Mitek Systems Management Discusses Q3 2012 Results - Earnings Call Transcript

Mitek Systems (MITK)

Q3 2012 Earnings Call

July 24, 2012 5:00 pm ET


Julie C. Cunningham - Vice President of Investor Relations and Corporate Communications

James B. Debello - Chief Executive Officer, President, Secretary and Director

Russell C. Clark - Chief Financial Officer and Principal Accounting Officer


Bhavan Suri - William Blair & Company L.L.C., Research Division

Thomas C. McCrohan - Janney Montgomery Scott LLC, Research Division

Michael J. Grondahl - Piper Jaffray Companies, Research Division

Mayank Tandon - Needham & Company, LLC, Research Division

Joel W. Achramowicz - Merriman Capital, Inc., Research Division



Good day, ladies and gentlemen, and welcome to the Third Quarter 2012 Mitek Systems Earnings Conference Call. My name is Deanna, and I'll be the operator for today. [Operator Instructions] As a reminder, today's conference is being recorded for replay purposes. I would now like to turn the conference over to your host, Ms. Julie Cunningham, Vice President, Investor Relations. Please go ahead.

Julie C. Cunningham

Thanks, Deanna. Good afternoon, and thank you for joining us for the Mitek Systems third quarter fiscal 2012 conference call. Joining me on the call today is James DeBello, President and CEO; and Russ Clark, Chief Financial Officer.

The agenda for today's call includes commentary from Jim, followed by a discussion of the financial results from Russ.

This afternoon, Mitek issued a news release announcing its third quarter fiscal 2012 financial results, and that's available on our website at

This call is being broadcast live over the Internet to all interested parties, and the audio of this call will be available on the Investor Relations page of our website and archived there for 30 days.

As a reminder, this conference call may contain forward-looking statements that are not historical facts, but rather are based on the company's current expectations and beliefs. Mitek's results may differ materially. Please refer to Mitek's SEC filings for detailed information.

In addition, we'll be using non-GAAP financial measures. Reconciliations to the most directly comparable GAAP financial measures are included in the earnings release on our website. And now I'd like to turn the call over to Jim Debello.

James B. Debello

Thanks, Julie, and good afternoon, everyone. I'll begin by reviewing our third quarter results and provide some commentary on Mitek's progress. Then Russ will go over the Q3 financials, and we'll open the call for your questions.

For the third quarter of fiscal 2012, we posted revenues of $3.2 million and a non-GAAP net loss of $1.2 million. The return to revenue growth was obviously a key focus for us. But also we continued laying the foundation for future growth by investing in new product development and building the management team appropriately as we scale our business.

Toward that end, we made 2 recent strategic hires, both of whom are industry veterans to add further bench strength to our management team.

Mike Strange joins us from Green Dot where he was CTO, and he brings 20 years of experience in payments, prepaid and hosted services to Mitek. As Mitek's Chief Technology Officer, Mike's proven track record in engineering management and product development will be invaluable as we grow and diversify our product offerings.

Mike Diamond also joined us as Senior Vice President of Sales and New Business Development. He brings a wealth of payments industry knowledge to Mitek. And previously Mike held senior level business development roles at IBM and S1 Corporation. I view Mike's role as pivotal as we extend our partner and customer relationships to insurance and other vertical markets.

Mitek has developed and patented mobile capture and data extraction software solutions and continues to lead the industry with innovations. We are investing heavily in R&D to build out our existing product roadmap, as well as bring new products to market. We are on track with the latest release of our mobile photo bill pay product to our pilot banks and remain confident that this product is our second killer app.

As a leader in mobile imaging, we've helped hundreds of corporations like Chase and Progressive engage in a new and powerfully unique way with their consumers. This is a phenomenon driven by the extraordinary consumer experience that Mitek enables. The delight to consumers is almost magical, as depicted in the latest national TV advertisement from Chase, at which the mother and daughter captured a lion with a snap of a smartphone camera and sent it to the bank instead of the check. This kind of whimsical marketing has put fun back in banking and the demand for it is growing. Research firm, Forrester, calls mobile check deposit table stakes.

Brian Moynihan, the CEO of Bank of America, was recently quoted accounting mobile banking saying, "It's just a much more efficient and, frankly, stronger service model." This is the promise of our suite of mobile imaging applications that let consumers enroll in new services, fund their prepaid card and bank accounts, shop for new credit cards and auto insurance and pay their bills. All with a simple snap of a camera on their smart phone or tablet. And we're just scratching the surface to use our technology in ways that the consumer never realized possible.

A recent survey from Gartner says that only 29% of consumers are aware of mobile check deposit. As a result, we believe that the opportunity for growth for mobile deposit and our future mobile imaging solutions is very large.

Last May, we participated in the Mobile Banking Summit in San Francisco, and it was gratifying to see scores of banks and other financial institutions actively pursuing new ways to enhance their mobile strategy. In fact, multiple companies mentioned Mitek by name during their presentations as a valued technology partner. Clearly, mobile imaging is enabling the strategic layer of mobile banking applications for document processing and identity verification.

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