 $ 2,114 Of the total unrecognized tax benefits at September 30, 2023, $2.4 million will impact the Company’s effective tax rate. The Company does not anticipate that there will be a substantial change in unrecognized tax benefits within the next twelve months. The Company's practice is to recognize interest and/or penalties related to income tax matters in income tax expense. As of September 30, 2023, no accrued interest or penalties related to uncertain tax positions are recorded in the consolidated financial statements. The Company is subject to income taxation in the U.S. at the federal and state levels. All tax years are subject to examination by U.S., California, and other state tax authorities due to the carryforward of unutilized net operating losses and tax credits. The Company is also subject to foreign income taxes in the countries in which it operates. To the Company’s knowledge, the Company is not currently under examination by any other taxing authorities. |
CONVERTIBLE SENIOR NOTES
CONVERTIBLE SENIOR NOTES | 12 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
CONVERTIBLE SENIOR NOTES | 9. CONVERTIBLE SENIOR NOTES The carrying values of the 0.75% convertible notes due 2026 issued by the Company in an aggregate principal amount of $155.3 million (the “2026 Notes”) are as follows ( amounts in thousands ): September 30, 2023 September 30, 2022 2026 Notes: Principal amount $ 155,250 $ 155,250 Less: unamortized discount and issuance costs, net of amortization (19,734) (27,280) Carrying amount $ 135,516 $ 127,970 In February 2021, the Company issued $155.3 million aggregate principal amount of the 2026 Notes (including the Additional Notes, as defined below). The 2026 Notes are senior unsecured obligations of the Company. The 2026 Notes were issued pursuant to an indenture, dated February 5, 2021 (the “Indenture”), between the Company and UMB Bank, National Association, as trustee. The Indenture includes customary covenants and sets forth certain events of default after which the 2026 Notes may be declared immediately due and payable and sets forth certain types of bankruptcy or insolvency events of default involving the Company after which the 2026 Notes become automatically due and payable. The Company granted the initial purchasers of the 2026 Notes (collectively, the “Initial Purchasers”) a 13-day option to purchase up to an additional $20.3 million aggregate principal amount of the 2026 Notes (the “Additional Notes”), which was exercised in full. The 2026 Notes were purchased in a transaction that was completed on February 5, 2021. As of January 13, 2023 (“Date of Noncompliance”), the Company was not in compliance with certain of the covenants in the Indenture as a result of the Company not timely filing its Form 10-K for the fiscal year ended September 30, 2022 (“Form 10-K”)and the Form 10-Q for the quarter ended December 31, 2022 (“Q1 Form 10-Q”) with the SEC. As a result of not being in compliance, the 2026 Notes began to accrue additional special interest of 0.25% of the outstanding principal of the 2026 Notes for the 90 days after the Date of Noncompliance and 0.50% of the outstanding principal of the 2026 Notes for the 91st through 180th day after the Date of Noncompliance. The Company subsequently did not timely file its Form 10-Q for the quarter ended March 31, 2023 (“Q2 Form 10-Q”) and its Form 10-Q for the quarter ended June 30, 2023 (“Q3 Form 10-Q”). The Company then filed its Form 10-K with the SEC on July 31, 2023, its Q1 Form 10-Q with the SEC on September 6, 2023, and its Q2 Form 10-Q with the SEC on September 29, 2023. As a result, the Company was no longer required to accrue additional special interest. As of February 15, 2024, the Company was not in compliance with certain covenants in the Indenture as a result of not timely filing its Form 10-Q for the quarter ended December 31, 2023 with the SEC. In December 2023, the Company was notified that we were not in compliance with the Nasdaq listing rules as a result of the failure to timely file the Company’s Form 10-K for the year ended September 30, 2023 , and the Nasdaq issued a delisting determination. The Company requested and received a stay pending a hearing to occur on March 19, 2024. The Company has a panel hearing with the Nasdaq on March 19, 2024 to review the Company’s request to extend the stay of suspension of the Company’s common stock from the Nasdaq. The Company’s common stock will continue to trade on the Nasdaq Capital Market under the symbol “MITK” until the Panel issues its decision following the hearing and through the expiration of any additional extension period granted by the Panel. The Panel has discretion to grant an exception for up to 180 days after the Nasdaq Staff’s initial delisting decision. There can be no assurance that the Panel will grant the Company’s request for a stay pending the hearing process or any further extension following the hearing or continued listing. If the Company’s common stock ceases to be listed for trading on the Nasdaq the Company could be in default under the covenants within the 2026 Notes which could result in the Company’s debt becoming due and payable earlier than the maturity date. If the notes are called, the Company would seek a refinancing of all or a portion of the notes, repay the notes, or a combination of these actions. The 2026 Notes will mature on February 1, 2026, unless earlier redeemed, repurchased or converted. The 2026 Notes bear interest from February 5, 2021 at a rate of 0.750% per year, payable semiannually in arrears on February 1 and August 1 of each year, beginning on August 1, 2021. The 2026 Notes will be convertible at the option of the holders at any time prior to the close of business on the business day immediately preceding August 1, 2025, only under the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on June 30, 2021, if the last reported sale price per share of Common Stock exceeds 130% of the conversion price for each of at least 20 trading days during the 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter; (2) during five consecutive business days immediately after any five consecutive trading day period (such five consecutive trading day period, the “measurement period”) in which the trading price per $1,000 principal amount of notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price per share of the Common Stock on such trading day and the conversion rate on such trading day; (3) upon the occurrence of certain corporate events or distributions on the Common Stock. On or after August 1, 2025, until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert all or any portion of their 2026 Notes, in multiples of $1,000 principal amount, at the option of the holder regardless of the foregoing circumstances. Upon conversion, the Company may satisfy its conversion obligation by paying and/or delivering, as the case may be, cash and, if applicable at the Company’s election, shares of the Common Stock, based on the applicable conversion rate(s); provided that the Company will be required to settle conversions solely in cash unless and until the Company (i) receives stockholder approval to increase the number of authorized shares of the Common Stock and (ii) reserves such amount of shares of the Common Stock for future issuance as required pursuant to the Indenture that governs the 2026 Notes. The conversion rate for the 2026 Notes will initially be 47.9731 shares of the Common Stock per $1,000 principal amount of 2026 Notes, which is equivalent to an initial conversion price of approximately $20.85 per share of the Common Stock. The initial conversion price of the 2026 Notes represents a premium of approximately 37.5% to the $15.16 per share last reported sale price of the Common Stock on February 2, 2021. The conversion rate is subject to adjustment under certain circumstances in accordance with the terms of the Indenture. The net proceeds from this offering were approximately $149.7 million, after deducting the Initial Purchasers’ discounts and commissions and the Company’s estimated offering expenses related to the offering. The Company used approximately $9.3 million of the net proceeds from the offering to pay the cost of the Notes Hedge, after such cost is partially offset by the proceeds from the Warrant Transactions described below. The Initial Purchasers exercised their option to purchase Additional Notes in full and the Company used a portion of the net proceeds from the sale of such Additional Notes to enter into additional Notes Hedges, after such cost is partially offset by the proceeds from the additional Warrant Transactions, with the Option Counterparties (as defined below). The Company intends to use the remainder of the net proceeds from the offering for general corporate purposes, which may include working capital, capital expenditures, and potential acquisitions and strategic transactions. As of September 30, 2023, the number of authorized and unissued shares of Common Stock that are not reserved for other purposes is sufficient to settle the 2026 Notes into equity. Accordingly, the Company may settle conversions of notes through payment or delivery, as the case may be, of cash, shares of Common Stock or a combination of cash and shares of Common Stock, at the Company’s election. In accounting for the issuance of the 2026 Notes, the conversion option of the 2026 Notes was deemed an embedded derivative requiring bifurcation from the 2026 Notes (“host contract”) and separate accounting as an embedded derivative liability, as a result of the Company not having the necessary number of authorized but unissued shares of its Common Stock available to settle the conversion option of the 2026 Notes in shares. The proceeds from the 2026 Notes were first allocated to the embedded derivative liability and the remaining proceeds were then allocated to the host contract. On February 5, 2021, the fair value of the embedded derivative liability representing the conversion option was $33.2 million and the remaining $116.5 million was allocated to the host contract. The difference between the principal amount of the 2026 Notes and the fair value of the host contract (the “debt discount”) is amortized to interest expense using the effective interest method over the term of the 2026 Notes. In the second quarter of fiscal 2022, the stockholders of the Company approved an increase to the number of authorized shares of Common Stock, to an amount sufficient to settle the conversion of the 2026 Notes. As a result of the increase to the number of authorized shares of Common Stock, the Company reclassified the embedded conversion derivative to additional paid-in capital. As of September 30, 2023, the embedded conversion derivative is included in additional paid-in capital in the consolidated balance sheets and will not be remeasured provided the requirements to qualify for the scope exception in ASC 815-10-15-74(a) continue to be met. Debt issuance costs for the issuance of the 2026 Notes were approximately $5.5 million, consisting of initial purchasers' discount and other issuance costs. In accounting for the transaction costs, the Company allocated the total amount incurred to the 2026 Notes. Transaction costs were recorded as debt issuance cost (presented as contra debt in the consolidated balance sheet) and are being amortized using the effective interest method to interest expense over the term of the 2026 Notes. The following table presents the total amount of interest cost recognized relating to the 2026 Notes for the twelve months ended September 30, 2023 and 2022 ( amounts in thousands ): 2023 2022 Contractual interest expense $ 1,615 $ 1,179 Amortization of debt discount and issuance costs 7,546 7,053 Total interest expense recognized $ 9,161 $ 8,232 The derived effective interest rate on the 2026 Notes host contract was determined to be 6.71%, which remains unchanged from the date of issuance. The remaining unamortized debt discount was $19.7 million as of September 30, 2023, and will be amortized over approximately 2.3 years. Convertible Senior Notes Hedge and Warrants In connection with the pricing of the 2026 Notes, the Company entered into the Notes Hedge with Bank of America, N.A., Jefferies International Limited and Goldman Sachs & Co. LLC (the “Option Counterparties”). The Notes Hedge provided the Company with the option to acquire, on a net settlement basis, approximately 7.4 million shares of Common Stock at a strike price of $20.85, which is equal to the number of shares of Common Stock that notionally underlie and correspond to the conversion price of the 2026 Notes. The Company also entered into Warrant Transactions with the Option Counterparties relating to the same number of shares of the Common Stock, subject to customary anti-dilution adjustments. The strike price of the Warrant Transactions is $26.53 per share, which represents a 75.0% premium to the last reported sale price of the Common Stock on the Nasdaq Capital Market on February 2, 2021, and is subject to certain adjustments under the terms of the Warrant Transactions. The Company was initially required to settle the Notes Hedge in cash, as they did not qualify for the scope exception for contracts involving an issuer’s own equity in ASC 815 and were accounted for as a derivative asset. Upon initial purchase, the Notes Hedge was recorded in convertible senior notes hedge As of September 30, 2023, the Notes Hedge is included in additional paid-in capital in the consolidated balance sheet and will not be remeasured provided the requirements to qualify for the scope exception in ASC 815-10-15-74(a) continue to be met and the Company had not purchased any shares under the Notes Hedge. As a result of the Warrant Transactions, the Company is required to recognize incremental dilution of earnings per share to the extent the average share price is over $26.53 for any fiscal quarter. During fiscal 2023, there was no dilution of earnings per share. The Warrant Transactions expire over a period of 80 trading days commencing on May 1, 2026 and may be settled in net shares of Common Stock or net cash at the Company’s election. Upon initial sale, the Warrant Transactions were recorded as an increase in additional paid-in capital within stockholders’ equity of $23.9 million. As of September 30, 2023, the Warrant Transactions had not been exercised and remained outstanding. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 10. COMMITMENTS AND CONTINGENCIES Legal Proceedings Claim Against ICAR On June 11, 2018, a claim was filed before Court of First Instance 5 (Juzgado de Primera Instancia) of Barcelona, Spain, the first instance court in the Spanish civil procedure system, against ICAR. The claim, also directed towards Mr. Xavier Codó Grasa, the former controlling shareholder of ICAR and its current General Manager at the time the claim was filed, was brought by the Spanish company Global Equity & Corporate Consulting, S.L. for an alleged breach by ICAR of a services agreement entered into in the context of the sale of all of the shares in ICAR to Mitek Holding B.V., a wholly owned subsidiary of the Company. ICAR responded to the claim on September 7, 2018. After several postponements as a consequence of the COVID-19 pandemic, on March 3, 2022 the trial was held. On June 7, 2022, the Court of First Instance 5 of Barcelona issued a judgment which fully upheld the claim and declared that Mr. Xavier Codó Grasa and ICAR had to pay the amount and damages claimed by Global Equity & Corporate Consulting, S.L. equal to €0.8 million (or $0.8 million as of September 30, 2023), plus the interest accrued and the legal fees. ICAR and Mr. Xavier Codó Grasa submitted an appeal against this judgment on July 13, 2022. Global Equity & Corporate Consulting, S.L. filed an opposition to that appeal on September 2, 2022. The next procedural step will be the voting and issuing of the ruling on the appeal. Global Equity & Corporate Consulting, S.L. requested the provisional enforcement of the judgment, asking ICAR and Mr. Xavier Codó Grasa to deposit the damages awarded plus 30% to cover the possible interests that may continue to accrue during the appeal (€1.1 million in total) with the Court. According to the terms of the sale and purchase agreement concerning the acquisition of the shares in ICAR, Mitek Holding B.V. is to be indemnified in respect of any damages suffered by ICAR and/or Mitek Holding B.V. in respect of this claim. As a consequence, the escrow (€0.9 million) was released pursuant to the provisional enforcement of the judgment, and Mr. Xavier Codó Grasa deposited the remaining €0.2 million. Global Equity & Corporate Consulting, S.L. also requested that ICAR and Mr. Xavier Codó Grasa bear the costs of the provisional enforcement. This amounted to €16,475 for the accrued interests, and €10,995 as legal costs. ICAR and Mr. Xavier Codó Grasa have complied with this request, having such amounts charged to the damages deposited with the Court. Third-Party Claims Against the Company’s Customers The Company receives indemnification demands from end-user customers who received third party patentee offers to license patents and allegations of patent infringement. Some of the offers and allegations have resulted in ongoing litigation. The Company is not a party to any such litigation. License offers to and infringement allegations against the Company’s end-customers were made by Lighthouse Consulting Group, LLC; Lupercal, LLC; Pebble Tide, LLC; Dominion Harbor Group, LLC; and IP Edge, LLC, which appear to be non-practicing entities (“NPEs”)—often called “patent trolls”—and not the Company’s competitors. These NPEs may seek to extract settlements from our end-customers, resulting in new or renewed indemnification demands to the Company. At this time, the Company does not believe it is obligated to indemnify any customers or end-customers resulting from license offers or patent infringement allegations by the companies listed above. However, the Company could incur substantial costs if it is determined that it is required to indemnify any customers or end-customers in connection with these offers or allegations. Given the potential for impact to other customers and the industry, the Company is actively monitoring the offers, allegations and any resulting litigation. On July 7, 2018, United Services Automobile Association (“USAA”) filed a lawsuit against Wells Fargo Bank, N.A. (“Wells Fargo”) in the Eastern District of Texas alleging that Wells Fargo’s remote deposit capture systems (which in part utilize technology provided by the Company to Wells Fargo through a partner) infringe four USAA owned patents related to mobile deposits (the “First Wells Lawsuit”). On August 17, 2018, USAA filed a second lawsuit (the “Second Wells Lawsuit” and together with the First Wells Lawsuit, the “Wells Lawsuits”) against Wells Fargo in the Eastern District of Texas asserting that an additional five patents owned by USAA were infringed by Wells Fargo’s remote deposit capture system. In neither lawsuit was the Company named in the Complaint as an infringer nor at any time did USAA allege specifically that the Company’s products by themselves infringed any of the asserted patents. Subsequently, on November 6, 2019, a jury in the First Wells Lawsuit found that Wells Fargo willfully infringed at least one of the Subject Patents (as defined below) and awarded USAA $200 million in damages. In the Second Wells Lawsuit, USAA dropped two of the patents from the litigation, and the judge in the case found that one of the remaining three patents was invalid. On January 10, 2020, a jury in the Second Wells Lawsuit found that Wells Fargo willfully infringed at least one of the patents at issue in that case and awarded USAA $102 million in damages. No Mitek product was accused of infringing either of the two patents in question in the Second Wells Lawsuit as the litigation involved broad banking processes and not the Company’s specific mobile deposit features. USAA and Wells Fargo subsequently reached a settlement, and on April 1, 2021, the Court granted the parties’ joint motion and stipulation of dismissal of the Wells Lawsuits with prejudice. Wells Fargo filed petitions for Inter Partes Review (“IPR”) with the Patent Trial and Appeal Board (“PTAB”) challenging the validity of the four patents in the First Wells Lawsuit. Three of those four petitions were instituted, while one (relating to U.S. Patent No. 9,818,090 (“the ‘090 Patent”)) was denied institution. On November 24, 2020, and January 26, 2021, the PTAB issued final written decisions determining that Wells Fargo had not demonstrated by a preponderance of the evidence that any claims of the U.S. Patent Nos. 8,977,571 (“the ‘571 Patent”), 8,699,779 (“the ‘779 Patent”), or 9,336,517 (“the ‘517 Patent”) were unpatentable. On September 30, 2020, USAA filed suit against PNC Bank (the “First PNC Lawsuit”) in the Eastern District of Texas alleging infringement of U.S. Patent Nos. 10,482,432 (“the ‘432 Patent”) and 10,621,559. These two patents are continuations of an asserted patent in the Second Wells Lawsuit and relate to similar subject matter. On October 19, 2020, PNC Bank’s integration partner, NCR Corporation, sent an indemnification demand to the Company requesting indemnification from all claims related to the First PNC Lawsuit. The complaint against PNC Bank does not claim that any Company product infringes any of the asserted patents. At this time, the Company does not believe it is obligated to indemnify NCR Corporation or end-users of NCR Corporation resulting from the patent infringement allegations by USAA. On December 4, 2020, USAA filed an amended complaint against PNC Bank also asserting two patents at issue in the First Wells Lawsuit—the ’779 Patent and the ’571 Patent. On February 2, 2021, NCR Corporation sent a second indemnification demand to the Company requesting indemnification of the claims described in the amended complaint. On March 31, 2021, USAA filed another suit against PNC Bank in the Eastern District of Texas alleging infringement of two patents from the Second Wells Lawsuit, U.S. Patent Nos. 10,013,605 (“the ‘605 Patent”) and 10,013,681 (“the ‘681 Patent”) (the “Second PNC Lawsuit”). On July 7, 2021, USAA filed a third lawsuit against PNC Bank (the “Third PNC Lawsuit” and together with the First PNC Lawsuit and the Second PNC Lawsuit, the “PNC Lawsuits”) asserting infringement of U.S. Patents 10,769,598; 10,402,638; and 9,224,136. A jury trial was held in May 2022 on the consolidated First PNC Lawsuit and Second PNC Lawsuit. The jury found that PNC willfully infringed at least one patent claim and awarded USAA $218 million in damages. The Court denied PNC Bank’s equitable defenses and entered a Final Judgment in the consolidated First PNC Lawsuit and Second PNC Lawsuit on August 19, 2022. A jury trial was held in September 2022 on the Third PNC Lawsuit. The jury found that PNC infringed at least one patent claim and awarded USAA $4.3 million in damages. The Court entered a Final Judgment in the Third PNC Lawsuit on February 16, 2023. While neither the Wells Lawsuits nor the PNC Lawsuits name the Company as a defendant, given (among other factors) the Company’s prior history of litigation with USAA and the continued use of the Company’s products by its customers, on November 1, 2019, the Company filed a complaint in the U.S. District Court for the Northern District of California seeking declaratory judgment that its products do not infringe the ’779 Patent, the ’571 Patent, the ’517 Patent, and the ’090 Patent (collectively, the “Subject Patents”). On January 15, 2020, USAA filed motions requesting the dismissal of the declaratory judgement of the Subject Patents and transfer of the case to the Eastern District of Texas, both of which the Company opposed. On April 21, 2020, the Court in the Northern District of California transferred the Company’s declaratory judgement action to the Eastern District of Texas and did not rule on USAA’s motion to dismiss. On April 28, 2021, the Court in the Eastern District of Texas granted USAA’s motion to dismiss the Company’s declaratory judgment action on jurisdictional grounds. The Court’s ruling did not address the merits of the Company’s claim of non-infringement. The Company appealed the ruling on the motion to dismiss and the decision to transfer the declaratory judgment action from California to Texas to the U.S. Court of Appeals for the Federal Circuit. The Federal Circuit heard oral argument on the Company’s appeal on April 4, 2022 and on May 20 2022, issued an opinion vacating and remanding the district court’s order granting USAA’s motion to dismiss. On August 1, 2022, the parties submitted additional briefing to the district court in light of Federal Circuit’s opinion. The court held another hearing on USAA’s motion to dismiss the Company’s declaratory judgment action on jurisdictional grounds, and once again granted USAA’s motion to dismiss on February 23, 2023. The Company timely filed a notice of appeal to the U.S. Court of Appeals for the Federal Circuit. The appeal is fully briefed, and the Company is awaiting oral argument. The Company continues to believe that its products do not infringe the Subject Patents and will vigorously defend the right of its end-users to use its technology. In April, May, and June 2020, the Company filed petitions for IPR with the PTAB of the U.S. Patent & Trademark Office challenging the validity of the Subject Patents. On November 6 and 17, 2020, the PTAB decided to exercise its discretion and deny institution of the four petitions due to the alleged relationship between the Company and Wells Fargo, who previously filed petitions for IPR on the Subject Patents. The PTAB did not address the merits of the Company’s petitions or the prior art cited in those petitions. The Company continues to believe that the prior art cited in the petitions renders all the claims of the Subject Patents invalid. On each of December 6, 2020, December 17, 2020, and February 23, 2021, the Company filed requests for rehearing and Precedential Opinion Panel (“POP”) review of the four denied IPR petitions. The Patent Office denied the requests for rehearing and for POP review. In September 2020, the Company filed an additional two petitions for IPR with the U.S. Patent & Trademark Office challenging the validity of the ‘681 Patent and the ‘605 Patent—two of the patents at issue in the Second Wells Lawsuit. In March 2021, the PTAB decided not to institute the two petitions. On July 7, July 14, and July 21 2021, PNC Bank filed six additional petitions for IPR with the U.S. Patent & Trademark Office challenging the validity of the ’779 Patent, the ’571 Patent, the ‘559 Patent, and the ‘432 Patent. On August 27, 2021, PNC filed two additional petitions for IPR challenging the validity of the ‘681 Patent and the ‘605 Patent. In October and November of 2021, PNC Bank filed four more petitions for IPR challenging the validity of the ‘638 Patent, the ‘136 Patent, and the ‘598 Patent. The Patent Office denied institution with respect to the petitions challenging the ‘432 Patent, the ‘605 Patent, the ‘681 Patent, and the ‘638 Patent, but instituted inter partes review on the petitions relating to the ‘779 Patent, the ‘571 Patent, the ‘559 Patent, and the ‘598 Patent—finding a reasonable likelihood that at least one challenged patent claim was invalid. The U.S. Patent & Trademark Office issued a final written decision in each of the IPRs challenging the ‘779 Patent, the ‘571 Patent, and the ‘559 Patent and found all challenged claims of each patent unpatentable. USAA filed requests for rehearing and requests for POP review. The requests for POP review and for rehearing were denied in March 2023. On August 16, 2021, USAA filed suit against BBVA USA (“BBVA”) in the Eastern District of Texas alleging infringement of the same patents at issue in the PNC Lawsuits. While the Company’s IPR petitions were mentioned in the complaint, the Company was not named as a defendant or mentioned in connection with any alleged infringement. BBVA then sent the Company an indemnification demand on September 7, 2021. For the same reasons discussed above in connection with PNC Bank and PNC Lawsuits, the Company does not believe it is obligated to indemnify BBVA. On June 6, 2022, the Court granted the parties’ request to administratively close the case and stay all deadlines in view of the pending appeal in the PNC Lawsuits. On July 29, 2022, USAA filed another patent infringement lawsuit against Truist Bank (“Truist”) in the Eastern District of Texas. The lawsuit alleges infringement of the ’090 Patent, the ’432 Patent, and the U.S. Patent No. 11,182,753 (“the ’753 Patent”). The Company was not named as a defendant or mentioned in connection with any alleged infringement. On October 5, 2022, Truist’s integration partner, NCR Corporation, sent an indemnification demand to the Company requesting indemnification from all claims related to the lawsuit. For the same reasons discussed above in connection with the PNC Lawsuits, the Company does not believe it is obligated to indemnify NCR Corporation or end-users of NCR Corporation resulting from the patent infringement allegations by USAA. On October 7, 2022, Truist filed a motion to transfer venue to the Western District of North Carolina. The motion was denied on April 8, 2023. On December 30, 2022, Truist filed a motion for leave to file counterclaims against USAA alleging patent infringement of U.S. Patent Nos. 7,336,813; 7,519,214; 8,136,721; and 9,760,797, which was granted on April 8, 2023. On March 13, 2023, USAA moved for leave to file a First Amended Complaint, adding an additional allegation of patent infringement of U.S. Patent No. 11,544,944 (“the ’944 Patent”). On April 4, 2023, Truist sent another indemnification demand to the Company requesting indemnification related to the lawsuit. On May 3, 2023, USAA moved for leave to file a Second Amended Complaint, adding an additional allegation of patent infringement of U.S. Patent No. 11,625,770 (“the ’770 Patent”). On May 30, 2023, Truist sent another indemnification demand to the Company requesting indemnification related to the Second Amended Complaint. On October 6, 2023, the parties filed a Notice of Settlement and Joint Motion and Stipulation of Dismissal. All claims and causes of actions between the parties were dismissed with prejudice on October 10, 2023 in view of the settlement. In October and November of 2022, Truist filed a petition for IPR with the U.S. Patent & Trademark Office challenging the validity of the ’090 Patent, the ’432 Patent, and the ’753 Patent. The Patent Office instituted the petitions directed to the ’090 and ’753 Patents, but denied institution of the petition directed to the ’432 Patent. In view of the settlement between USAA and Truist, the IPRs were withdrawn. The Company incurred legal fees of $1.4 million in the fiscal year ended September 30, 2023 related to third party claims against our customers. Such fees are included in general and administrative expenses in the consolidated statement of operations and other comprehensive income (loss). Claim Against UrbanFT, Inc. On July 31, 2019, the Company filed a lawsuit against one of its customers, UrbanFT, Inc. (“UrbanFT”) in the United States District Court for the Southern District of California (case No. 19-CV-1432-CAB-DEB). UrbanFT is delinquent in payment and attempted to justify its non-payment by asserting that the Company is or may be infringing on purported UrbanFT patents. The Company filed such lawsuit to collect the delinquent payments and to obtain a declaratory judgment of non-infringement of five purported UrbanFT patents. UrbanFT filed an answer and later asserted infringement of two of the five patents-at-issue in the Company’s lawsuit against UrbanFT. The Company thereafter filed counterclaims seeking a declaration that the two patents now asserted by UrbanFT are invalid in addition to being not infringed. During the course of the litigation, the Company learned that a judgment had been entered against UrbanFT’s affiliates and its predecessor owner in which an Oregon court ordered that the patents in issue revert to a prior owner, Mr. Stevens, because UrbanFT’s affiliates did not pay the purchase price owed to the prior owner. On September 8, 2020, the Company filed a motion for summary judgment on its breach of contract claim. On September 15, 2020, the district court issued an order to show cause regarding jurisdiction over patent issues in light of the Oregon judgment. On December 17, 2020, the district court dismissed Mitek’s claims for declaratory judgment of non-infringement and UrbanFT’s counterclaims for patent infringement and related affirmative defenses based on infringement of the patents for lack of subject matter jurisdiction because UrbanFT does not own the patents. The district court then dismissed the remaining state law claims without prejudice to refiling in state court. On December 18, 2020, the Company filed a new suit against UrbanFT in the Superior Court of the State of California, County of San Diego (case no. 37-2020-00046670-CU-BC-CTL) asserting claims for breach of contract, open book account, and monetary damages. UrbanFT filed an answer and did not assert any cross-claims. The Company filed a motion for summary judgment which was heard on April 15, 2022. The Court granted the Company’s motion and on June 2, 2022, entered a judgment in favor of the Company for $1.7 million in compensatory damages, plus costs, including attorney’s fees. The Court awarded the Company $2,600 in costs plus $0.6 million in attorneys’ fees for a total judgment of $2.3 million. The time for UrbanFT to appeal the $1.7 million in compensatory damage judgment has expired but the time for UrbanFT to appeal the attorneys’ fee and cost award has not. No appeal has been filed. On August 2, 2023, the Company filed a separate lawsuit against Richard Steggall, UFT (North America), LLC fka Urban FT LLC; Urban FT Group, Inc; Urban FT Client Solutions, LLC; UFT Professional Services, LLC; and X-35 Financial Technologies, in the San Diego Superior Court, (case No. 37-2023-00033005-CU-FR-CTL) (“Fraud Conveyance Action”). The Fraud Conveyance Action alleges that the Mr. Steggall orchestrated a scheme to strip UFT (North America), LLC of any assets and effectively transfer the Urban FT business to other entities he owns and controls, all to avoid the Company’s collection efforts. The Fraud Conveyance Action also alleges that Mr. Steggall funnels Urban FT’s revenues through a web of other entities he owns and controls, all to ensure that creditors, including the Company, cannot collect their debts. The parties have started discovery. On February 23, 2024, the Court set the Fraud Conveyance Action for trial on March 14, 2025. Separately, the Company filed two motions to compel discovery set for April 12, 2024. The defendants have filed a motion to quash the Company’s subpoena to Chase Bank and the defendants filed an Order to Show Cause to hold the Company in contempt for violating the parties’ Protective Order. The Company anticipates filing its own motion for sanctions against defendants for their frivolous contempt motion. Claim Against Maplebear, Inc (dba Instacart): On December 13, 2021, Mitek filed a lawsuit against Maplebear Inc., d/b/a Instacart (“Instacart”), in California Superior Court – San Diego County (Case No, 37-2021-00052089-CU-BC-CTL) (the “Instacart Lawsuit”). Mitek alleged causes of action for breach of contract as well as breach of the implied covenant and requested over $2.0 million in damages. On August, 3, 2018 Instacart entered into a Master Services Agreement (the “Master Services Agreement”) with Mitek agreeing to purchase a subscription to Mitek’s Mobile Verify Advanced service. On June 19, 2020, the parties entered into a second Order Form in connection with the Master Services Agreement. The Order Form had a term of June 18, 2020 to December 31, 2023 and called for an annual commitment of $1.2 million. On September 23, 2021, Instacart sent a letter to Mitek purporting to outline breaches under the Master Services Agreement. Mitek responded on November 11, 2021, refuting Instacart’s claims and offering to engage in further discussions. Instacart thereafter sent a Notice of Termination of the Master Services Agreement dated November 24, 2021. The Parties participated in mediation on March 15, 2022. The mediation did not result in the resolution of the case and, following mediation, the Parties stipulated that Instacart’s response to Mitek’s complaint would be due on April 27, 2022. In lieu of filing a response to the complaint, Instacart elected to file a Motion to Transfer Venue to the County of San Francisco, which the Court denied, thereby keeping the case in the County of San Diego. On November 28, 2022, Instacart filed a cross-complaint against Mitek alleging: (1) Fraudulent Inducement; (2) Intentional Misrepresentation; (3) False Advertising; (4) Fraudulent Business Practices; (5) Unlawful Business Practices; (6) Unfair Business Practices; (7) Breach of Contract; and (8) Breach of the Implied Covenant of Good Faith and Fair Dealing. On January 27, 2023, Mitek filed a demurrer to the cross-complaint (the functional equivalent of a motion to dismiss). Both Parties also filed motions to compel further responses to written discovery requests. The Court did not decide the demurrer or the motions to compel before the Parties resolved and dismissed the case. On September 29, 2023, the Parties reached an agreement to resolve the case. The terms of the settlement were completed and, on October 24, 2023, the Company filed a Request for Dismissal, signed by counsel for both parties and asking the clerk of the Court to dismiss the Company’s complaint and causes of action as well as Instacart’s cross-complaint and causes of action. The Court entered the Request for Dismissal on October 24, 2023 and dismissed the Parties’ respective claims with prejudice. Biometric Information Privacy Act Claims On December 16, 2021, the Company was sued in a putative class action in the Circuit Court of Cook County, Illinois alleging that the Company had violated the Illinois Biometric Information Privacy Act (“BIPA”) with respect to identity verification services that the Company provided to its customer HyreCar, Inc. (“HyreCar”) for HyreCar’s customers in Illinois (the “BIPA Lawsuit”). Plaintiff claimed that the Company had not obtained the required consent to collect and use Plaintiff’s biometric information, and that Plaintiff and a class of similarly situated individuals therefore are entitled to statutory damages under BIPA. The Company removed the BIPA Lawsuit to the U.S. District Court for the Northern District of Illinois, and on March 4, 2022 the Company filed a Motion to Compel Arbitration based on HyreCar’s terms and conditions requiring HyreCar customers to arbitrate on an individual (non-class) basis (the “Arbitration Motion”). On May 4, 2022 the trial court denied the Arbitration Motion. On December 21, 2022, the trial court’s ruling was upheld on appeal, and the case subsequently was remanded back to the trial court. On March 10, 2023, Plaintiff filed an Amended Complaint adding a second named plaintiff, who is also HyreCar end-user, but otherwise not materially changing the allegations. On March 27, 2023, the Company filed a Motion to Dismiss or, in the Alternative, to Strike Class Allegations. On May 11, 2023, and after the Company’s Motion to Dismiss or, in the Alternative, to Strike Class Allegations had been fully briefed, Plaintiffs filed a Motion for Leave to File a Second Amended Complaint seeking to add two new named plaintiffs, who are end-users of the Company’s customers Instacart and Roadie, and to remove one named plaintiff. The Company opposed the Motion for Leave. On September 13, 2023, Plaintiffs filed a Notice of Voluntary Dismissal. On September 14, 2023, the Court dismissed the lawsuit without prejudice, ending the litigation. Other Legal Matters In addition to the foregoing, the Company is subject to various claims and legal proceedings arising in the ordinary course of its business. The Company accrues for such liabilities when it is both (i) probable that a loss has occurred and (ii) the amount of the loss can be reasonably estimated in accordance with ASC 450, Contingencies . While any legal proceeding has an element of uncertainty, the Company believes that the disposition of such matters, in the aggregate, will not have a material effect on the Company’s financial condition or results of operations. Employee 401(k) Plan The Company has a 401(k) plan that allows participating employees to contribute a percentage of their salary, subject to Internal Revenue Service annual limits. In 2015, the Company implemented a company match to the plan. The Company's contributions are made in an amount equal to 50% of the first 6% of an employee's designated deferral of their eligible compensation. The Company's total cost related to the 401(k) plan was $0.5 million, $0.7 million, and $0.7 million for the twelve months ended September 30, 2023, 2022, and 2021, respectively. |
LEASES
LEASES | 12 Months Ended |
Sep. 30, 2023 | |
Leases [Abstract] | |
LEASES | 11. LEASES Leases The Company leases office and research and development facility leases under non-cancelable operating leases for various terms through 2030. Certain lease agreements include renewal options, rent abatement periods, and rental increases throughout the term. Operating lease costs are included within cost of revenue, selling and marketing, research and development, and general and administrative expenses, dependent upon the nature and use of the ROU asset, in the Company’s consolidated statement of operations and other comprehensive income (loss). The following table provides the components of lease cost recognized in the consolidated statements of operations and comprehensive income for the periods presented ( amounts in thousands ): Twelve Months Ended September 30, 2023 2022 Operating lease cost 2,025 1,881 Variable lease cost 319 385 Total lease cost (1) 2,344 2,266 1. Short-term lease costs incurred by the Company for the twelve months ended September 30, 2023 and 2022 were immaterial. Other information related to leases as of the balance sheet dates presented are as follows: Twelve Months Ended September 30, 2023 2022 Weighted-average remaining lease term (years) - operating leases 4.3 4.5 Weighted-average discount rate - operating leases 3.7 % 3.5 % Maturities of operating lease liabilities as of September 30, 2023 were as follows (amounts in thousands) : Operating Leases 1 2024 1,985 2025 713 2026 701 2027 616 2028 413 Thereafter 574 Total lease payments 5,002 Less: amount representing interest $ (233) Present value of future lease payments $ 4,769 1. Excludes approximately $1.8 million of legally binding minimum lease payments for an office lease signed but not yet commenced. |
REVENUE CONCENTRATION
REVENUE CONCENTRATION | 12 Months Ended |
Sep. 30, 2023 | |
Risks and Uncertainties [Abstract] | |
REVENUE CONCENTRATION | 12. REVENUE CONCENTRATION Revenue Concentration For the twelve months ended September 30, 2023, the Company derived revenue of $27.7 million from one customer, with such customer accounting for 16% of the Company’s total revenue. For the twelve months ended September 30, 2022, the Company derived revenue of $25.0 million from the same single customer, with such customer accounting for 17% of the Company's total revenue. For the twelve months ended September 30, 2021, the Company derived revenue of $20.2 million from the same single customer, with such customer accounting for 17% of the Company’s total revenue. The corresponding accounts receivable balances of customers from which revenues were in excess of 10% of total revenue were $2.7 million, $8.0 million, and $3.4 million at September 30, 2023, 2022, and 2021, respectively. From a geographic perspective, approximately 72% and 68% of the Company’s total long-term assets as of September 30, 2023 and 2022, respectively, are associated with the Company’s international subsidiaries. From a geographic perspective, approximately 23% and 18% of the Company’s total long-term assets excluding goodwill and other intangible assets as of September 30, 2023 and 2022, respectively, are associated with the Company’s international subsidiaries. The United States was the only country that accounted for more than 10% of the Company’s revenue in the twelve months ended September 30, 2023, 2022, and 2021. Revenue for the twelve months ended September 30, 2023, 2022, and 2021 were as follows ( amounts in thousands ): Twelve Months Ended September 30, 2023 2022 2021 United States $ 134,957 $ 113,499 $ 92,832 All other countries 37,595 31,305 26,965 Total revenue $ 172,552 $ 144,804 $ 119,797 |
QUARTERLY INFORMATION (UNAUDITE
QUARTERLY INFORMATION (UNAUDITED) | 12 Months Ended |
Sep. 30, 2023 | |
Quarterly Financial Information Disclosure [Abstract] | |
QUARTERLY INFORMATION (UNAUDITED) | 13. QUARTERLY INFORMATION (UNAUDITED) As previously reported, there was a restatement of the second and third quarters of fiscal 2022, as described in Note 15 of the accompanying notes to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended September 30, 2022. The following table sets forth selected quarterly financial information for fiscal 2023 and 2022 as follows (amounts in thousands except per share data): 2023 Q1 Q2 Q3 Q4 Revenue $ 45,703 $ 46,123 $ 43,070 $ 37,656 Cost of revenue (exclusive of depreciation & amortization) 5,069 5,898 5,712 6,272 Operating expenses 32,261 31,539 35,566 34,671 Operating income (loss) 8,373 8,686 1,792 (3,287) Interest expense 2,137 2,163 2,362 2,401 Other income, net 340 454 925 2,121 Income tax benefit (provision) (1,846) (1,808) (783) 2,123 Net income (loss) 4,730 5,169 (428) (1,444) Net income (loss) per share: Basic income (loss) per share 0.11 0.11 (0.01) (0.03) Shares used in calculating net income (loss) per share—basic 44,930 45,377 46,002 45,997 Diluted income (loss) per share 0.10 0.11 (0.01) (0.03) Shares used in calculating net income (loss) per share—diluted 45,634 45,780 46,473 47,050 2022 Q1 Q2 Q3 Q4 Revenue $ 32,473 $ 33,510 $ 39,195 $ 39,626 Cost of revenue (exclusive of depreciation & amortization) 4,556 4,451 5,784 5,217 Operating expenses 23,089 26,379 32,518 30,610 Operating income (loss) 4,828 2,680 893 3,799 Interest expense 2,008 2,040 2,077 2,107 Other income (expense), net 135 (225) 89 (365) Income tax benefit (provision) 168 20 880 (976) Net income (loss) 3,123 435 (215) 351 Net income (loss) per share: Basic income (loss) per share 0.07 0.01 — 0.01 Shares used in calculating net income (loss) per share—basic 44,788 44,775 44,669 44,661 Diluted income (loss) per share 0.07 0.01 — 0.01 Shares used in calculating net income (loss) per share—diluted 46,155 46,097 45,224 45,311 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Sep. 30, 2023 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | 14. SUBSEQUENT EVENTS On February 13, 2024 (the “Closing Date”), the Company, A2iA Corp., and ID R&D, Inc. (jointly and severally, individually and collectively, “Borrower”) entered into a Loan and Security Agreement (the “Credit Agreement”) with Silicon Valley Bank, a division of First-Citizens Bank & Trust Company (the “Bank”). Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Credit Agreement. The Credit Agreement provides for a revolving line of credit whereby Borrower may borrow up to $35.0 million (the “Revolving Line”) with an additional $15.0 million to be advanced under the Revolving Line at the sole discretion of the Bank. The Revolving Line is secured on a first priority basis by Borrower’s assets. Any newly formed or acquired subsidiary of Borrower or any Guarantor, will either join the Credit Agreement as a co-borrower or become a Guarantor under the Credit Agreement, as determined by the Bank in its sole discretion. Borrower intends to use the Revolving Line for working capital and general business purposes. The Revolving Line terminates, and any outstanding principal amount of all advances made thereunder, and any accrued and unpaid interest thereon, become immediately due and payable on the earlier of (a) the three year anniversary of the Closing Date and (b) the date that is within 90 days of the maturity date of the “2026 Convertible Note” if such notes are outstanding as of such date. “2026 Senior Convertible Note” means the existing unsecured Indebtedness issued pursuant to that certain Indenture between the Company as issuer and UMB Bank, National Association as Indenture Trustee dated as of February 5, 2021, which provide for the issuance from time to time of debentures, notes or other debt instruments of Borrower, to be issued in one or more series. Borrowings under the Credit Agreement generally bear interest at a variable rate equal to (a) term SOFR plus a specified margin or (b) WSJ prime plus a specified margin, in each case which will be adjusted based on the Company’s net leverage ratio at the time of borrowing. Borrower must also pay Bank (i) a commitment fee of $87,500 and (ii) an “Unused Revolving Line Facility Fee” of 0.25% per annum of the average unused portion of the Revolving Line. The Credit Agreement contains representations, warranties, and negative and affirmative covenants customary for transactions of this type. These include covenants limiting the ability of Borrower, and any of their subsidiaries, subject to certain exceptions and baskets, to, among other things, (i) incur indebtedness, (ii) incur liens on their assets, (iii) enter into any merger or consolidation with, or acquire all or substantially all of the equity or property of, another person, (iv) dispose of any of their business or property, (v) make or permit any payment on subordinated debt, or (vi) pay any dividend, make any other distribution, or redeem any equity. The Credit Agreement contains customary events of default and also provides that an event of default includes any default resulting in a right by third parties to accelerate maturity of indebtedness in excess of $500,000. If any event of default occurs and is not cured within applicable grace periods set forth in the Credit Agreement or waived, all loans and other obligations could become due and immediately payable and the facility could be terminated. In addition, Borrower may be required to deposit cash with the Bank in an amount equal to 105% of any undrawn letters of credit denominated in U.S. Dollars or 115% of any undrawn letters of credit denominated in a foreign currency. |
REVISION OF PREVIOUSLY REPORTED
REVISION OF PREVIOUSLY REPORTED CONSOLIDATED FINANCIAL STATEMENTS | 12 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
REVISION OF PREVIOUSLY REPORTED CONSOLIDATED FINANCIAL STATEMENTS | 15. REVISION OF PREVIOUSLY REPORTED CONSOLIDATED FINANCIAL STATEMENTS In connection with the preparation of its consolidated financial statements for the twelve months ended September 30, 2023, the Company determined that its previously issued consolidated financial statements for the period ended September 30, 2022 contained errors in the application of GAAP as follows: i. The Company incorrectly netted accounts receivable and deferred revenue balances where the right of offset did not exist, which resulted in an understatement of $8.0 million in both accounts receivable, net and deferred revenue, current portion. ii. The Company determined it had failed to include the impact of share-based compensation deductions triggered by the HooYu Acquisition when recording the business combination in March 2022. This resulted in an understatement of $21.6 million of deferred tax assets relating to NOLs that should have been recorded in the Company’s deferred tax asset balance (understatement of $5.4 million, tax effected) upon the acquisition of HooYu. The adjustment was $4.6 million after the impacts of foreign exchange. iii. The Company incorrectly identified termination for convenience clauses in six software license contracts and incorrectly recognized revenue on certain of its multiyear term licenses. As such, the Company recognized $0.9 million of additional revenue for the twelve months ended September 30, 2022. This also resulted in a increase in contract assets, current portion of $0.8 million, a decrease in deferred revenue of $0.2 million, a decrease in income tax benefit of $0.2 million, a decrease in prepaids of $0.1 million, a decrease in deferred income tax assets of $0.1 million, an increase in income tax payables of $12,000 and a decrease in other current liabilities of $7,000. In accordance with SEC Staff Accounting Bulletin No. 99, “Materiality,” (“SAB 99”) and SEC Staff Accounting Bulletin No. 108, “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements,” (“SAB 108”), the Company evaluated the errors and has determined that the related impact was immaterial to the previously issued consolidated financial statements; however, correcting the error in the current period would have a material impact on the current financial statements. Therefore, the Company, in consultation with the Audit Committee of the Company’s Board of Directors, concluded that the affected period should be revised to present the identified adjustment discussed below. The Company has not filed, and does not intend to file, an amendment to the previously filed Annual Report on Form 10-K for the period ended September 30, 2022, but instead is revising its previously reported financial statements in this Annual Report on Form 10-K, as follows ( amounts in thousands ): As of September 30, 2022 As Previously Reported Total Adjustments As Revised Accounts receivable, net (i) $ 27,874 $ 8,048 $ 35,922 Contract assets, current portion (iii) 6,273 764 7,037 Prepaid expenses (iii) 2,000 (54) 1,946 Goodwill (ii) 120,186 (4,554) 115,632 Deferred income tax assets (iii) 10,245 (135) 10,110 Total assets 360,410 4,069 364,479 Income tax payables (iii) 194 12 206 Other current liabilities (iii) 2,409 (7) 2,402 Deferred revenue, current portion (i)(iii) 13,394 7,956 21,350 Deferred income tax liabilities (ii) 14,132 (4,554) 9,578 Total liabilities $ 190,093 $ 3,407 $ 193,500 Twelve months ended September 30, 2022 As Previously Reported Total Adjustments As Revised Revenue Software and hardware (iii) $ 72,494 $ 434 $ 72,928 Services and other (iii) 71,449 427 71,876 Total revenue 143,943 861 144,804 Operating income 11,339 861 12,200 Other expense, net (iii) (370) 4 (366) Income tax benefit (iii) 295 (203) 92 Net income $ 3,032 $ 662 $ 3,694 The statement of cash flows and impacted footnote disclosures have also been revised to give effect to this correction. Management also evaluated the above misstatements and concluded they were not material to the interim periods for fiscal years 2022 and 2023, individually and in aggregate. As a result, the Company plans to prospectively correct the relevant prior period condensed consolidated financial statements and related footnotes for these misstatements. |
NATURE OF OPERATIONS AND SUMM_2
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The financial statements are prepared under the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 105-10, Generally Accepted Accounting Principles , in accordance with accounting principles generally accepted in the U.S. (“GAAP”). |
Principles of Consolidation | 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 | Foreign Currency |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses, deferred taxes, and related disclosure of contingent assets and liabilities. On an ongoing basis, management reviews its estimates based upon currently available information. Actual results could differ materially from those estimates. These estimates include, but are not limited to, assessing the collectability of accounts receivable, estimation of the value of stock-based compensation awards, fair value of assets and liabilities acquired, impairment of goodwill, useful lives of intangible assets, standalone selling price related to revenue recognition, contingent consideration, and income taxes. |
Revenue Recognition | Revenue Recognition The Company generates revenue primarily from the delivery of licenses and related services to customers (for both on premise and software as a service (“SaaS”) products), as well as the delivery of hardware and professional services. Consistent with Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (“ASC 606”), revenue is recognized when control of these services is transferred to the Company’s customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those services. The Company determined revenue recognition through the following steps: 1. Identification of the contract, or contracts, with a customer 2. Identification of the performance obligations in the contract 3. Determination of the transaction price 4. Allocation of the transaction price to the performance obligations in the contract 5. Recognition of revenue when, or as, performance obligations are satisfied Note 2 describes the nature of the Company’s primary types of revenue and the revenue recognition policies and significant payment terms as they pertain to the types of transactions the Company enters into with its customers. Contract Balances: The timing of revenue recognition may differ from the timing of invoicing to customers, and these timing differences result in receivables (billed or unbilled), contract assets, or contract liabilities (deferred revenue) on the Company’s consolidated balance sheets. The Company records a contract asset when revenue is recognized prior to the right to invoice, or deferred revenue when revenue is recognized subsequent to invoicing. The Company records an unbilled receivable when revenue is recognized and it has an unconditional right to invoice and receive payment. The Company reports net contract asset or liability positions on a customer-by-customer basis at the end of each reporting period. Unbilled receivables are included within accounts receivable on the consolidated balance sheets and were $0.9 million and $1.7 million as of September 30, 2023 and 2022, respectively. Contract Costs: The Company incurs incremental costs to obtain a contract, consisting primarily of sales commissions, which are payable 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. Cost of Revenue: Cost of revenue includes personnel costs related to billable services and software support, direct costs associated with our hardware products and hosting costs. Depreciation and amortization that are excluded from cost of revenue are included in research and development and selling and marketing on the consolidated statement of operations and other comprehensive income (loss). Nature of Goods and Services The following is a description of principal activities from which the Company generates its revenue. Contracts with customers are evaluated on a contract-by-contract basis as contracts may include multiple types of goods and services as described below. Software and Hardware Software and hardware revenue is generated from on premise software license sales, as well as sales of hardware scanner boxes and on premise appliance products. Software is typically sold as a time-based license with a term of one Services and Other Services and other revenue is generated from the sale of software as a service (“SaaS”) products and services, maintenance associated with the sale of on premise software licenses and consulting and professional services. The Company’s SaaS offerings give customers the option to be charged upon their incurred usage in arrears (“Pay as You Go”), or commit to a minimum spend over their contracted period, with the ability to purchase unlimited additional transactions above the minimum during the contract term. Revenue related to Pay as You Go contracts are recognized based on the customer’s actual usage, in the period of usage. For contracts which include a minimum commitment, the Company is standing ready to provide as many transactions as desired by the customer throughout the contract term, and revenue is recognized on a ratable basis over the contract period including an estimate of usage above the minimum commitment. Usage above minimum commitment is estimated by looking at historical usage, expected volume, and other factors to project out for the remainder of the contract term. The estimated usage-based revenues are constrained to the amount the Company expects to be entitled to receive in exchange for providing access to its platform. If professional services are deemed to be distinct, revenue is recognized as services are performed. The Company does not view the signing of the contract or the provision of initial setup services as discrete earnings events that are distinct. Significant Judgments in Application of the Guidance The Company uses the following methods, inputs, and assumptions in determining amounts of revenue to recognize: Identification of Performance Obligations For contracts that contain multiple performance obligations, which include combinations of software licenses, maintenance, and services, the Company accounts for individual goods or services as a separate performance obligation if they are distinct. The good or service is distinct if the good or service is separately identifiable from other items in the arrangement and if a customer can benefit from it on its own or with other resources that are readily available to the customer. If these criteria are not met, the promised goods or services are accounted for as a combined performance obligation. Determination of Transaction Price The transaction price is determined based on the consideration to which the Company will be entitled in exchange for transferring products or services to the customer. The Company includes any fixed charges within its contracts as part of the total transaction price. To the extent that variable consideration is not constrained, the Company includes an estimate of the variable amount, as appropriate, within the total transaction price and updates its assumptions over the duration of the contract. As a practical expedient, the Company does not adjust the transaction price for the effects of a significant financing component if, at contract inception, the period between customer payment and the transfer of goods or services is expected to be one year or less. Assessment of Estimates of Variable Consideration Many of the Company’s contracts with customers contain some component of variable consideration; however, variable consideration will only be included in the transaction price to the extent it is probable that a significant reversal of revenues recognized will not occur when the uncertainty associated with the variable consideration is resolved. The Company may constrain the estimated transaction price in the event of a high degree of uncertainty as to the final consideration amount owed because of an extended length of time over which the fees may be adjusted or due to uncertainty surrounding collectability. The Company estimates variable consideration in its contracts primarily using the expected value method as the Company believes this method represents the most appropriate estimate for this consideration, based on historical usage trends, the individual contract considerations, and its best judgment at the time. Allocation of Transaction Price The transaction price, including any discounts, is allocated between separate goods and services in a contract that contains multiple performance obligations based on their relative standalone selling prices. The standalone selling prices are based on the prices at which the Company separately sells each good or service. For items that are not sold separately, the Company estimates the standalone selling prices using available information such as market conditions and internally approved pricing guidelines. In certain situations, primarily transactional SaaS revenue described above, the Company allocates variable consideration to a series of distinct goods or services within a contract. The Company allocates variable payments to one or more, but not all, of the distinct goods or services or to a series of distinct goods or services in a contract when (i) the variable payment relates specifically to the Company’s efforts to transfer the distinct good or service and (ii) the variable payment is for an amount that depicts the amount of consideration to which the Company expects to be entitled in exchange for transferring the promised goods or services to its customer. Contract Costs |
Restructuring Costs | Restructuring Costs |
Reclassifications | Reclassifications A reclassification has been made to the prior periods’ consolidated financial statements in order to conform to the current period presentation. Accrued interest payable and income tax payables were included in the other current liabilities line in the consolidated balance sheet as of September 30, 2022, however, they have been presented separately in the consolidated balance sheet as of September 30, 2023 so that the total of the other current liabilities line is less than five percent of total current liabilities. |
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. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents are defined as highly liquid financial instruments with original maturities of three months or less. The Company's cash and cash equivalents are composed of interest and non-interest-bearing deposits and money market funds. Cash and cash equivalents are maintained with various financial institutions. |
Investments | Investments 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 Credit Losses | Accounts Receivable and Allowance for Credit Losses |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash and cash equivalents, investments, and accounts receivable. The Company maintains the majority of its cash and cash equivalent balances with financial institutions that management believes are high-credit, quality financial institutions and invests its cash equivalents in highly rated market funds. |
Property and Equipment | Property and Equipment three |
Leases | Leases The Company determines if an arrangement is a lease at inception in accordance with ASC Topic 842, Leases (“ASC 842”). The lease term begins on the commencement date, which is the date the Company takes possession of the property, and may include options to extend or terminate the lease when it is reasonably certain that the option will be exercised. The lease term is used to determine lease classification as an operating or finance lease and is used to calculate straight-line expense for operating leases. Right of use (“ROU”) assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make payments arising from the lease. As a practical expedient, lease agreements with lease and non-lease components are accounted for as a single lease component for all asset classes, which are comprised of real estate leases and auto leases. ROU assets and lease liabilities are recognized at the commencement date based upon the present value of lease payments over the lease term. ROU assets also include prepaid lease payments and exclude lease incentives received. The Company estimates contingent lease incentives when it is probable that the Company is entitled to the incentive at lease commencement. Since the Company’s leases do not typically provide an implicit rate, the Company uses its incremental borrowing rate based upon the information available at commencement date of each lease. The determination of the incremental borrowing rate requires judgment. The Company determines the incremental borrowing rate using the Company’s current secured borrowing rate. The Company elected the short-term lease recognition exemption for all leases that qualify. Therefore, leases with an initial term of twelve months or less are not recorded on the consolidated balance sheet; instead, lease payments are recognized as lease expenses on a straight-line basis over the lease term. See Note 11 for additional details. Operating lease assets and liabilities are recognized for leases with lease terms greater than 12 months based on the present value of the future lease payments over the lease term at the commencement date. Operating lease expense is recognized on a straight-line basis over the lease term. |
Long-Lived Assets | Long-Lived Assets |
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. Amortization expense of capitalized development costs is included in research and development in the consolidated statements of other comprehensive income (loss). For the twelve months ended September 30, 2023, 2022, and 2021, 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. The Company had no amortization expense from capitalized software costs during the twelve months ended September 30, 2023, 2022, or 2021. |
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 Topic 350”), the Company reviews its goodwill 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. 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. The process of evaluating the potential impairment of goodwill is subjective and requires significant judgment at many points during the analysis. Management determines the fair value of the reporting unit based on the income approach which requires significant judgments to be made about the future cash flows of that reporting unit, discount rates, and growth rates. The Company’s cash flow forecasts are based on assumptions that represent the highest and best use for the Company’s reporting units. In the fourth quarter of fiscal 2023, management completed its annual goodwill impairment test and concluded that the Company’s goodwill was not impaired. 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 group 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 |
Other Borrowings | Other Borrowings five |
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 8 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 8 for additional details. |
Stock-Based Compensation | Stock-Based Compensation The Company issues RSUs, stock options, performance options, and Senior Executive Long-Term Incentive Restricted Stock Units (“Senior Executive Performance RSUs”) as awards to its employees based on the fair value assigned to RSUs which is based on the closing stock price of its common stock, par value $0.001 (“Common Stock”) on the date of grant. 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 (“ASC 718”). Forfeitures are recorded as they occur. 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. |
Advertising Expense | Advertising Expense |
Research and Development | Research and Development Research and development costs are expensed in the period incurred. |
Segment Reporting | Segment Reporting FASB ASC Topic 280, Segment Reporting , requires the use of a management approach in identifying segments of an enterprise. During the twelve months ended September 30, 2023, management determined that the Company has only one operating segment: the development, sale, and service of proprietary software solutions related to mobile imaging. The Company’s chief operating decision maker is its Chief Executive Officer, who reviews financial information presented on a consolidated basis for purposes of making operating decisions, assessing financial performance and allocating resources. |
Comprehensive Income (Loss) | Comprehensive Income (Loss) |
Recently Adopted Accounting Pronouncements and Recently Issued Accounting Pronouncements | Recently Adopted Accounting Pronouncements The Company did not adopt any new accounting pronouncements in the twelve months ended September 30, 2023. Recently Issued Accounting Pronouncements In December 2023, the FASB issued an Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures amending existing income tax disclosure guidance, primarily requiring more detailed disclosure for income taxes paid and the effective tax rate reconciliation. The ASU is effective for annual reporting periods beginning after December 15, 2024, with early adoption permitted and can be applied on either a prospective or retroactive basis. The Company is currently evaluating the ASU to determine its impact on its income tax disclosures and expects. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (ASU 2020-04) and also issued subsequent amendments to the initial guidance (collectively, Topic 848). Topic 848 provides optional guidance for contract modifications and certain hedging relationships associated with the transition from reference rates that are expected to be discontinued. The Company will adopt Topic 848 when the relevant contracts are modified upon transition to alternative reference rates. The Company does not expect the adoption of Topic 848 will have a material impact on the consolidated financial statements. No other new accounting pronouncement issued or effective during the twelve months ended September 30, 2023 had, or are 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, that may be used to measure fair value which consists of the following: • 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. Level 1: Includes investments in U.S. Government and agency securities, which are valued based on recently executed transactions in the same or similar securities. • Level 2: Convertible Senior Notes and corporate debt securities. Corporate debt securities are valued using quoted prices for similar assets or liabilities, quoted prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. On February 5, 2021, the Company issued the 2026 Notes as further described in Note 9. Concurrently with the issuance of the 2026 Notes, the Company entered into the Notes Hedge and Warrant Transactions which in combination are intended to reduce the potential dilution from the conversion of the 2026 Notes (see Note 9). The fair value of the Notes Hedge and the embedded conversion derivative were estimated using a Black-Scholes model. Based on the fair value hierarchy, the Company classified the Notes Hedge and the embedded conversion derivative as Level 2 as significant inputs are observable, either directly or indirectly. The significant inputs and assumptions used in the models to calculate the fair value of the derivatives include the Common Stock price, exercise price of the derivatives, risk-free interest rate, volatility, annual coupon rate and remaining contractual term. |
NATURE OF OPERATIONS AND SUMM_3
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Potentially Dilutive Common Shares Excluded from Calculation of Net Income per Share | For the twelve months ended September 30, 2023, 2022 and 2021, 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) : 2023 2022 2021 Stock options 437 506 543 RSUs 1,455 960 1,113 ESPP common stock equivalents 6 7 9 Performance options 755 623 272 Performance RSUs 268 281 104 Convertible senior notes 7,448 7,448 4,856 Warrants 7,448 7,448 4,856 Total potentially dilutive common shares outstanding 17,817 17,273 11,753 |
Schedule of Computation of Basic and Diluted Net Income Per Share | The calculation of basic and diluted net income per share for the twelve months ended September 30, 2023, 2022 and 2021, is as follows (amounts in thousands, except per share data): 2023 2022 2021 Net income $ 8,027 $ 3,694 $ 7,978 Weighted-average shares outstanding—basic 45,533 44,595 43,509 Common stock equivalents 928 1,185 1,574 Weighted-average shares outstanding—diluted 46,461 45,780 45,083 Net income per share: Basic $ 0.18 $ 0.08 $ 0.18 Diluted $ 0.17 $ 0.08 $ 0.18 |
Schedule of Summary of Property and Equipment | The following is a summary of property and equipment as of September 30, 2023 and 2022 (amounts in thousands): 2023 2022 Property and equipment—at cost: Leasehold improvements $ 2,612 $ 2,554 Machinery and equipment 3,657 3,384 Capitalized software development costs 3,610 2,902 Furniture and fixtures 728 709 10,607 9,549 Less: accumulated depreciation and amortization (7,778) (6,056) Total property and equipment, net $ 2,829 $ 3,493 |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 12 Months Ended |
Sep. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenue | The following table presents the Company's revenue disaggregated by major product category ( amounts in thousands ): Twelve Months Ended September 30, 2023 2022 2021 Major product category Deposits software and hardware $ 78,212 $ 64,548 $ 55,129 Deposits services and other 25,922 22,013 20,388 Deposits revenue 104,134 86,561 75,517 Identity verification software and hardware 10,162 8,380 4,940 Identity verification services and other 58,256 49,863 39,340 Identity verification revenue 68,418 58,243 44,280 Total revenue $ 172,552 $ 144,804 $ 119,797 |
Schedule of Contract Balances | The following table provides information about contract assets and contract liabilities from contracts with customers ( amounts in thousands ) as of September 30, 2023 and 2022: September 30, 2023 September 30, 2022 Contract assets, current $ 18,355 $ 7,037 Contract assets, non-current 5,579 4,218 Contract liabilities (deferred revenue), current 17,360 21,350 Contract liabilities (deferred revenue), non-current 957 1,775 |
BUSINESS COMBINATIONS (Tables)
BUSINESS COMBINATIONS (Tables) | 12 Months Ended |
Sep. 30, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Estimated Fair Values of Assets acquired and Liabilities Assumed | The following table summarizes the estimated fair values of the assets acquired and liabilities assumed from the ID R&D Acquisition and HooYu Acquisition as of September 30, 2023 ( amounts in thousands ): ID R&D HooYu Accounts receivable $ 173 $ 1,234 Property, plant, and equipment 114 504 Other current assets 147 630 Intangible assets 16,930 73,100 Goodwill 27,748 74,206 Current liabilities (425) (2,264) Deferred revenue — (2,612) Deferred income tax liabilities (2,355) (16,896) Net assets acquired $ 42,332 $ 127,902 |
Schedule of Estimated Useful Lives of Assets Acquired | The following table summarizes the estimated fair values and estimated useful lives of intangible assets with definite lives acquired from the ID R&D Acquisition and HooYu Acquisition during the twelve months ended September 30, 2023 ( amounts in thousands, except for years ): ID R&D Amortization Period Amount assigned Completed technologies 7.0 years $ 14,020 Customer relationships 3.0 years 2,540 Trade name 5.0 years 370 Total intangible assets acquired $ 16,930 HooYu Amortization Period Amount assigned Completed technologies 7.0 years $ 61,400 Customer relationships 5.0 years 5,000 Trade name 5.0 years 6,100 Covenants not to compete 3.0 years $ 600 Total intangible assets acquired $ 73,100 |
Schedule of Pro Forma Information | The following unaudited pro forma financial information should not be taken as representative of the Company’s future consolidated results of operations and includes adjustments for the amortization expense related to the identified intangible assets. The following table summarizes the Company’s unaudited pro forma financial information and is presented as if the ID R&D Acquisition and HooYu Acquisition occurred on October 1, 2020 and 2021, respectively ( amounts shown in thousands ): For the twelve months ended September 30, 2022 2021 Pro forma revenue $ 149,679 $ 130,302 Pro forma net income (loss) $ (6,683) $ (8,516) The following table summarizes the results of ID R&D and HooYu that are included in the Company’s consolidated results (amounts shown in thousands): For the twelve months ended September 30, 2022 2021 ID R&D Revenue $ 5,663 $ 849 Net Income (loss) $ (3,769) $ (3,021) HooYu Revenue $ 5,738 Net Income (loss) $ (1,587) |
RESTRUCTURING (Tables)
RESTRUCTURING (Tables) | 12 Months Ended |
Sep. 30, 2023 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Changes in Restructuring Accrual | The following table summarizes changes in the restructuring accrual during the twelve months ended September 30, 2023 (amounts in thousands) : Balance at September 30, 2022 $ 901 Additional costs incurred 2,109 Payments (3,070) Foreign currency effect on the restructuring accrual 60 Balance at September 30, 2023 $ — |
INVESTMENTS (Tables)
INVESTMENTS (Tables) | 12 Months Ended |
Sep. 30, 2023 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Investments by Type of Security | The following tables summarize investments by type of security as of September 30, 2023 and 2022, respectively (amounts in thousands ): September 30, 2023: Cost Gross Unrealized Gains Gross Unrealized Losses Fair Market Value Available-for-sale securities: U.S. Treasury, short-term $ 40,329 $ 1 $ (76) $ 40,254 Corporate debt securities, short-term 34,545 — (99) 34,446 U.S. Treasury, long-term 1,371 — (67) 1,304 Total $ 76,245 $ 1 $ (242) $ 76,004 September 30, 2022: Cost Gross Gross Fair Market Available-for-sale securities: U.S. Treasury, short-term $ 6,016 $ — $ (134) $ 5,882 Foreign government and agency securities, short-term 2,865 — (38) $ 2,827 Commercial paper, short-term 18,245 — (223) 18,022 Corporate debt securities, short-term 32,065 — (528) 31,537 U.S. Treasury, long-term 3,431 — (210) 3,221 Corporate debt securities, long-term 7,692 — (280) 7,412 Total $ 70,314 $ — $ (1,413) $ 68,901 |
Schedule of Fair Value of Investments Measured on Recurring Basis | The following tables represent the fair value hierarchy of the Company’s investments and acquisition-related contingent consideration as of September 30, 2023 and 2022, respectively (amounts in thousands): September 30, 2023 Balance Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Short-term investments: U.S. Treasury $ 40,254 $ 40,254 $ — $ — Corporate debt securities 34,446 — 34,446 — Total short-term investments at fair value 74,700 40,254 34,446 — Long-term investments: U.S. Treasury 1,304 1,304 — — Total long-term investments at fair value 1,304 1,304 — — Total assets at fair value $ 76,004 $ 41,558 $ 34,446 $ — Liabilities: Current liabilities: Acquisition-related contingent consideration $ 7,976 $ — $ 7,976 $ — Total liabilities at fair value $ 7,976 $ — $ 7,976 $ — September 30, 2022 Balance Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Short-term investments: U.S. Treasury $ 5,882 $ 5,882 $ — $ — Commercial paper 18,022 — 18,022 — Foreign government and agency securities 2,827 — 2,827 — Corporate debt securities 31,537 — 31,537 — Total short-term investments at fair value 58,268 5,882 52,386 — Long-term investments: U.S. Treasury 3,221 3,221 — — Corporate debt securities 7,412 — 7,412 — Total long-term investments at fair value 10,633 3,221 7,412 — Total assets at fair value $ 68,901 $ 9,103 $ 59,798 $ — Liabilities: Current liabilities: Acquisition-related contingent consideration $ 5,920 $ — $ — $ 5,920 Total liabilities at fair value $ 5,920 $ — $ — $ 5,920 |
Schedule of Acquisition-related Contingent Consideration Measured at Fair Value | The following table includes a roll-forward of the contingent consideration liability during the twelve months ended September 30, 2023 (amounts in thousands): Balance at September 30, 2022 $ 5,920 Expenses recorded due to changes in fair value 2,056 Balance at September 30, 2023 $ 7,976 |
Schedule of Fair Value Measurement Inputs and Valuation Techniques | The following tables summarize the quantitative information including the unobservable inputs related to our acquisition-related contingent consideration as of September 30, 2022 (amounts in thousands) : Fair Value at September 30, 2022 Valuation Technique Unobservable Input Input Used Acquisition-related contingent consideration $ 5,920 Monte Carlo simulation Weighted-average cost of capital 14.80 % Revenue weight-average cost of capital 4.40 % Revenue volatility 0.20 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Sep. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The following table summarizes changes in the balance of goodwill during the twelve months ended September 30, 2023 ( amounts in thousands ): Balance at September 30, 2022 $ 115,632 Foreign currency effect on goodwill 7,916 Balance at September 30, 2023 $ 123,548 |
Schedule of Intangible Assets | The estimated useful lives for all of these intangible assets range from three (amounts in thousands, except for years): September 30, 2023: Weighted Average Amortization Period (in years) Cost Accumulated Amortization Net Completed technologies 6.9 years $ 95,761 $ 39,254 $ 56,507 Customer relationships 4.7 years 25,168 21,396 3,772 Trade names 5.0 years 7,088 2,967 4,121 Covenants not to compete 3.0 years $ 600 $ 326 274 Total intangible assets $ 128,617 $ 63,943 $ 64,674 September 30, 2022: Weighted Average Amortization Period (in years) Cost Accumulated Amortization Net Completed technologies 6.9 years $ 95,761 $ 32,265 $ 63,496 Customer relationships 4.7 years 25,168 18,241 6,927 Trade names 5.0 years 7,088 2,174 4,914 Covenants not to compete 3.0 years 600 181 419 Total intangible assets $ 128,617 $ 52,861 $ 75,756 |
Schedule of Estimated Future Amortization Expense | The estimated future amortization expense related to intangible assets for each of the five succeeding fiscal years is expected to be as follows (amounts in thousands): Estimated Future Amortization Expense 2024 14,650 2025 13,404 2026 12,207 2027 11,095 2028 9,418 Thereafter 3,900 Total $ 64,674 |
STOCKHOLDERS_ EQUITY (Tables)
STOCKHOLDERS’ EQUITY (Tables) | 12 Months Ended |
Sep. 30, 2023 | |
Equity [Abstract] | |
Schedule of Stock-Based Compensation Expense | The following table summarizes stock-based compensation expense related to RSUs, stock options, and ESPP shares for the twelve months ended September 30, 2023, 2022, and 2021, which were allocated as follows (amounts in thousands): 2023 2022 2021 Cost of revenue $ 468 $ 289 $ 339 Selling and marketing 3,023 4,383 3,399 Research and development 2,757 3,701 3,218 General and administrative 4,215 4,973 4,576 Stock-based compensation expense included in expenses $ 10,463 $ 13,346 $ 11,532 |
Schedule of Stock Option Activity | The following table summarizes stock option activity under the Company’s equity plans during the twelve months ended September 30, 2023, 2022, and 2021: 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 (329,878) $ 7.63 $ 2,670 Canceled (15,910) $ 9.41 Outstanding at September 30, 2021 816,717 $ 7.42 5.8 $ 9,046 Granted — $ — Exercised (35,625) $ 6.68 $ 279 Canceled — $ — Outstanding at September 30, 2022 781,092 $ 7.46 3.7 $ 1,512 Granted — $ — Exercised (98,952) $ 7.44 $ 338 Canceled (30,871) $ 9.49 Outstanding at September 30, 2023 651,269 $ 7.37 3.6 $ 2,185 Vested and Expected to Vest at September 30, 2023 651,269 $ 7.37 3.6 $ 2,185 Exercisable at September 30, 2023 647,884 $ 7.35 3.6 $ 2,181 |
Schedule of RSU Activity | The following table summarizes RSU activity under the Company’s equity plans during the twelve months ended September 30, 2023, 2022, and 2021: Number of Shares Weighted- Average Fair Value Per Share Outstanding at September 30, 2020 2,661,943 $ 7.95 Granted 887,049 $ 13.35 Settled (975,764) $ 7.64 Canceled (161,961) $ 8.94 Outstanding at September 30, 2021 2,411,267 $ 9.99 Granted 1,272,917 $ 14.43 Settled (898,178) $ 9.57 Canceled (344,329) $ 11.16 Outstanding at September 30, 2022 2,441,677 $ 12.29 Granted 1,101,925 $ 10.24 Settled (665,635) $ 11.33 Canceled (689,671) $ 12.49 Outstanding at September 30, 2023 2,188,296 $ 11.49 |
Schedule of Performance RSU Activity | The following table summarizes Performance RSU activity under the Company’s equity plans during the twelve months ended September 30, 2023, 2022, and 2021: 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 (90,345) $ 6.06 Canceled (19,252) $ 6.06 Outstanding at September 30, 2021 528,724 $ 9.17 Granted 629,279 $ 15.60 Settled (176,864) $ 8.42 Canceled (61,683) $ 13.51 Outstanding at September 30, 2022 919,456 $ 13.43 Granted 325,837 $ 10.23 Settled (27,245) $ 9.25 Canceled (487,655) $ 11.61 Outstanding at September 30, 2023 730,393 $ 13.37 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Sep. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income Tax Benefit (Provision) | Income before income taxes for the twelve months ended September 30, 2023, 2022, and 2021 is comprised of the following ( amounts in thousands ): 2023 2022 2021 Domestic $ 23,836 $ 11,483 $ 10,966 Foreign (13,495) (7,881) (2,164) Total $ 10,341 $ 3,602 $ 8,802 For the twelve months ended September 30, 2023, 2022, and 2021 the income tax benefit (provision) was as follows (amounts in thousands): 2023 2022 2021 Current: Federal $ (4,414) $ (233) $ — State (1,215) (325) (78) Foreign (1,023) (1,800) (1,119) Total current provision for income taxes (6,652) (2,358) (1,197) Deferred: Federal (659) (1,400) (1,387) State 819 513 457 Foreign 4,178 3,337 1,303 Total deferred provision for income taxes 4,338 2,450 373 Total tax benefit (expense) $ (2,314) $ 92 $ (824) |
Schedule of Significant Components of Net Deferred Tax Assets and Liabilities | Significant components of the Company’s net deferred tax assets and liabilities as of September 30, 2023 and 2022 are as follows (amounts in thousands): 2023 2022 Deferred tax assets: Stock-based compensation $ 2,357 $ 1,793 Net operating loss carryforwards 11,548 6,656 Research credit carryforwards 4,336 7,747 Lease liability 1,185 859 Intangibles 4,606 — Other, net 852 1,117 Total deferred assets 24,884 18,172 Deferred tax liabilities: Right of use asset (1,032) (633) Intangibles (15,914) (14,139) Total deferred liabilities (16,946) (14,772) Valuation allowance for net deferred tax assets (2,769) (2,868) Net deferred tax asset $ 5,169 $ 532 |
Schedule of Income Taxes Computed Using Federal Income Tax Rate | The difference between the income tax benefit (provision) and income taxes computed using the U.S. federal income tax rate was as follows for the twelve months ended September 30, 2023, 2022, and 2021 (amounts shown in thousands): 2023 2022 2021 Amount computed using statutory rate $ (2,172) $ (756) $ (1,849) Net change in valuation allowance for net deferred tax assets 292 (1,702) (19) Other (477) 1,605 — Foreign rate differential 504 268 13 Non-deductible items (14) (64) (141) Transaction costs — (411) — State income tax (100) 251 (276) Research and development credits 791 1,166 1,248 Foreign income tax — — (15) Contingent consideration (432) 285 — Uncertain tax positions (184) (318) — Stock compensation, net (522) (232) 215 Income tax (provision) benefit $ (2,314) $ 92 $ (824) |
Schedule of Reconciliation of Unrecognized Tax Benefits | The following table reconciles the beginning and ending amount of unrecognized tax benefits for the twelve months ended September 30, 2023, 2022, and 2021 (amounts shown in thousands): 2023 2022 2021 Gross unrecognized tax benefits at the beginning of the year $ 2,664 $ 2,114 $ 1,810 Additions from tax positions taken in the current year 330 484 268 Additions from tax positions taken in prior years — 66 36 Reductions from tax positions taken in prior years (9) — — Gross unrecognized tax benefits at end of the year $ 2,985 $ 2,664 $ 2,114 |
CONVERTIBLE SENIOR NOTES (Table
CONVERTIBLE SENIOR NOTES (Tables) | 12 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Carrying Values of Company's 2026 Notes | The carrying values of the 0.75% convertible notes due 2026 issued by the Company in an aggregate principal amount of $155.3 million (the “2026 Notes”) are as follows ( amounts in thousands ): September 30, 2023 September 30, 2022 2026 Notes: Principal amount $ 155,250 $ 155,250 Less: unamortized discount and issuance costs, net of amortization (19,734) (27,280) Carrying amount $ 135,516 $ 127,970 |
Schedule of Interest Costs Recognized Related to 2026 Notes | The following table presents the total amount of interest cost recognized relating to the 2026 Notes for the twelve months ended September 30, 2023 and 2022 ( amounts in thousands ): 2023 2022 Contractual interest expense $ 1,615 $ 1,179 Amortization of debt discount and issuance costs 7,546 7,053 Total interest expense recognized $ 9,161 $ 8,232 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Sep. 30, 2023 | |
Leases [Abstract] | |
Schedule of Lease Cost | The following table provides the components of lease cost recognized in the consolidated statements of operations and comprehensive income for the periods presented ( amounts in thousands ): Twelve Months Ended September 30, 2023 2022 Operating lease cost 2,025 1,881 Variable lease cost 319 385 Total lease cost (1) 2,344 2,266 1. Short-term lease costs incurred by the Company for the twelve months ended September 30, 2023 and 2022 were immaterial. |
Schedule of Assets And Liabilities, Lessee | Other information related to leases as of the balance sheet dates presented are as follows: Twelve Months Ended September 30, 2023 2022 Weighted-average remaining lease term (years) - operating leases 4.3 4.5 Weighted-average discount rate - operating leases 3.7 % 3.5 % |
Schedule of Maturities of Operating Lease Liabilities | Maturities of operating lease liabilities as of September 30, 2023 were as follows (amounts in thousands) : Operating Leases 1 2024 1,985 2025 713 2026 701 2027 616 2028 413 Thereafter 574 Total lease payments 5,002 Less: amount representing interest $ (233) Present value of future lease payments $ 4,769 1. Excludes approximately $1.8 million of legally binding minimum lease payments for an office lease signed but not yet commenced. |
REVENUE CONCENTRATION (Tables)
REVENUE CONCENTRATION (Tables) | 12 Months Ended |
Sep. 30, 2023 | |
Risks and Uncertainties [Abstract] | |
Schedule of Revenue from External Customers by Geographic Areas | Revenue for the twelve months ended September 30, 2023, 2022, and 2021 were as follows ( amounts in thousands ): Twelve Months Ended September 30, 2023 2022 2021 United States $ 134,957 $ 113,499 $ 92,832 All other countries 37,595 31,305 26,965 Total revenue $ 172,552 $ 144,804 $ 119,797 |
QUARTERLY INFORMATION (UNAUDI_2
QUARTERLY INFORMATION (UNAUDITED) (Tables) | 12 Months Ended |
Sep. 30, 2023 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Selected Quarterly Financial Data | The following table sets forth selected quarterly financial information for fiscal 2023 and 2022 as follows (amounts in thousands except per share data): 2023 Q1 Q2 Q3 Q4 Revenue $ 45,703 $ 46,123 $ 43,070 $ 37,656 Cost of revenue (exclusive of depreciation & amortization) 5,069 5,898 5,712 6,272 Operating expenses 32,261 31,539 35,566 34,671 Operating income (loss) 8,373 8,686 1,792 (3,287) Interest expense 2,137 2,163 2,362 2,401 Other income, net 340 454 925 2,121 Income tax benefit (provision) (1,846) (1,808) (783) 2,123 Net income (loss) 4,730 5,169 (428) (1,444) Net income (loss) per share: Basic income (loss) per share 0.11 0.11 (0.01) (0.03) Shares used in calculating net income (loss) per share—basic 44,930 45,377 46,002 45,997 Diluted income (loss) per share 0.10 0.11 (0.01) (0.03) Shares used in calculating net income (loss) per share—diluted 45,634 45,780 46,473 47,050 2022 Q1 Q2 Q3 Q4 Revenue $ 32,473 $ 33,510 $ 39,195 $ 39,626 Cost of revenue (exclusive of depreciation & amortization) 4,556 4,451 5,784 5,217 Operating expenses 23,089 26,379 32,518 30,610 Operating income (loss) 4,828 2,680 893 3,799 Interest expense 2,008 2,040 2,077 2,107 Other income (expense), net 135 (225) 89 (365) Income tax benefit (provision) 168 20 880 (976) Net income (loss) 3,123 435 (215) 351 Net income (loss) per share: Basic income (loss) per share 0.07 0.01 — 0.01 Shares used in calculating net income (loss) per share—basic 44,788 44,775 44,669 44,661 Diluted income (loss) per share 0.07 0.01 — 0.01 Shares used in calculating net income (loss) per share—diluted 46,155 46,097 45,224 45,311 |
REVISION OF PREVIOUSLY REPORT_2
REVISION OF PREVIOUSLY REPORTED CONSOLIDATED FINANCIAL STATEMENTS (Tables) | 12 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Schedule of Error Corrections and Prior Period Adjustments | The Company has not filed, and does not intend to file, an amendment to the previously filed Annual Report on Form 10-K for the period ended September 30, 2022, but instead is revising its previously reported financial statements in this Annual Report on Form 10-K, as follows ( amounts in thousands ): As of September 30, 2022 As Previously Reported Total Adjustments As Revised Accounts receivable, net (i) $ 27,874 $ 8,048 $ 35,922 Contract assets, current portion (iii) 6,273 764 7,037 Prepaid expenses (iii) 2,000 (54) 1,946 Goodwill (ii) 120,186 (4,554) 115,632 Deferred income tax assets (iii) 10,245 (135) 10,110 Total assets 360,410 4,069 364,479 Income tax payables (iii) 194 12 206 Other current liabilities (iii) 2,409 (7) 2,402 Deferred revenue, current portion (i)(iii) 13,394 7,956 21,350 Deferred income tax liabilities (ii) 14,132 (4,554) 9,578 Total liabilities $ 190,093 $ 3,407 $ 193,500 Twelve months ended September 30, 2022 As Previously Reported Total Adjustments As Revised Revenue Software and hardware (iii) $ 72,494 $ 434 $ 72,928 Services and other (iii) 71,449 427 71,876 Total revenue 143,943 861 144,804 Operating income 11,339 861 12,200 Other expense, net (iii) (370) 4 (366) Income tax benefit (iii) 295 (203) 92 Net income $ 3,032 $ 662 $ 3,694 |
NATURE OF OPERATIONS AND SUMM_4
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) | 12 Months Ended | |||
Sep. 30, 2023 USD ($) institution segment reportingUnit $ / shares | Sep. 30, 2022 USD ($) $ / shares | Sep. 30, 2021 USD ($) | Dec. 31, 2017 | |
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | ||||
Number of financial services organizations, leading marketplace and financial technology brands (more than) | institution | 7,900 | |||
Foreign currency translation adjustment | $ 13,093,000 | $ (27,559,000) | $ (455,000) | |
Unbilled receivables | 900,000 | 1,700,000 | ||
Restructuring costs | 2,114,000 | 1,800,000 | 0 | |
Other-than-temporary impairment charges recognized in earnings | 0 | 0 | 0 | |
Write-offs of allowance for doubtful accounts | 100,000 | 0 | 100,000 | |
Allowance for doubtful accounts receivable | 1,500,000 | 900,000 | ||
Depreciation and amortization of property and equipment | 1,727,000 | 1,401,000 | 1,439,000 | |
Repairs and maintenance expenses | 100,000 | 100,000 | 100,000 | |
Impairment or long-lived assets | 0 | 0 | 0 | |
Capitalized software development costs | 0 | 0 | 0 | |
Amortization expense for capitalized software development costs | 0 | 0 | 0 | |
Capitalized software development costs for internal use | 700,000 | 800,000 | 800,000 | |
Amortization expense for capitalized software development costs for internal use | $ 700,000 | 400,000 | 300,000 | |
Number of operating segments | segment | 1 | |||
Number of reporting units | reportingUnit | 1 | |||
Goodwill impairment | $ 0 | |||
Impairment to intangible assets | $ 0 | $ 0 | 0 | |
Trading-day average stock price period | 20 days | |||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | ||
Advertising costs | $ 1,200,000 | $ 1,100,000 | $ 1,200,000 | |
Spanish Government Agencies | ICAR Vision Systems, S.L. | ||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | ||||
Interest rate on loan agreements | 0% | |||
Total amounts outstanding under loan agreements | 1,200,000 | 1,300,000 | ||
Spanish Government Agencies | Other Current Liabilities | ICAR Vision Systems, S.L. | ||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | ||||
Current amount outstanding under loan agreements | 200,000 | 100,000 | ||
Spanish Government Agencies | Other Noncurrent Liabilities | ICAR Vision Systems, S.L. | ||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | ||||
Non-current amount outstanding under loan agreements | $ 1,100,000 | $ 1,200,000 | ||
Minimum | ||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | ||||
Property and equipment, estimated useful lives | 3 years | |||
Minimum | Spanish Government Agencies | ICAR Vision Systems, S.L. | ||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | ||||
Repayment period of loan agreements | 5 years | |||
Maximum | ||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | ||||
Property and equipment, estimated useful lives | 7 years | |||
Maximum | Spanish Government Agencies | ICAR Vision Systems, S.L. | ||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | ||||
Repayment period of loan agreements | 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 | 12 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2021 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total potentially dilutive common shares outstanding (in shares) | 17,817 | 17,273 | 11,753 |
Stock options | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total potentially dilutive common shares outstanding (in shares) | 437 | 506 | 543 |
RSUs | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total potentially dilutive common shares outstanding (in shares) | 1,455 | 960 | 1,113 |
ESPP common stock equivalents | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total potentially dilutive common shares outstanding (in shares) | 6 | 7 | 9 |
Performance options | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total potentially dilutive common shares outstanding (in shares) | 755 | 623 | 272 |
Performance RSUs | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total potentially dilutive common shares outstanding (in shares) | 268 | 281 | 104 |
Convertible senior notes | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total potentially dilutive common shares outstanding (in shares) | 7,448 | 7,448 | 4,856 |
Warrants | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total potentially dilutive common shares outstanding (in shares) | 7,448 | 7,448 | 4,856 |
NATURE OF OPERATIONS AND SUMM_6
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Computation of Basic and Diluted Net Income (Loss) Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||
Net income | $ (1,444) | $ (428) | $ 5,169 | $ 4,730 | $ 351 | $ (215) | $ 435 | $ 3,123 | $ 8,027 | $ 3,694 | $ 7,978 |
Weighted-average shares outstanding—basic (in shares) | 45,997 | 46,002 | 45,377 | 44,930 | 44,661 | 44,669 | 44,775 | 44,788 | 45,533 | 44,595 | 43,509 |
Common stock equivalents (in shares) | 928 | 1,185 | 1,574 | ||||||||
Weighted-average shares outstanding—diluted (in shares) | 47,050 | 46,473 | 45,780 | 45,634 | 45,311 | 45,224 | 46,097 | 46,155 | 46,461 | 45,780 | 45,083 |
Net income per share: | |||||||||||
Net income per share—basic (in dollars per share) | $ (0.03) | $ (0.01) | $ 0.11 | $ 0.11 | $ 0.01 | $ 0 | $ 0.01 | $ 0.07 | $ 0.18 | $ 0.08 | $ 0.18 |
Net income per share—diluted (in dollars per share) | $ (0.03) | $ (0.01) | $ 0.11 | $ 0.10 | $ 0.01 | $ 0 | $ 0.01 | $ 0.07 | $ 0.17 | $ 0.08 | $ 0.18 |
NATURE OF OPERATIONS AND SUMM_7
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Summary of Property and Equipment (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Sep. 30, 2022 |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, at cost | $ 10,607 | $ 9,549 |
Less: accumulated depreciation and amortization | (7,778) | (6,056) |
Total property and equipment, net | 2,829 | 3,493 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, at cost | 2,612 | 2,554 |
Machinery and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, at cost | 3,657 | 3,384 |
Capitalized software development costs | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, at cost | 3,610 | 2,902 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, at cost | $ 728 | $ 709 |
REVENUE RECOGNITION - Narrative
REVENUE RECOGNITION - Narrative (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Disaggregation of Revenue [Line Items] | ||
Revenue recognized included in contract liability balance at the beginning of the period | $ 19,300,000 | $ 10,900,000 |
Unbilled receivables | 900,000 | 1,700,000 |
Revenue, remaining performance obligation, amount | 18,300,000 | 23,100,000 |
Impairment losses recognized in capitalized contract costs | 0 | 0 |
Selling and Marketing | ||
Disaggregation of Revenue [Line Items] | ||
Amortization of capitalized contract costs | 1,500,000 | 1,300,000 |
Other Current and Non-Current Assets | ||
Disaggregation of Revenue [Line Items] | ||
Capitalized contract costs | 2,600,000 | 2,400,000 |
2025-10-01 | ||
Disaggregation of Revenue [Line Items] | ||
Revenue, remaining performance obligation, amount | $ 1,000,000 | |
Revenue, remaining performance obligation, amount period | ||
2023-10-01 | ||
Disaggregation of Revenue [Line Items] | ||
Revenue, remaining performance obligation, amount | $ 21,400,000 | |
Revenue, remaining performance obligation, amount period | 1 year | |
2024-10-01 | ||
Disaggregation of Revenue [Line Items] | ||
Revenue, remaining performance obligation, amount | $ 17,400,000 | $ 1,800,000 |
Revenue, remaining performance obligation, amount period | 1 year | |
Minimum | ||
Disaggregation of Revenue [Line Items] | ||
Estimated useful lives of intangible assets (in years) | 3 years | |
Minimum | Software | ||
Disaggregation of Revenue [Line Items] | ||
Estimated useful lives of intangible assets (in years) | 1 year | |
Maximum | ||
Disaggregation of Revenue [Line Items] | ||
Estimated useful lives of intangible assets (in years) | 7 years | |
Maximum | Software | ||
Disaggregation of Revenue [Line Items] | ||
Estimated useful lives of intangible assets (in years) | 3 years |
REVENUE RECOGNITION - Disaggreg
REVENUE RECOGNITION - Disaggregation of Revenues (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2021 | |
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue | $ 37,656 | $ 43,070 | $ 46,123 | $ 45,703 | $ 39,626 | $ 39,195 | $ 33,510 | $ 32,473 | $ 172,552 | $ 144,804 | $ 119,797 |
Deposits revenue | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue | 104,134 | 86,561 | 75,517 | ||||||||
Deposits software and hardware | Transferred at Point in Time | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue | 78,212 | 64,548 | 55,129 | ||||||||
Deposits services and other | Transferred Over Time | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue | 25,922 | 22,013 | 20,388 | ||||||||
Identity verification revenue | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue | 68,418 | 58,243 | 44,280 | ||||||||
Identity verification software and hardware | Transferred at Point in Time | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue | 10,162 | 8,380 | 4,940 | ||||||||
Identity verification services and other | Transferred Over Time | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue | $ 58,256 | $ 49,863 | $ 39,340 |
REVENUE RECOGNITION - Contract
REVENUE RECOGNITION - Contract Balances (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Sep. 30, 2022 |
Revenue from Contract with Customer [Abstract] | ||
Contract assets, current | $ 18,355 | $ 7,037 |
Contract assets, non-current | 5,579 | 4,218 |
Contract liabilities (deferred revenue), current | 17,360 | 21,350 |
Contract liabilities (deferred revenue), non-current | $ 957 | $ 1,775 |
BUSINESS COMBINATIONS - Narrati
BUSINESS COMBINATIONS - Narrative (Details) $ in Thousands | 1 Months Ended | 2 Months Ended | 3 Months Ended | 12 Months Ended | ||||
Mar. 23, 2022 USD ($) | May 28, 2021 USD ($) shares | Jul. 31, 2022 USD ($) | Jun. 30, 2022 USD ($) | Dec. 31, 2023 USD ($) | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | |
Business Acquisition [Line Items] | ||||||||
Consideration paid for acquisition, net of cash acquired | $ 267 | $ 122,672 | $ 12,549 | |||||
ID R&D | ||||||||
Business Acquisition [Line Items] | ||||||||
Aggregate purchase price | $ 49,000 | |||||||
Initial cash payment paid for acquisition | $ 13,000 | |||||||
Common stock issued during acquisition (in shares) | shares | 867,226 | |||||||
Common stock issued during acquisition, value | $ 13,900 | |||||||
Earnout period shift | 1 year | |||||||
Fair value of earnout consideration | $ 15,700 | |||||||
Amortization and acquisition-related costs | 600 | $ 2,100 | $ (1,400) | |||||
Escrow deposit | 4,000 | |||||||
Goodwill expected to be deductible for income tax purposes | $ 0 | |||||||
ID R&D | Performance RSUs | ||||||||
Business Acquisition [Line Items] | ||||||||
Earnout shares issuable (up to) (in shares) | shares | 711,535 | |||||||
ID R&D | First Earnout Anniversary | ||||||||
Business Acquisition [Line Items] | ||||||||
Aggregate purchase price | $ 9,500 | |||||||
Initial cash payment paid for acquisition | 7,700 | |||||||
Earnout period | 1 year | |||||||
Maximum payout of contingent consideration liability | $ 12,300 | |||||||
Earnout percentage | 0.15 | |||||||
Value of common stock issued during acquisition | $ 1,800 | |||||||
ID R&D | Second Earnout Anniversary | ||||||||
Business Acquisition [Line Items] | ||||||||
Maximum payout of contingent consideration liability | $ 9,800 | |||||||
ID R&D | Second Earnout Anniversary | Subsequent Event | ||||||||
Business Acquisition [Line Items] | ||||||||
Aggregate purchase price | $ 8,000 | |||||||
Initial cash payment paid for acquisition | 4,700 | |||||||
Value of common stock issued during acquisition | $ 3,300 | |||||||
HooYu | ||||||||
Business Acquisition [Line Items] | ||||||||
Initial cash payment paid for acquisition | $ 129,100 | $ 400 | ||||||
Fair value of earnout consideration | 1,600 | |||||||
Amortization and acquisition-related costs | $ 3,200 | |||||||
Percentage of voting interests acquired (as a percent) | 100% | |||||||
Payments to sellers and third-party legal and investment advisors | $ 127,500 | |||||||
Consideration paid for acquisition, net of cash acquired | $ 500 |
BUSINESS COMBINATIONS - Estimat
BUSINESS COMBINATIONS - Estimated Fair Values of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Sep. 30, 2022 |
Business Acquisition [Line Items] | ||
Goodwill | $ 123,548 | $ 115,632 |
ID R&D | ||
Business Acquisition [Line Items] | ||
Accounts receivable | 173 | |
Property, plant, and equipment | 114 | |
Other current assets | 147 | |
Intangible assets | 16,930 | |
Goodwill | 27,748 | |
Current liabilities | (425) | |
Deferred revenue | 0 | |
Deferred income tax liabilities | (2,355) | |
Net assets acquired | 42,332 | |
HooYu | ||
Business Acquisition [Line Items] | ||
Accounts receivable | 1,234 | |
Property, plant, and equipment | 504 | |
Other current assets | 630 | |
Intangible assets | 73,100 | |
Goodwill | 74,206 | |
Current liabilities | (2,264) | |
Deferred revenue | (2,612) | |
Deferred income tax liabilities | (16,896) | |
Net assets acquired | $ 127,902 |
BUSINESS COMBINATIONS - Intangi
BUSINESS COMBINATIONS - Intangible Assets Acquired (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Customer relationships | ||
Acquired Indefinite-lived Intangible Assets [Line Items] | ||
Amortization Period | 4 years 8 months 12 days | 4 years 8 months 12 days |
Covenants not to compete | ||
Acquired Indefinite-lived Intangible Assets [Line Items] | ||
Amortization Period | 3 years | 3 years |
ID R&D | ||
Acquired Indefinite-lived Intangible Assets [Line Items] | ||
Amount assigned | $ 16,930 | |
ID R&D | Completed technologies | ||
Acquired Indefinite-lived Intangible Assets [Line Items] | ||
Amortization Period | 7 years | |
Amount assigned | $ 14,020 | |
ID R&D | Customer relationships | ||
Acquired Indefinite-lived Intangible Assets [Line Items] | ||
Amortization Period | 3 years | |
Amount assigned | $ 2,540 | |
ID R&D | Trade name | ||
Acquired Indefinite-lived Intangible Assets [Line Items] | ||
Amortization Period | 5 years | |
Amount assigned | $ 370 | |
HooYu | ||
Acquired Indefinite-lived Intangible Assets [Line Items] | ||
Amount assigned | $ 73,100 | |
HooYu | Completed technologies | ||
Acquired Indefinite-lived Intangible Assets [Line Items] | ||
Amortization Period | 7 years | |
Amount assigned | $ 61,400 | |
HooYu | Customer relationships | ||
Acquired Indefinite-lived Intangible Assets [Line Items] | ||
Amortization Period | 5 years | |
Amount assigned | $ 5,000 | |
HooYu | Trade name | ||
Acquired Indefinite-lived Intangible Assets [Line Items] | ||
Amortization Period | 5 years | |
Amount assigned | $ 6,100 | |
HooYu | Covenants not to compete | ||
Acquired Indefinite-lived Intangible Assets [Line Items] | ||
Amortization Period | 3 years | |
Amount assigned | $ 600 |
BUSINESS COMBINATIONS - Pro For
BUSINESS COMBINATIONS - Pro Forma Financial Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Business Acquisition [Line Items] | ||
Pro forma revenue | $ 149,679 | $ 130,302 |
Pro forma net income (loss) | (6,683) | (8,516) |
ID R&D | ||
Business Acquisition [Line Items] | ||
Revenue from business combinations | 5,663 | 849 |
Net Income (loss) | (3,769) | (3,021) |
HooYu | ||
Business Acquisition [Line Items] | ||
Revenue from business combinations | 5,738 | |
Net Income (loss) | $ (1,587) |
RESTRUCTURING (Details)
RESTRUCTURING (Details) $ in Thousands | 12 Months Ended |
Sep. 30, 2023 USD ($) | |
Restructuring Reserve [Roll Forward] | |
Restructuring reserve, beginning balance | $ 901 |
Additional costs incurred | 2,109 |
Payments | (3,070) |
Foreign currency effect on the restructuring accrual | 60 |
Restructuring reserve, ending balance | $ 0 |
INVESTMENTS - Narrative (Detail
INVESTMENTS - Narrative (Details) - USD ($) | 12 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2021 | |
Investments, Debt and Equity Securities [Abstract] | |||
Other-than-temporary impairment charges recognized in earnings | $ 0 | $ 0 | $ 0 |
Realized gains (losses) from sale of available-for-sale securities | 0 | (300,000) | $ 0 |
Business Acquisition [Line Items] | |||
Acquisition-related contingent consideration | 7,976,000 | $ 5,920,000 | |
ID R&D | |||
Business Acquisition [Line Items] | |||
Acquisition-related contingent consideration | $ 8,000,000 |
INVESTMENTS - Summary of Invest
INVESTMENTS - Summary of Investments by Type of Security (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Sep. 30, 2022 |
Debt Securities, Available-for-sale [Line Items] | ||
Cost | $ 76,245 | $ 70,314 |
Gross Unrealized Gains | 1 | 0 |
Gross Unrealized Losses | (242) | (1,413) |
Fair Market Value | 76,004 | 68,901 |
Short-Term | U.S. Treasury | ||
Debt Securities, Available-for-sale [Line Items] | ||
Cost | 40,329 | 6,016 |
Gross Unrealized Gains | 1 | 0 |
Gross Unrealized Losses | (76) | (134) |
Fair Market Value | 40,254 | 5,882 |
Short-Term | Foreign Government and Agency Securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Cost | 2,865 | |
Gross Unrealized Gains | 0 | |
Gross Unrealized Losses | (38) | |
Fair Market Value | 2,827 | |
Short-Term | Commercial Paper | ||
Debt Securities, Available-for-sale [Line Items] | ||
Cost | 18,245 | |
Gross Unrealized Gains | 0 | |
Gross Unrealized Losses | (223) | |
Fair Market Value | 18,022 | |
Short-Term | Corporate Debt Securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Cost | 34,545 | 32,065 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (99) | (528) |
Fair Market Value | 34,446 | 31,537 |
Long-Term | U.S. Treasury | ||
Debt Securities, Available-for-sale [Line Items] | ||
Cost | 1,371 | 3,431 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (67) | (210) |
Fair Market Value | $ 1,304 | 3,221 |
Long-Term | Corporate Debt Securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Cost | 7,692 | |
Gross Unrealized Gains | 0 | |
Gross Unrealized Losses | (280) | |
Fair Market Value | $ 7,412 |
INVESTMENTS - Summary of Fair V
INVESTMENTS - Summary of Fair Value of Investments Measured on Recurring Basis (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Sep. 30, 2022 |
Assets: | ||
Short-term investments: | $ 74,700 | $ 58,268 |
Long-term investments: | 1,304 | 10,633 |
Total assets at fair value | 76,004 | 68,901 |
Current liabilities: | ||
Acquisition-related contingent consideration | 7,976 | 5,920 |
Total liabilities at fair value | 7,976 | 5,920 |
U.S. Treasury | ||
Assets: | ||
Short-term investments: | 40,254 | 5,882 |
Long-term investments: | 1,304 | 3,221 |
Corporate debt securities | ||
Assets: | ||
Short-term investments: | 34,446 | 31,537 |
Long-term investments: | 7,412 | |
Commercial paper | ||
Assets: | ||
Short-term investments: | 18,022 | |
Foreign government and agency securities | ||
Assets: | ||
Short-term investments: | 2,827 | |
Quoted Prices in Active Markets (Level 1) | ||
Assets: | ||
Short-term investments: | 40,254 | 5,882 |
Long-term investments: | 1,304 | 3,221 |
Total assets at fair value | 41,558 | 9,103 |
Current 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: | 40,254 | 5,882 |
Long-term investments: | 1,304 | 3,221 |
Quoted Prices in Active Markets (Level 1) | Corporate debt securities | ||
Assets: | ||
Short-term investments: | 0 | 0 |
Long-term investments: | 0 | |
Quoted Prices in Active Markets (Level 1) | Commercial paper | ||
Assets: | ||
Short-term investments: | 0 | |
Quoted Prices in Active Markets (Level 1) | Foreign government and agency securities | ||
Assets: | ||
Short-term investments: | 0 | |
Significant Other Observable Inputs (Level 2) | ||
Assets: | ||
Short-term investments: | 34,446 | 52,386 |
Long-term investments: | 0 | 7,412 |
Total assets at fair value | 34,446 | 59,798 |
Current liabilities: | ||
Acquisition-related contingent consideration | 7,976 | 0 |
Total liabilities at fair value | 7,976 | 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) | Corporate debt securities | ||
Assets: | ||
Short-term investments: | 34,446 | 31,537 |
Long-term investments: | 7,412 | |
Significant Other Observable Inputs (Level 2) | Commercial paper | ||
Assets: | ||
Short-term investments: | 18,022 | |
Significant Other Observable Inputs (Level 2) | Foreign government and agency securities | ||
Assets: | ||
Short-term investments: | 2,827 | |
Significant Unobservable Inputs (Level 3) | ||
Assets: | ||
Short-term investments: | 0 | 0 |
Long-term investments: | 0 | 0 |
Total assets at fair value | 0 | 0 |
Current liabilities: | ||
Acquisition-related contingent consideration | 0 | 5,920 |
Total liabilities at fair value | 0 | 5,920 |
Significant Unobservable Inputs (Level 3) | U.S. Treasury | ||
Assets: | ||
Short-term investments: | 0 | 0 |
Long-term investments: | 0 | 0 |
Significant Unobservable Inputs (Level 3) | Corporate debt securities | ||
Assets: | ||
Short-term investments: | $ 0 | 0 |
Long-term investments: | 0 | |
Significant Unobservable Inputs (Level 3) | Commercial paper | ||
Assets: | ||
Short-term investments: | 0 | |
Significant Unobservable Inputs (Level 3) | Foreign government and agency securities | ||
Assets: | ||
Short-term investments: | $ 0 |
INVESTMENTS - Summary of Contin
INVESTMENTS - Summary of Contingent Consideration Measured at Fair Value (Details) - Contingent Consideration $ in Thousands | 12 Months Ended |
Sep. 30, 2023 USD ($) | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Beginning balance | $ 5,920 |
Significant Unobservable Inputs (Level 3) | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Beginning balance | 5,920 |
Expenses recorded due to changes in fair value | 2,056 |
Ending balance | $ 7,976 |
INVESTMENTS - Summary of Fair_2
INVESTMENTS - Summary of Fair Value Measurement Inputs and Valuation Techniques (Details) $ in Thousands | Sep. 30, 2022 USD ($) |
Measurement Input, Weighted-Average Cost Of Capital | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Business combination, contingent consideration, liability, measurement input | 0.1480 |
Measurement Input, Revenue Weight-Average Cost Of Capital | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Business combination, contingent consideration, liability, measurement input | 0.0440 |
Measurement Input, Revenue Volatility | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Business combination, contingent consideration, liability, measurement input | 0.20 |
Contingent Consideration | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Acquisition-related contingent consideration | $ 5,920 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Goodwill | $ 123,548 | $ 115,632 | |
Disclosure - Goodwill and Intangible Assets - Additional Information (Detail) [Line Items] | |||
Goodwill | 123,548 | 115,632 | |
Amortization of intangible assets | 16,992 | 13,547 | $ 7,505 |
Acquisition-Related Costs and Expenses | |||
Disclosure - Goodwill and Intangible Assets - Additional Information (Detail) [Line Items] | |||
Amortization of intangible assets | $ 17,000 | $ 13,500 | $ 7,500 |
Minimum | |||
Disclosure - Goodwill and Intangible Assets - Additional Information (Detail) [Line Items] | |||
Estimated useful lives of intangible assets (in years) | 3 years | ||
Maximum | |||
Disclosure - Goodwill and Intangible Assets - Additional Information (Detail) [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 | 12 Months Ended |
Sep. 30, 2023 USD ($) | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | $ 115,632 |
Foreign currency effect on goodwill | 7,916 |
Goodwill, ending balance | $ 123,548 |
GOODWILL AND INTANGIBLE ASSET_4
GOODWILL AND INTANGIBLE ASSETS - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Indefinite-lived Intangible Assets [Line Items] | ||
Cost | $ 128,617 | $ 128,617 |
Accumulated Amortization | 63,943 | 52,861 |
Total | $ 64,674 | $ 75,756 |
Completed technologies | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Weighted Average Amortization Period (in years) | 6 years 10 months 24 days | 6 years 10 months 24 days |
Cost | $ 95,761 | $ 95,761 |
Accumulated Amortization | 39,254 | 32,265 |
Total | $ 56,507 | $ 63,496 |
Customer relationships | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Weighted Average Amortization Period (in years) | 4 years 8 months 12 days | 4 years 8 months 12 days |
Cost | $ 25,168 | $ 25,168 |
Accumulated Amortization | 21,396 | 18,241 |
Total | $ 3,772 | $ 6,927 |
Trade names | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Weighted Average Amortization Period (in years) | 5 years | 5 years |
Cost | $ 7,088 | $ 7,088 |
Accumulated Amortization | 2,967 | 2,174 |
Total | $ 4,121 | $ 4,914 |
Covenants not to compete | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Weighted Average Amortization Period (in years) | 3 years | 3 years |
Cost | $ 600 | $ 600 |
Accumulated Amortization | 326 | 181 |
Total | $ 274 | $ 419 |
GOODWILL AND INTANGIBLE ASSET_5
GOODWILL AND INTANGIBLE ASSETS - Schedule of Estimated Future Amortization of Intangible Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Sep. 30, 2022 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2024 | $ 14,650 | |
2025 | 13,404 | |
2026 | 12,207 | |
2027 | 11,095 | |
2028 | 9,418 | |
Thereafter | 3,900 | |
Total | $ 64,674 | $ 75,756 |
STOCKHOLDERS_ EQUITY - Stock-ba
STOCKHOLDERS’ EQUITY - Stock-based Compensation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2021 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Stock-based compensation expense included in expenses | $ 10,463 | $ 13,346 | $ 11,532 |
Cost of revenue | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Stock-based compensation expense included in expenses | 468 | 289 | 339 |
Selling and marketing | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Stock-based compensation expense included in expenses | 3,023 | 4,383 | 3,399 |
Research and development | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Stock-based compensation expense included in expenses | 2,757 | 3,701 | 3,218 |
General and administrative | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Stock-based compensation expense included in expenses | $ 4,215 | $ 4,973 | $ 4,576 |
STOCKHOLDERS_ EQUITY - Narrativ
STOCKHOLDERS’ EQUITY - Narrative (Details) | 12 Months Ended | ||||||||||||
Nov. 06, 2018 $ / shares shares | Sep. 30, 2023 USD ($) $ / shares shares | Sep. 30, 2022 USD ($) $ / shares shares | Sep. 30, 2021 USD ($) shares | Oct. 02, 2023 shares | Oct. 22, 2021 shares | Jun. 15, 2021 USD ($) | Sep. 30, 2020 shares | Jan. 31, 2020 shares | Feb. 28, 2019 | Oct. 23, 2018 $ / right $ / shares shares | Mar. 07, 2018 shares | Mar. 10, 2017 shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Options granted (in shares) | 0 | 0 | 0 | ||||||||||
Unrecognized compensation expense related to options outstanding | $ | $ 20,300,000 | ||||||||||||
Weighted average period for unrecognized compensation expense expected to be recognized | 2 years 3 months 18 days | ||||||||||||
Options to purchase common stock outstanding (in shares) | 651,269 | 781,092 | 816,717 | 1,162,505 | |||||||||
Recognized compensation expense | $ | $ 10,463,000 | $ 13,346,000 | $ 11,532,000 | ||||||||||
Amount authorized under share repurchase program | $ | $ 15,000,000 | ||||||||||||
Amount of shares repurchased | $ | $ 14,800,000 | ||||||||||||
Number of shares repurchased (in shares) | 886,204 | ||||||||||||
Average price of shares repurchased (in dollars per share) | $ / shares | $ 16.73 | ||||||||||||
Preferred stock, par value per share (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | |||||||||||
Percentage of common stock outstanding for acquiring person under right agreement | 4.90% | ||||||||||||
Series B Junior 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 | 0.001 | ||||||||||||
Preferred stock, par value per share (in dollars per share) | $ / shares | $ 0.001 | ||||||||||||
Preferred stock, purchase price per right (in dollars per right) | $ / right | 35 | ||||||||||||
Preferred stock, redemption price per right (in dollars per share) | $ / shares | $ 0.0001 | ||||||||||||
Preferred stock, number of rights expired, redeemed or exchanged (in shares) | 0 | ||||||||||||
RSUs | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Weighted average period for unrecognized compensation expense expected to be recognized | 2 years 6 months | ||||||||||||
Awards outstanding (in shares) | 2,188,296 | 2,441,677 | 2,411,267 | 2,661,943 | |||||||||
Recognized compensation expense | $ | $ 7,100,000 | $ 9,400,000 | $ 8,100,000 | ||||||||||
Unrecognized compensation expense | $ | $ 16,700,000 | ||||||||||||
Performance RSUs | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Weighted average period for unrecognized compensation expense expected to be recognized | 1 year 8 months 12 days | ||||||||||||
Awards outstanding (in shares) | 730,393 | 919,456 | 528,724 | 353,556 | |||||||||
Recognized compensation expense | $ | $ 2,700,000 | $ 3,000,000 | $ 1,300,000 | ||||||||||
Unrecognized compensation expense | $ | $ 3,400,000 | ||||||||||||
Stock Options | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Weighted average period for unrecognized compensation expense expected to be recognized | 1 month 6 days | ||||||||||||
Recognized compensation expense | $ | $ 400,000 | 500,000 | 700,000 | ||||||||||
Unrecognized compensation expense related to options outstanding | $ | 9,000 | ||||||||||||
Performance Options | Chief Executive Officer | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Number of common stock reserved for future grants (in shares) | 800,000 | ||||||||||||
Recognized compensation expense | $ | $ 0 | 100,000 | 800,000 | ||||||||||
Exercise price per share (in dollars per share) | $ / shares | $ 9.50 | ||||||||||||
2020 Plan | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Common stock reserved for issuance (in shares) | 4,500,000 | ||||||||||||
Number of common stock reserved for future grants (in shares) | 1,425,042 | ||||||||||||
2020 Plan | Subsequent Event | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Common stock reserved for issuance (in shares) | 5,108,000 | ||||||||||||
2020 Plan | RSUs | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Awards outstanding (in shares) | 1,834,474 | ||||||||||||
2020 Plan | Performance RSUs | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Awards outstanding (in shares) | 730,393 | ||||||||||||
Prior Plans | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Common stock reserved for issuance (in shares) | 107,903 | ||||||||||||
Options to purchase common stock outstanding (in shares) | 434,090 | ||||||||||||
Prior Plans | RSUs | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Awards outstanding (in shares) | 94,309 | ||||||||||||
ESPP | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Common stock reserved for issuance (in shares) | 1,000,000 | ||||||||||||
Number of common stock reserved for future grants (in shares) | 270,876 | ||||||||||||
Issuance of common stock under employee stock purchase plan (in shares) | 729,124 | ||||||||||||
Discount rate from market price offering date | 15% | ||||||||||||
Recognized compensation expense | $ | $ 300,000 | $ 400,000 | $ 600,000 | ||||||||||
Director Plan | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Common stock reserved for issuance (in shares) | 1,500,000 | ||||||||||||
Number of common stock reserved for future grants (in shares) | 0 | ||||||||||||
Director Plan | RSUs | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Options to purchase common stock outstanding (in shares) | 259,513 |
STOCKHOLDERS_ EQUITY - Stock Op
STOCKHOLDERS’ EQUITY - Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2020 | |
Number of Shares | ||||
Outstanding, beginning balance (in shares) | 781,092 | 816,717 | 1,162,505 | |
Granted (in shares) | 0 | 0 | 0 | |
Exercised (in shares) | (98,952) | (35,625) | (329,878) | |
Canceled (in shares) | (30,871) | 0 | (15,910) | |
Outstanding, ending balance (in shares) | 651,269 | 781,092 | 816,717 | 1,162,505 |
Weighted- Average Exercise Price | ||||
Outstanding, beginning balance (in dollars per share) | $ 7.46 | $ 7.42 | $ 7.51 | |
Granted (in dollars per share) | 0 | 0 | 0 | |
Exercised (in dollars per share) | 7.44 | 6.68 | 7.63 | |
Canceled (in dollars per share) | 9.49 | 0 | 9.41 | |
Outstanding, ending balance (in dollars per share) | $ 7.37 | $ 7.46 | $ 7.42 | $ 7.51 |
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Additional Disclosures [Abstract] | ||||
Vested and expected to vest (in shares) | 651,269 | |||
Exercisable (in shares) | 647,884 | |||
Vested and expected to vest, weighted-average exercise price (in dollars per share) | $ 7.37 | |||
Exercisable, weighted-average exercise price (in dollars per share) | $ 7.35 | |||
Outstanding, weighted-average remaining contractual terms (in years) | 3 years 7 months 6 days | 3 years 8 months 12 days | 5 years 9 months 18 days | 6 years 1 month 6 days |
Vested and expected to vest, weighted-average remaining contractual term (in years) | 3 years 7 months 6 days | |||
Exercisable, weighted-average remaining contractual term (in years) | 3 years 7 months 6 days | |||
Outstanding, aggregate intrinsic value | $ 2,185 | $ 1,512 | $ 9,046 | $ 6,081 |
Exercised, aggregate intrinsic value | 338 | $ 279 | $ 2,670 | |
Vested and expected to vest, aggregate intrinsic value | 2,185 | |||
Exercisable, aggregate intrinsic value | $ 2,181 |
STOCKHOLDERS_ EQUITY - RSU Acti
STOCKHOLDERS’ EQUITY - RSU Activity (Details) - RSUs - $ / shares | 12 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2021 | |
Number of Shares | |||
Beginning balance (in shares) | 2,441,677 | 2,411,267 | 2,661,943 |
Granted (in shares) | 1,101,925 | 1,272,917 | 887,049 |
Settled (in shares) | (665,635) | (898,178) | (975,764) |
Canceled (in shares) | (689,671) | (344,329) | (161,961) |
Ending balance (in shares) | 2,188,296 | 2,441,677 | 2,411,267 |
Weighted- Average Fair Value Per Share | |||
Beginning balance (in dollars per share) | $ 12.29 | $ 9.99 | $ 7.95 |
Granted (in dollars per share) | 10.24 | 14.43 | 13.35 |
Settled (in dollars per share) | 11.33 | 9.57 | 7.64 |
Canceled (in dollars per share) | 12.49 | 11.16 | 8.94 |
Ending balance (in dollars per share) | $ 11.49 | $ 12.29 | $ 9.99 |
STOCKHOLDERS_ EQUITY - Performa
STOCKHOLDERS’ EQUITY - Performance RSU Activity (Details) - Performance RSUs - $ / shares | 12 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2021 | |
Number of Shares | |||
Beginning balance (in shares) | 919,456 | 528,724 | 353,556 |
Granted (in shares) | 325,837 | 629,279 | 284,765 |
Settled (in shares) | (27,245) | (176,864) | (90,345) |
Canceled (in shares) | (487,655) | (61,683) | (19,252) |
Ending balance (in shares) | 730,393 | 919,456 | 528,724 |
Weighted- Average Fair Market Value Per Share | |||
Beginning balance (in dollars per share) | $ 13.43 | $ 9.17 | $ 6.06 |
Granted (in dollars per share) | 10.23 | 15.60 | 11.84 |
Settled (in dollars per share) | 9.25 | 8.42 | 6.06 |
Canceled (in dollars per share) | 11.61 | 13.51 | 6.06 |
Ending balance (in dollars per share) | $ 13.37 | $ 13.43 | $ 9.17 |
INCOME TAXES - Income Tax Benef
INCOME TAXES - Income Tax Benefit (Provision) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | |||||||||||
Domestic | $ 23,836 | $ 11,483 | $ 10,966 | ||||||||
Foreign | (13,495) | (7,881) | (2,164) | ||||||||
Income before income taxes | 10,341 | 3,602 | 8,802 | ||||||||
Current: | |||||||||||
Federal | (4,414) | (233) | 0 | ||||||||
State | (1,215) | (325) | (78) | ||||||||
Foreign | (1,023) | (1,800) | (1,119) | ||||||||
Total current provision for income taxes | (6,652) | (2,358) | (1,197) | ||||||||
Deferred: | |||||||||||
Federal | (659) | (1,400) | (1,387) | ||||||||
State | 819 | 513 | 457 | ||||||||
Foreign | 4,178 | 3,337 | 1,303 | ||||||||
Total deferred provision for income taxes | 4,338 | 2,450 | 373 | ||||||||
Total tax benefit (expense) | $ 2,123 | $ (783) | $ (1,808) | $ (1,846) | $ (976) | $ 880 | $ 20 | $ 168 | $ (2,314) | $ 92 | $ (824) |
INCOME TAXES - Significant Comp
INCOME TAXES - Significant Components of Net Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Sep. 30, 2022 |
Deferred tax assets: | ||
Stock-based compensation | $ 2,357 | $ 1,793 |
Net operating loss carryforwards | 11,548 | 6,656 |
Research credit carryforwards | 4,336 | 7,747 |
Lease liability | 1,185 | 859 |
Intangibles | 4,606 | 0 |
Other, net | 852 | 1,117 |
Total deferred assets | 24,884 | 18,172 |
Deferred tax liabilities: | ||
Right of use asset | (1,032) | (633) |
Intangibles | (15,914) | (14,139) |
Total deferred liabilities | (16,946) | (14,772) |
Valuation allowance for net deferred tax assets | (2,769) | (2,868) |
Net deferred tax asset | $ 5,169 | $ 532 |
INCOME TAXES - Narrative (Detai
INCOME TAXES - Narrative (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Income Taxes [Line Items] | ||
Net increase (decrease) in total valuation allowance | $ 100,000 | $ (2,100,000) |
Unrecognized tax benefits that will impact the company's effective tax rate | 2,400,000 | |
Accrued interest or penalties related to uncertain tax positions | 0 | |
State | ||
Income Taxes [Line Items] | ||
Net operating losses subject to expiration | 25,200,000 | |
State | Research and Development Tax Credit | California | ||
Income Taxes [Line Items] | ||
Tax credit carryforwards | 4,400,000 | |
Foreign Tax Authority | Research and Development Tax Credit | ||
Income Taxes [Line Items] | ||
Tax credit carryforwards | 800,000 | |
Federal | ||
Income Taxes [Line Items] | ||
Net operating loss carryforwards | 0 | |
Federal | Research and Development Tax Credit | ||
Income Taxes [Line Items] | ||
Tax credit carryforwards | $ 0 |
INCOME TAXES - Income Taxes Com
INCOME TAXES - Income Taxes Computed Using Federal Income Tax Rate (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | |||||||||||
Amount computed using statutory rate | $ (2,172) | $ (756) | $ (1,849) | ||||||||
Net change in valuation allowance for net deferred tax assets | 292 | (1,702) | (19) | ||||||||
Other | (477) | 1,605 | 0 | ||||||||
Foreign rate differential | 504 | 268 | 13 | ||||||||
Non-deductible items | (14) | (64) | (141) | ||||||||
Transaction costs | 0 | (411) | 0 | ||||||||
State income tax | (100) | 251 | (276) | ||||||||
Research and development credits | 791 | 1,166 | 1,248 | ||||||||
Foreign income tax | 0 | 0 | (15) | ||||||||
Contingent consideration | (432) | 285 | 0 | ||||||||
Uncertain tax positions | (184) | (318) | 0 | ||||||||
Stock compensation, net | (522) | (232) | 215 | ||||||||
Total tax benefit (expense) | $ 2,123 | $ (783) | $ (1,808) | $ (1,846) | $ (976) | $ 880 | $ 20 | $ 168 | $ (2,314) | $ 92 | $ (824) |
INCOME TAXES - Reconciliation o
INCOME TAXES - Reconciliation of Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2021 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Gross unrecognized tax benefits at the beginning of the year | $ 2,664 | $ 2,114 | $ 1,810 |
Additions from tax positions taken in the current year | 330 | 484 | 268 |
Additions from tax positions taken in prior years | 0 | 66 | 36 |
Reductions from tax positions taken in prior years | (9) | 0 | 0 |
Gross unrecognized tax benefits at end of the year | $ 2,985 | $ 2,664 | $ 2,114 |
CONVERTIBLE SENIOR NOTES - Carr
CONVERTIBLE SENIOR NOTES - Carrying Value of 2026 Notes (Details) - Convertible Debt - 2026 Notes - USD ($) | Sep. 30, 2023 | Sep. 30, 2022 | Feb. 28, 2021 | Feb. 05, 2021 |
Debt Instrument [Line Items] | ||||
Debt interest rate (as a percent) | 0.75% | 0.75% | ||
Debt issued | $ 155,300,000 | $ 155,300,000 | ||
Principal amount | 155,250,000 | $ 155,250,000 | ||
Less: unamortized discount and issuance costs, net of amortization | (19,734,000) | (27,280,000) | ||
Carrying amount | $ 135,516,000 | $ 127,970,000 |
CONVERTIBLE SENIOR NOTES - Narr
CONVERTIBLE SENIOR NOTES - Narrative (Details) | 8 Months Ended | 12 Months Ended | ||||||
Feb. 05, 2021 USD ($) patent $ / shares | Sep. 30, 2021 USD ($) | Sep. 30, 2023 USD ($) shares | Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Jan. 13, 2023 | Feb. 28, 2021 USD ($) | Feb. 02, 2021 $ / shares | |
Debt Instrument [Line Items] | ||||||||
Payment costs related to hedge transactions | $ 0 | $ 0 | $ 33,192,000 | |||||
Derivative Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Convertible senior notes | |||||||
Increase in additional paid-in-capital for sale or warrants | $ 23,909,000 | |||||||
Convertible Debt | 2026 Notes | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt issued | $ 155,300,000 | $ 155,300,000 | ||||||
Debt interest rate (as a percent) | 0.75% | 0.75% | ||||||
Debt conversion ratio (per $1,000 principal amount) | 0.0479731000 | |||||||
Debt conversion price (in dollars per share) | $ / shares | $ 20.85 | |||||||
Conversion price premium percentage | 0.375 | |||||||
Proceeds from debt offerings, net of discounts, commissions and expenses | $ 149,700,000 | |||||||
Debt issuance costs | $ 5,500,000 | |||||||
Remaining unamortized debt discount | $ 19,734,000 | $ 27,280,000 | ||||||
Convertible Debt | 2026 Notes | Interest Rate Period One | ||||||||
Debt Instrument [Line Items] | ||||||||
Additional interest (as a percent) | 0.25% | |||||||
Interest rate threshold period | 90 days | |||||||
Convertible Debt | 2026 Notes | Interest Rate Period Two | ||||||||
Debt Instrument [Line Items] | ||||||||
Additional interest (as a percent) | 0.50% | |||||||
Interest rate threshold period | 180 days | |||||||
Convertible Debt | 2026 Notes | Common Stock | ||||||||
Debt Instrument [Line Items] | ||||||||
Share price (in dollars per share) | $ / shares | $ 15.16 | |||||||
Convertible Debt | 2026 Notes | During any Calendar Quarter Commencing after the Calendar Quarter Ending on June 30, 2021 | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt conversion price percentage | 1.30 | |||||||
Trading days in period | patent | 20 | |||||||
Consecutive trading days in period | patent | 30 | |||||||
Convertible Debt | 2026 Notes | Measurement Period | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt conversion price percentage | 0.98 | |||||||
Consecutive trading days in period | patent | 5 | |||||||
Convertible Debt | 2026 Notes | Embedded Conversion Derivative | ||||||||
Debt Instrument [Line Items] | ||||||||
Payment costs related to hedge transactions | $ 9,300,000 | |||||||
Embedded derivative, fair value of embedded derivative liability | 33,200,000 | |||||||
Value of remaining embedded derivative allocated to host contract | $ 116,500,000 | |||||||
Derivative interest rate | 6.71% | |||||||
Remaining unamortized debt discount | $ 19,700,000 | |||||||
Remaining debt discount amortization period | 2 years 3 months 18 days | |||||||
Convertible Debt | Additional Notes | ||||||||
Debt Instrument [Line Items] | ||||||||
Option period to purchase additional notes | 13 days | |||||||
Additional aggregate principal amount purchased | $ 20,300,000 | |||||||
Convertible Debt | Notes Hedge | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt conversion price (in dollars per share) | $ / shares | $ 20.85 | |||||||
Conversion price premium percentage | 0.750 | |||||||
Number of shares that can initially be converted into common stock | patent | 7,400,000 | |||||||
Strike price of warrants (in dollar per share) | $ / shares | $ 26.53 | |||||||
Senior notes hedge balance | $ 33,200,000 | |||||||
Increase in additional paid-in-capital for sale or warrants | $ 23,900,000 | |||||||
Warrants exercised (in shares) | shares | 0 | |||||||
Warrants outstanding (in shares) | shares | 0 | |||||||
Shares purchased under the notes hedge (in shares) | shares | 0 | |||||||
Convertible Debt | Notes Hedge | Observation Period | ||||||||
Debt Instrument [Line Items] | ||||||||
Consecutive trading days in period | patent | 80 | |||||||
Incremental dilution of earnings per share of warrants (in shares) | shares | 0 |
CONVERTIBLE SENIOR NOTES - Inte
CONVERTIBLE SENIOR NOTES - Interest Costs Recognized on 2026 Notes (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2021 | |
Debt Instrument [Line Items] | |||||||||||
Total interest expense recognized | $ 2,401 | $ 2,362 | $ 2,163 | $ 2,137 | $ 2,107 | $ 2,077 | $ 2,040 | $ 2,008 | $ 9,063 | $ 8,232 | $ 5,129 |
Convertible Debt | 2026 Notes | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Contractual interest expense | 1,615 | 1,179 | |||||||||
Amortization of debt discount and issuance costs | 7,546 | 7,053 | |||||||||
Total interest expense recognized | $ 9,161 | $ 8,232 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) $ in Thousands, € in Millions | 1 Months Ended | 2 Months Ended | 3 Months Ended | 12 Months Ended | ||||||||||||||||||||
Feb. 16, 2023 USD ($) patent | Sep. 02, 2022 EUR (€) | Jun. 07, 2022 EUR (€) | Jun. 02, 2022 USD ($) | Dec. 13, 2021 USD ($) | Jul. 21, 2021 patent | Mar. 31, 2021 patent | Dec. 18, 2020 patent | Dec. 04, 2020 patent | Sep. 30, 2020 patent | Jan. 10, 2020 USD ($) patent | Nov. 06, 2019 USD ($) patent day | Jul. 31, 2019 patent | Aug. 17, 2018 patent | Jul. 07, 2018 patent | May 31, 2022 USD ($) patent | Mar. 31, 2021 patent | Sep. 30, 2020 patent | Jan. 26, 2021 patent | Feb. 23, 2021 patent | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Jun. 19, 2020 USD ($) | |
Employee 401(k) Plan | ||||||||||||||||||||||||
Company contribution, percent of designated deferral of eligible compensation | 50% | |||||||||||||||||||||||
Company contribution, percent of employee compensation eligible for company match | 6% | |||||||||||||||||||||||
Employer contribution related to 401(k) plan | $ | $ 500 | $ 700 | $ 700 | |||||||||||||||||||||
Maplebear, Inc (dba Instacart) | Subscription To Mobile Verify Advance Service | ||||||||||||||||||||||||
Claims | ||||||||||||||||||||||||
Other commitment, annual amount committed | $ | $ 1,200 | |||||||||||||||||||||||
Pending Litigation | General and Administrative | ||||||||||||||||||||||||
Claims | ||||||||||||||||||||||||
Legal fees incurred related to third-party claims against customers | $ | 1,400 | |||||||||||||||||||||||
Pending Litigation | UrbanFT, Inc. | ||||||||||||||||||||||||
Claims | ||||||||||||||||||||||||
Number of patents allegedly infringed | patent | 2 | 5 | ||||||||||||||||||||||
Number of patents invalid | patent | 2 | |||||||||||||||||||||||
Number of patents not infringed | patent | 2 | |||||||||||||||||||||||
Global Equity & Corporate Consulting, S.L. | ICAR Vision Systems, S.L. | Pending Litigation | ||||||||||||||||||||||||
Claims | ||||||||||||||||||||||||
Damages awarded | € 0.8 | $ 800 | ||||||||||||||||||||||
Global Equity & Corporate Consulting, S.L.- Breach of Services Agreement | ICAR Vision Systems, S.L. | Pending Litigation | ||||||||||||||||||||||||
Claims | ||||||||||||||||||||||||
Settlement interest (as a percent) | 30% | |||||||||||||||||||||||
Litigation settlement interest | € | € 1.1 | |||||||||||||||||||||||
Claims against the escrow funds | € | 0.9 | |||||||||||||||||||||||
Escrow deposit | € | 0.2 | |||||||||||||||||||||||
Accrued interest | € | 16,475 | |||||||||||||||||||||||
Litigation expense | € | € 10,995 | |||||||||||||||||||||||
USAA | Pending Litigation | Wells Fargo | ||||||||||||||||||||||||
Claims | ||||||||||||||||||||||||
Number of patents allegedly infringed | 2 | 3 | 5 | 4 | 2 | 4 | ||||||||||||||||||
Number of patents infringed | patent | 1 | 1 | ||||||||||||||||||||||
Amount awarded in damages to other party | $ | $ 102,000 | $ 200,000 | ||||||||||||||||||||||
Number of patents dropped | patent | 2 | |||||||||||||||||||||||
Number of patents invalid | patent | 1 | |||||||||||||||||||||||
Number of patents instituted | patent | 3 | |||||||||||||||||||||||
Number of patents denied institution | patent | 1 | |||||||||||||||||||||||
USAA | Pending Litigation | PNC Bank | ||||||||||||||||||||||||
Claims | ||||||||||||||||||||||||
Number of patents allegedly infringed | patent | 2 | 2 | 2 | 1 | 2 | |||||||||||||||||||
Amount awarded in damages to other party | $ | $ 218,000 | |||||||||||||||||||||||
Number of patents denied institution | patent | 6 | 2 | ||||||||||||||||||||||
USAA | Settled Litigation | PNC Bank | ||||||||||||||||||||||||
Claims | ||||||||||||||||||||||||
Number of patents infringed | patent | 1 | |||||||||||||||||||||||
Amount awarded in damages to other party | $ | $ 4,300 | |||||||||||||||||||||||
UrbanFT, Inc. | Settled Litigation | ||||||||||||||||||||||||
Claims | ||||||||||||||||||||||||
Amount awarded to the Company | $ | $ 2,300 | |||||||||||||||||||||||
UrbanFT, Inc. | Settled Litigation | Compensatory Damages | ||||||||||||||||||||||||
Claims | ||||||||||||||||||||||||
Amount awarded to the Company | $ | 1,700 | |||||||||||||||||||||||
UrbanFT, Inc. | Settled Litigation | Costs of Judgement Awarded | ||||||||||||||||||||||||
Claims | ||||||||||||||||||||||||
Amount awarded to the Company | $ | 2,600 | |||||||||||||||||||||||
UrbanFT, Inc. | Settled Litigation | Attorneys' Fees | ||||||||||||||||||||||||
Claims | ||||||||||||||||||||||||
Amount awarded to the Company | $ | $ 600 | |||||||||||||||||||||||
Maplebear, Inc (dba Instacart) | Pending Litigation | ||||||||||||||||||||||||
Claims | ||||||||||||||||||||||||
Amount claimed during court proceedings | $ | $ 2,000 |
LEASES - Schedule of Lease Cost
LEASES - Schedule of Lease Cost (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Leases [Abstract] | ||
Operating lease cost | $ 2,025 | $ 1,881 |
Variable lease cost | 319 | 385 |
Total lease cost | $ 2,344 | $ 2,266 |
LEASES - Schedule of Leases Sta
LEASES - Schedule of Leases Statement of Financial Position (Details) | Sep. 30, 2023 | Sep. 30, 2022 |
Leases [Abstract] | ||
Weighted-average remaining lease term (years) - operating leases | 4 years 3 months 18 days | 4 years 6 months |
Weighted-average discount rate - operating leases | 3.70% | 3.50% |
LEASES - Schedule of Maturities
LEASES - Schedule of Maturities of Operating Lease Liabiliities (Details) $ in Thousands | Sep. 30, 2023 USD ($) |
Leases [Abstract] | |
2024 | $ 1,985 |
2025 | 713 |
2026 | 701 |
2027 | 616 |
2028 | 413 |
Thereafter | 574 |
Total lease payments | 5,002 |
Less: amount representing interest | (233) |
Present value of future lease payments | 4,769 |
Minimum lease payments for an office lease signed by not yet commenced | $ 1,800 |
REVENUE CONCENTRATION - Narrati
REVENUE CONCENTRATION - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2021 | |
Concentration Risk [Line Items] | |||||||||||
Revenue | $ 37,656 | $ 43,070 | $ 46,123 | $ 45,703 | $ 39,626 | $ 39,195 | $ 33,510 | $ 32,473 | $ 172,552 | $ 144,804 | $ 119,797 |
Accounts receivable, net | 32,132 | 35,922 | 32,132 | 35,922 | |||||||
All other countries | |||||||||||
Concentration Risk [Line Items] | |||||||||||
Revenue | 37,595 | 31,305 | 26,965 | ||||||||
Revenue | Customer Concentration Risk | |||||||||||
Concentration Risk [Line Items] | |||||||||||
Revenue | $ 27,700 | $ 25,000 | $ 20,200 | ||||||||
Revenue | Customer Concentration Risk | Customer One | |||||||||||
Concentration Risk [Line Items] | |||||||||||
Concentration risk (as a percent) | 16% | 17% | 17% | ||||||||
Accounts Receivable | Customer Concentration Risk | |||||||||||
Concentration Risk [Line Items] | |||||||||||
Accounts receivable, net | $ 2,700 | $ 8,000 | $ 2,700 | $ 8,000 | $ 3,400 | ||||||
Long-Term Assets | Geographic Concentration Risk | All other countries | |||||||||||
Concentration Risk [Line Items] | |||||||||||
Concentration risk (as a percent) | 72% | 68% | |||||||||
Long-Term Assets, Excluding Goodwill and Intangible Assets | Geographic Concentration Risk | All other countries | |||||||||||
Concentration Risk [Line Items] | |||||||||||
Concentration risk (as a percent) | 23% | 18% |
REVENUE CONCENTRATION - Schedul
REVENUE CONCENTRATION - Schedule of Revenue from External Customers by Geographic Areas (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2021 | |
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue | $ 37,656 | $ 43,070 | $ 46,123 | $ 45,703 | $ 39,626 | $ 39,195 | $ 33,510 | $ 32,473 | $ 172,552 | $ 144,804 | $ 119,797 |
United States | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue | 134,957 | 113,499 | 92,832 | ||||||||
All other countries | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue | $ 37,595 | $ 31,305 | $ 26,965 |
QUARTERLY INFORMATION (UNAUDI_3
QUARTERLY INFORMATION (UNAUDITED) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2021 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Revenue | $ 37,656 | $ 43,070 | $ 46,123 | $ 45,703 | $ 39,626 | $ 39,195 | $ 33,510 | $ 32,473 | $ 172,552 | $ 144,804 | $ 119,797 |
Cost of revenue (exclusive of depreciation & amortization) | 6,272 | 5,712 | 5,898 | 5,069 | 5,217 | 5,784 | 4,451 | 4,556 | |||
Operating expenses | 34,671 | 35,566 | 31,539 | 32,261 | 30,610 | 32,518 | 26,379 | 23,089 | |||
Operating income (loss) | (3,287) | 1,792 | 8,686 | 8,373 | 3,799 | 893 | 2,680 | 4,828 | 15,564 | 12,200 | 13,277 |
Interest expense | 2,401 | 2,362 | 2,163 | 2,137 | 2,107 | 2,077 | 2,040 | 2,008 | 9,063 | 8,232 | 5,129 |
Other income, net | 2,121 | 925 | 454 | 340 | (365) | 89 | (225) | 135 | 3,840 | (366) | 654 |
Income tax benefit (provision) | 2,123 | (783) | (1,808) | (1,846) | (976) | 880 | 20 | 168 | (2,314) | 92 | (824) |
Net income | $ (1,444) | $ (428) | $ 5,169 | $ 4,730 | $ 351 | $ (215) | $ 435 | $ 3,123 | $ 8,027 | $ 3,694 | $ 7,978 |
Net income (loss) per share: | |||||||||||
Basic income (loss) per share (in dollars per share) | $ (0.03) | $ (0.01) | $ 0.11 | $ 0.11 | $ 0.01 | $ 0 | $ 0.01 | $ 0.07 | $ 0.18 | $ 0.08 | $ 0.18 |
Shares used in calculating net income (loss) per share—basic (in shares) | 45,997 | 46,002 | 45,377 | 44,930 | 44,661 | 44,669 | 44,775 | 44,788 | 45,533 | 44,595 | 43,509 |
Diluted income (loss) per share (in dollars per share) | $ (0.03) | $ (0.01) | $ 0.11 | $ 0.10 | $ 0.01 | $ 0 | $ 0.01 | $ 0.07 | $ 0.17 | $ 0.08 | $ 0.18 |
Shares used in calculating net income (loss) per share - diluted (in shares) | 47,050 | 46,473 | 45,780 | 45,634 | 45,311 | 45,224 | 46,097 | 46,155 | 46,461 | 45,780 | 45,083 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - Revolving Credit Facility - Subsequent Event | Feb. 13, 2024 USD ($) |
SOFR | |
Subsequent Event [Line Items] | |
Unused revolving line facility fee (as a percent) | 0.25% |
Line of Credit | |
Subsequent Event [Line Items] | |
Maximum borrowing capacity | $ 35,000,000 |
Additional value, line of credit facility, maximum borrowing capacity | 15,000,000 |
Indebtedness amount | 500,000 |
Line of Credit | SOFR | |
Subsequent Event [Line Items] | |
Commitment fees | $ 87,500 |
Domestic Letter Of Credit | |
Subsequent Event [Line Items] | |
Cash deposit, percentage | 105% |
Foreign Letter Of Credit | |
Subsequent Event [Line Items] | |
Cash deposit, percentage | 115% |
REVISION OF PREVIOUSLY REPORT_3
REVISION OF PREVIOUSLY REPORTED CONSOLIDATED FINANCIAL STATEMENTS - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2021 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Contract liabilities (deferred revenue), current | $ 17,360 | $ 21,350 | $ 17,360 | $ 21,350 | |||||||
Accounts receivable, net | 32,132 | 35,922 | 32,132 | 35,922 | |||||||
Net operating loss carryforwards | 11,548 | 6,656 | 11,548 | 6,656 | |||||||
Impacts of foreign exchange | 4,600 | ||||||||||
Revenue | 37,656 | $ 43,070 | $ 46,123 | $ 45,703 | 39,626 | $ 39,195 | $ 33,510 | $ 32,473 | 172,552 | 144,804 | $ 119,797 |
Contract assets, current portion | 18,355 | 7,037 | 18,355 | 7,037 | |||||||
Income tax benefit (provision) | (2,123) | $ 783 | $ 1,808 | $ 1,846 | 976 | $ (880) | $ (20) | $ (168) | 2,314 | (92) | $ 824 |
Prepaid expenses | (3,513) | (1,946) | (3,513) | (1,946) | |||||||
Deferred income tax assets | (11,645) | (10,110) | (11,645) | (10,110) | |||||||
Income tax payables | 4,329 | 206 | 4,329 | 206 | |||||||
Other current liabilities | $ (1,482) | (2,402) | $ (1,482) | (2,402) | |||||||
Total Adjustments | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Contract liabilities (deferred revenue), current | 7,956 | 7,956 | |||||||||
Accounts receivable, net | 8,048 | 8,048 | |||||||||
Net operating loss carryforwards | 21,600 | 21,600 | |||||||||
Net operating loss carryforwards | 5,400 | 5,400 | |||||||||
Revenue | 861 | ||||||||||
Contract assets, current portion | 764 | 764 | |||||||||
Income tax benefit (provision) | 203 | ||||||||||
Prepaid expenses | 54 | 54 | |||||||||
Deferred income tax assets | 135 | 135 | |||||||||
Income tax payables | 12 | 12 | |||||||||
Other current liabilities | 7 | 7 | |||||||||
Adjustment 1 | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Contract liabilities (deferred revenue), current | 8,000 | 8,000 | |||||||||
Adjustment 2 | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Contract liabilities (deferred revenue), current | $ 200 | $ 200 |
REVISION OF PREVIOUSLY REPORT_4
REVISION OF PREVIOUSLY REPORTED CONSOLIDATED FINANCIAL STATEMENTS - Consolidated Balance Sheet (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2021 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Accounts receivable, net | $ 32,132 | $ 35,922 | $ 32,132 | $ 35,922 | |||||||
Contract assets, current portion | 18,355 | 7,037 | 18,355 | 7,037 | |||||||
Prepaid expenses | 3,513 | 1,946 | 3,513 | 1,946 | |||||||
Goodwill | 123,548 | 115,632 | 123,548 | 115,632 | |||||||
Deferred income tax assets | 11,645 | 10,110 | 11,645 | 10,110 | |||||||
Total assets | 405,375 | 364,479 | 405,375 | 364,479 | |||||||
Income tax payables | 4,329 | 206 | 4,329 | 206 | |||||||
Other current liabilities | 1,482 | 2,402 | 1,482 | 2,402 | |||||||
Deferred revenue, current portion | 17,360 | 21,350 | 17,360 | 21,350 | |||||||
Deferred income tax liabilities | 6,476 | 9,578 | 6,476 | 9,578 | |||||||
Total liabilities | 200,187 | 193,500 | 200,187 | 193,500 | |||||||
Revenue | $ 37,656 | $ 43,070 | $ 46,123 | $ 45,703 | 39,626 | $ 39,195 | $ 33,510 | $ 32,473 | $ 172,552 | 144,804 | $ 119,797 |
As Previously Reported | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Accounts receivable, net | 27,874 | 27,874 | |||||||||
Contract assets, current portion | 6,273 | 6,273 | |||||||||
Prepaid expenses | 2,000 | 2,000 | |||||||||
Goodwill | 120,186 | 120,186 | |||||||||
Deferred income tax assets | 10,245 | 10,245 | |||||||||
Total assets | 360,410 | 360,410 | |||||||||
Income tax payables | 194 | 194 | |||||||||
Other current liabilities | 2,409 | 2,409 | |||||||||
Deferred revenue, current portion | 13,394 | 13,394 | |||||||||
Deferred income tax liabilities | 14,132 | 14,132 | |||||||||
Total liabilities | 190,093 | 190,093 | |||||||||
Revenue | 143,943 | ||||||||||
Total Adjustments | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Accounts receivable, net | 8,048 | 8,048 | |||||||||
Contract assets, current portion | 764 | 764 | |||||||||
Prepaid expenses | (54) | (54) | |||||||||
Goodwill | (4,554) | (4,554) | |||||||||
Deferred income tax assets | (135) | (135) | |||||||||
Total assets | 4,069 | 4,069 | |||||||||
Income tax payables | 12 | 12 | |||||||||
Other current liabilities | (7) | (7) | |||||||||
Deferred revenue, current portion | 7,956 | 7,956 | |||||||||
Deferred income tax liabilities | (4,554) | (4,554) | |||||||||
Total liabilities | $ 3,407 | 3,407 | |||||||||
Revenue | $ 861 |
REVISION OF PREVIOUSLY REPORT_5
REVISION OF PREVIOUSLY REPORTED CONSOLIDATED FINANCIAL STATEMENTS - Schedule of Operations and Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2021 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Revenue | $ 37,656 | $ 43,070 | $ 46,123 | $ 45,703 | $ 39,626 | $ 39,195 | $ 33,510 | $ 32,473 | $ 172,552 | $ 144,804 | $ 119,797 |
Operating income | (3,287) | 1,792 | 8,686 | 8,373 | 3,799 | 893 | 2,680 | 4,828 | 15,564 | 12,200 | 13,277 |
Other expense, net | 2,121 | 925 | 454 | 340 | (365) | 89 | (225) | 135 | 3,840 | (366) | 654 |
Income tax benefit (provision) | 2,123 | (783) | (1,808) | (1,846) | (976) | 880 | 20 | 168 | (2,314) | 92 | (824) |
Net income | $ (1,444) | $ (428) | $ 5,169 | $ 4,730 | $ 351 | $ (215) | $ 435 | $ 3,123 | 8,027 | 3,694 | 7,978 |
As Previously Reported | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Revenue | 143,943 | ||||||||||
Operating income | 11,339 | ||||||||||
Other expense, net | (370) | ||||||||||
Income tax benefit (provision) | 295 | ||||||||||
Net income | 3,032 | ||||||||||
Total Adjustments | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Revenue | 861 | ||||||||||
Operating income | 861 | ||||||||||
Other expense, net | 4 | ||||||||||
Income tax benefit (provision) | (203) | ||||||||||
Net income | 662 | ||||||||||
Software and hardware | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Revenue | 88,374 | 72,928 | 60,069 | ||||||||
Software and hardware | As Previously Reported | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Revenue | 72,494 | ||||||||||
Software and hardware | Total Adjustments | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Revenue | 434 | ||||||||||
Services and other | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Revenue | $ 84,178 | 71,876 | $ 59,728 | ||||||||
Services and other | As Previously Reported | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Revenue | 71,449 | ||||||||||
Services and other | Total Adjustments | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Revenue | $ 427 |