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    MITK
    Earnings call· Jun 2026(Q3 FY26)

    MITEK SYSTEMS Q3 FY26 earnings call MITK

    Aug 6, 2026 Source

    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

    5

    • 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

    3

    • 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

    13
    CategoryTargetConfidence
    Full year FY26 revenue
    $195 million to $200 million
    high materiality
    High
    Full year FY26 fraud and identity revenue
    $105 million to $109 million
    medium materiality
    High
    Full year FY26 adjusted EBITDA margin
    32% to 34%
    high materiality
    High
    Q4 FY26 revenue
    $42 million to $47 million
    medium materiality
    High
    Q4 FY26 fraud and identity SaaS
    ease modestly sequentially from Q3 to Q4
    low materiality
    Medium
    Q4 FY26 non-GAAP operating expense
    $26 million to $27 million
    medium materiality
    High
    FY26 full year gross margin
    low 80s
    medium materiality
    High
    FY26 CapEx
    approximately 3.5% of revenue
    low materiality
    High
    FY26 Depreciation and Amortization
    approximately 1% of revenue
    low materiality
    High
    Long-term free cash flow conversion
    70% to 80%
    medium materiality
    High
    Full year FY26 check verification revenue
    approximately $90 million
    medium materiality
    High
    FY27 fraud and identity SaaS growth rate
    high teens to low 20s growth
    high materiality
    Medium
    FY27 check verification revenue
    holding in the $90 million range
    medium materiality
    Medium

    Segment performance

    2
    SegmentRevenueYoYQoQMargin
    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 million14%——
    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 million24%——

    Operational metrics

    19
    Non-GAAP gross margin
    85.5%up 40 bps YoY
    Q3 FY26

    Driven by SaaS maintenance and other gross margin improvement and a heavier license revenue mix.

    SaaS maintenance and other gross margin
    77%up 250 bps YoY
    Q3 FY26

    Improvement as consortium pilots completed and moved into the network.

    Non-GAAP operating expense
    $25.9 milliondown ~1% YoY
    Q3 FY26

    While revenue grew 18%, generating operating leverage.

    Operating leverage
    950 bps
    Q3 FY26

    Generated as revenue grew 18% while operating expense declined.

    R&D expense (cash basis)
    up ~17%YoY
    Q3 FY26

    Underlying investment in AI-based decisioning, fraud intelligence, and biometrics continues to increase, despite reported 3% decline in R&D expense due to software capitalization effect.

    R&D expense (cash basis)
    up 11%YTD
    YTD FY26

    Underlying investment in AI-based decisioning, fraud intelligence, and biometrics continues to increase.

    Net interest income and other income
    $700,000vs $2.4 million a year ago
    Q3 FY26

    Reflecting a cleaner balance sheet after retiring convertible notes and a thinner yield spread.

    Non-GAAP tax expense
    14%
    Q3 FY26

    As a percentage of pretax income.

    Non-GAAP net income
    $16.8 million
    Q3 FY26

    Resulting in adjusted diluted EPS of $0.34.

    Cash and investments balance
    $100 million
    Q3 FY26

    As of quarter end.

    Total debt
    $54 million
    Q3 FY26

    As of quarter end.

    Net cash position
    $46 millionup from $23 million a year ago
    Q3 FY26

    Calculated as cash and investments minus total debt.

    Share repurchases
    $2 million
    Q3 FY26

    Executed in the quarter.

    Share repurchases (TTM)
    $21 million
    TTM Q3 FY26

    On a trailing 12-month basis.

    Remaining share repurchase authorization
    $48 million
    Q3 FY26

    Remaining under current authorization.

    Paper check usage (US)
    9.2 billion
    CY24

    Reflects gradual long-term decline, confirmed by Federal Reserve's latest payment study.

    Total SaaS revenue
    46%up from 41% a year ago
    LTM Q3 FY26

    Reflects improving revenue mix towards more predictable and durable SaaS.

    US checking accounts covered by CFD
    70%
    Q3 FY26

    Estimated coverage by the Check Fraud Defender consortium data sets.

    CFD annualized volumes
    measured in the billions
    Q3 FY26

    Annualized volumes for the Check Fraud Defender network.

    Industry KPIs

    9
    MetricValueDetails
    Capacity CAPEX3.5%% of revenue
    Revenue growth$54 millionUSD
    Arr net new arr$22 million+USD
    Bookings billings$22 million+USD
    Customer account countDozenslogos
    Large deal new logo metricsDozenslogos
    Multi product platform attach—
    Operating FCF margin rule of 4085.5%%
    Ai product adoption monetizationmany millionstransactions

    Orderbook & backlog

    1
    Check Fraud Defender ACV$22 million+Q3 FY26

    up 73% YoY

    Annual Contract Value (ACV) for Check Fraud Defender.

    Product announcements

    1
    ProductTypeDetails
    Positive Pay Plusupdate

    Deals & partnerships

    6
    FiservReseller 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, DataVisorPartner channel for Check Fraud Defender

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

    Top 5 U.S. bankAdoption 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 companyFirst non-bank design partner for Positive Pay Plus

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

    Large enterprise software companyUsing 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 KingdomVerifying 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

    3
    Secular decline in paper check usagelong-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 demandQ3 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 declineQ3 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

    5

    Fraud and Identity SaaS growth rate

    Q4 FY26 and FY27
    Current37% YoY (Q3 FY26)
    TargetHigh 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.

    Q&A highlights

    5

    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 read5 chapters

    Detailed Narrative

    01

    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.

    02

    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.

    03

    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.

    04

    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.

    05

    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.

    AI-generated summary of the company’s earnings call. Not investment advice.