Mitek Turns to Fraud Control As Remote Deposit Capture Matures

Mitek Systems Inc., provider of remote deposit capture and fraud-prevention technology, says revenue for fiscal 2022 grew 20% to $143.9 million from fiscal 2021’s $119.8 million. Much of the growth came from more demand for the company’s fraud-control offerings.

San Diego-based Mitek is a leading vendor of remote deposit technology. On a conference call with analysts Thursday afternoon, chief executive Scipio “Max” Carnecchia said deposit revenue grew 14% year over year, and some 7,500 financial institutions now use Mitek’s mobile check-deposit service, according to a call transcript from Reuters.

But with mobile deposit capabilities now widespread among financial institutions, the company has been turning toward fraud prevention and control for continued growth. Mitek said in its earnings report that its Check Fraud Defender product is getting “strong adoption” from several leading financial institutions.

The company launched its Verified Identity Platform last year and also introduced MiPass, which it calls “the industry’s first multi-model biometric solution for continuous identity authentication,” which further expanded Mitek’s total addressable market. Meanwhile, Mitek is integrating the capabilities of HooYu Ltd., a British provider of know-your-customer technology that Mitek bought in March 2022 for $129 million, into its services.

Despite the revenue increase, Mitek’s net income fell to $3.03 million from $7.98 million in fiscal 2021. But with acquisition costs and some other items factored out, adjusted net income rose to $39.6 million from 2021’s $34.2 million, according to the earnings report.

The report for fiscal 2022, which ended Sept. 30, is coming out only now as Mitek worked to resolve internal financial-control issues. Publicly traded Mitek last July appointed BDO USA as its independent registered public accounting firm following the resignation of its previous accountant two months earlier, resulting in delays in filing required financial reports to the Securities and Exchange Commission. Those delays, which the company said earlier this month were not the result of misconduct, prompted the Nasdaq exchange to threaten to delist Mitek’s stock for failure to file timely reports.

Now Mitek says it is catching up. “The enlisting of BDO has enhanced our financial controls and governance, and while it temporarily impacted the filing of periodic fiscal reports, we are now a stronger business,” Carnecchia said on the call, according to the transcript.