Is Positive Pay Plus attached to Check Fraud Defender deals, what is the sales effort like, and what is the potential market opportunity and pricing model?

Positive Pay Plus leverages the CFD network to address check fraud at the point of presentment, primarily for commercial accounts. It's an early-stage product, but they've already secured their first non-bank design partner in the B2B payments/accounts payable market, indicating broader applications in overall payments fraud. “What we designed it for is to try to stop fraud at the point of presentment and before a bad payment or fraudulent payment item even comes into the banking system and putting that to the front end and working with our core customers to do that. It's early on.”

Could you elaborate on the expanded partner and reseller channel and what is driving its growth?

The channel partner network, particularly for Check Fraud Defender, has been accelerating over recent quarters. Fiserv becoming a reseller is significant, extending availability to thousands of financial institutions. The clear value proposition of fighting fraud and ease of integration for partners are key drivers, contributing to the 73% YoY growth in CFD ACV. “And most recently, this quarter, we're really honored to announce that Fiserv, who is one of the largest core platforms and the financial services. And so now it extends the availability to their network of thousands of financial institutions to join in and join our platform and consortium to stop check fraud.”

How much growth is expected to be driven through reseller and channel partnerships versus the internal sales team?

Channel partner growth is expected to continue accelerating as it's a newer initiative. The direct sales team focuses on the top 100 financial institutions, while partners provide access to thousands of FIs. The integrated nature of partner solutions makes it easy for their customers to adopt, suggesting channels will be an increasingly significant part of growth. “So what we would expect is going forward that, that continue to be an accelerating part of the growth. Separately, as I mentioned, we closed this past quarter on a top 5, one of the largest financial institutions in the United States.”

MITK

Mitek Systems (MITK) Q3 FY26 earnings call: guidance and Q&A

Earnings call· Jun 2026 (Q3 FY26)· Information Technology· Aug 6, 2026

Source: earnings call transcript

Executive summary

Mitek Systems Q3 FY26 — Strong Growth in Fraud & Identity and SaaS, Expanding Margins

Mitek Systems delivered a robust third quarter, driven by record fraud and identity revenue and significant SaaS growth, which now approaches half of total revenue. The company demonstrated strong operating leverage and margin expansion, underpinned by the scaling of its Check Fraud Defender consortium and deepening identity platform engagements. While free cash flow conversion saw a year-over-year decline due to specific drivers, the company maintains a strong net cash position, enabling continued investment in AI-based solutions and disciplined capital returns.

Highlights

Total revenue grew 18% year-over-year to $54 million, exceeding previous expectations.
Fraud and identity revenue reached a record $29 million, and total SaaS revenue hit a record, up 36% year-over-year.
Adjusted EBITDA margin was approximately 38%, reflecting strong profitability and 950 basis points of operating leverage.
Check Fraud Defender (CFD) ACV grew 73% year-over-year, now exceeding $22 million, with a top 5 U.S. bank joining the network.
Net cash position increased to $46 million, up from $23 million a year ago, providing flexibility for investments and buybacks.

Concerns

Free cash flow conversion on a trailing 12-month basis declined to 70% from 99% a year ago, primarily due to working capital timing, higher cash taxes, lower net interest income, and increased capitalized development costs.
Check verification revenue is expected to soften gradually over time due to the long-term decline in paper check usage, with 9.2 billion checks written in the U.S. in 2024.
Fraud and identity SaaS revenue is expected to ease modestly sequentially from Q3 to Q4 due to an unexpected, one-time surge in age verification demand in the third quarter.

Guidance & targets

Category	Target	Timeline	Confidence
Full year FY26 revenue	$195 million to $200 million high materiality	FY26	High
Full year FY26 fraud and identity revenue	$105 million to $109 million medium materiality	FY26	High
Full year FY26 adjusted EBITDA margin	32% to 34% high materiality	FY26	High
Q4 FY26 revenue	$42 million to $47 million medium materiality	Q4 · FY26	High
Q4 FY26 fraud and identity SaaS	ease modestly sequentially from Q3 to Q4 low materiality	Q4 · FY26	Medium
Q4 FY26 non-GAAP operating expense	$26 million to $27 million medium materiality	Q4 · FY26	High
FY26 full year gross margin	low 80s medium materiality	FY26	High
FY26 CapEx	approximately 3.5% of revenue low materiality	FY26	High
FY26 Depreciation and Amortization	approximately 1% of revenue low materiality	FY26	High
Long-term free cash flow conversion	70% to 80% medium materiality	Long-term	High
Full year FY26 check verification revenue	approximately $90 million medium materiality	FY26	High
FY27 fraud and identity SaaS growth rate	high teens to low 20s growth high materiality	FY27	Medium
FY27 check verification revenue	holding in the $90 million range medium materiality	FY27	Medium

Segment performance

Segment	Revenue	YoY	QoQ	Margin
Fraud and Identity Growth gains were somewhat offset by the conversion of a large on-premise software license customer to a Check Fraud Defender SaaS agreement, a one-quarter impact. SaaS growth was driven by underlying identity transaction volumes, new Check Fraud Defender customers, and an unexpected surge in age verification demand in EMEA. SaaS growth: 37% YoYNormalized SaaS growth: high teens to low 20s	$29 million	14%	—	—
Check Verification Revenue growth was driven by two large renewals that did not fall in the same quarter last year, reflecting renewal timing rather than underlying growth. The business remains confident in the ~$90 million TTM revenue level for the full year. Trailing 12-month revenue: ~$90 million	$25 million	24%	—	—

Orderbook & backlog

Check Fraud Defender ACV $22 million+ Q3 FY26

up 73% YoY

Annual Contract Value (ACV) for Check Fraud Defender.

Product announcements

Product	Type	Timeline	Details
Positive Pay Plus	update	launched last quarter

Deals & partnerships

Fiserv Reseller agreement for Check Fraud Defender

Fiserv is now live as a reseller of Check Fraud Defender, leveraging their existing relationship as a check verification partner.

Abrigo, CSI, DataVisor Partner channel for Check Fraud Defender

Partnerships accelerating tangible recurring contribution to the Check Fraud Defender network.

Top 5 U.S. bank Adoption of Check Fraud Defender network

Successfully completed pilot and is now moving into the Check Fraud Defender Consortium network, demonstrating superior results to their existing solution.

Leading business payments company First non-bank design partner for Positive Pay Plus

Partnering to expand Positive Pay Plus beyond traditional banking into enterprise B2B payments.

Large enterprise software company Using verification for employee screening

Utilizing Mitek's verification services for employee screening, demonstrating demand for high assurance solutions outside of financial services.

One of the largest football clubs in the United Kingdom Verifying and authenticating season ticket holders

Using Mitek's solutions for verifying and authenticating season ticket holders, highlighting demand for reliable infrastructure in new areas.

Risks & headwinds

Secular decline in paper check usage long-term

9.2 billion checks written in the United States in 2024

Mitigation:Mobile deposit penetration and disciplined pricing have offset volume declines, keeping check verification revenue range-bound. Strategic value through embedded infrastructure and relationships opens doors to broader fraud and identity portfolio.

One-time surge in age verification demand Q3 FY26

many millions of transactions beyond expectations

Mitigation:Mitek's expertise, reliability, and ability to scale served the situation well. Fraud and identity SaaS is expected to ease modestly sequentially from Q3 to Q4 as this one-time impact normalizes.

Free cash flow conversion decline Q3 FY26

70% TTM conversion vs 99% a year ago

Mitigation:Primarily driven by working capital timing (not underlying change in billing/collections), higher cash taxes, lower net interest income, and planned step-up in capitalized development costs. Management expects FCF conversion to land within the 70%-80% long-term range.

What to watch in Q4 FY26

Fraud and Identity SaaS growth rate

Q4 FY26 and FY27

Current 37% YoY (Q3 FY26)

Target High teens to low 20s growth

Why it matters

To confirm the normalization of growth after the one-time age verification surge and assess the underlying durability of the core growth engine.

We expect fraud and identity SaaS to ease modestly sequentially from Q3 to Q4 off of the unexpected age verification surge in the third quarter. ... The SaaS line within fraud and identity, where a lot of investment is going, has been growing in the high teens to low 20s growth over the past several quarters. So that's a good starting point, I think, when you're looking out into 2027.

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Q&A highlights

What is the general adoption level of MiVIP solutions like biometrics and document verification in the industry, and how much of new business is displacement versus first-time adoption?

Management believes the industry is in the early stages of broad adoption for identity verification and authentication, driven by increasing digital and AI-assisted fraud. They emphasize their platform approach and data network. New business comes from both new logos (especially for Check Fraud Defender) and expansion opportunities, often starting small and expanding within financial institutions, sometimes displacing competitors.

“based on what's happening in the marketplace, and as I outlined on my call, we believe we're in the early stages of continuing adoption of the breadth, need and use of identity with verification, authentication and overall interaction, and it's about trusting the digital interactions.”

asked by George Sutton · answered by Edward West

2 min read 5 chapters

Detailed narrative

Consortium Network Scaling and Partner Acceleration

Mitek's Check Fraud Defender (CFD) consortium network achieved a significant milestone with a top 5 U.S. bank successfully completing its pilot and moving into the network. This was driven by CFD's superior results compared to the bank's existing solution. The partner channel is also accelerating, with Fiserv now live as a reseller, extending CFD's reach to thousands of financial institutions.

New logos were added through partners like Abrigo, CSI, and DataVisor, bringing regional banks into the shared intelligence community. The network now covers approximately 70% of U.S. checking accounts, with annualized volumes in the billions, and CFD ACV grew 73% year-over-year.

Deepening Fraud and Identity Portfolio

The company's fraud and identity portfolio, comprising the CFD data network and the core identity platform (Mobile Verify, MiVIP, biometrics), is deepening across the customer lifecycle. An unexpected surge in age verification demand, driven by a specific regulatory requirement, led to millions of transactions beyond expectations and record identity transaction volumes.

Mitek is increasingly securing multiyear committed contracts and expanding beyond traditional financial institutions, with recent wins including an enterprise software company for employee screening and a major UK football club for season ticket holder verification.

Durable Check Verification Business

Check verification continues to provide industry-leading convenience and significant cash flow, serving as the core software for the Check Fraud Defender network. Despite the Federal Reserve's report of a gradual long-term decline in paper check usage (9.2 billion checks in 2024), check verification revenue has remained range-bound on a trailing 12-month basis.

This stability is attributed to mobile deposit penetration and disciplined pricing, maintaining its strategic value through embedded infrastructure and channel partner relationships, which also open doors for the broader fraud and identity portfolio.

Strong Execution and Financial Performance

Mitek demonstrated strong execution, pairing 18% year-over-year revenue growth with expanding margins and significant operating leverage. Non-GAAP gross margin improved to 85.5%, and adjusted EBITDA margin reached approximately 38%. The revenue base is becoming more durable, with SaaS now representing about 46% of trailing 12-month revenue, up from 41% a year ago.

The company's strong net cash position of $46 million, up from $23 million, provides ample flexibility for continued platform investments and share repurchases, with $48 million remaining under the current authorization.

Go-to-Market Unification and Leadership Appointment

To support its scaling, Mitek is unifying its go-to-market functions, including direct and channel partner sales, customer success, sales engineering, and professional services teams, under a single Chief Revenue Officer (CRO) organization. Aaron Seyler has been appointed as the new CRO, effective August 17, bringing a strong track record in revenue growth within the sector.

This strategic move aims to enhance market penetration and capitalize on the growth drivers from both the consortium data network and the identity platform.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.