Mitek Systems, Inc.

Good afternoon and welcome to the MITEC Systems Fiscal 2022 Fourth Quarter and Full Year Earnings Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star, then two. Please note, this event is being recorded. I would now like to turn the conference over to Todd Curley of MKR Investor Relations. Please go ahead.

Thank you, Operator. Good afternoon, and welcome to MITEC's fourth quarter and full year Fiscal 2022 Earnings Conference Call. With me on today's call are MITEC's CEO, Max Koneckia, and Interim CFO, Fuad Ahmad. Before I turn the call over to Max and Flood, I'd like to cover a few quick items. This afternoon, MyTech issued a press release announcing its fourth quarter and full year fiscal 2022 financial results. That release is available on the company's website at mytechsystems.com. This call is being broadcast live over the internet for all interested parties, and the webcast will be archived on the investor relations page of the company's website. I want to remind everyone that on today's call, management will discuss certain factors that are likely to influence the business going forward. Any factors discussed today that are not historical facts, particularly comments regarding our long-term prospects and market opportunities, should be considered quarterly statements. These quarterly statements may include comments about the company's plans and expectations of future performance. Forward-looking statements are subject to a number of risks and uncertainties which cause actual results in different materially. We encourage all of our listeners to review our SEC filings, including our most recent 10-K and 10-Q for complete description of these risks. Our statements on this call are made as of today, June 29, 2023, and the company undertakes the obligation to update or revise publicly any of the forward-looking statements contained herein, whether as a result of new information, future events, changes in expectations, or otherwise. Additionally, throughout this call, we'll be discussing certain non-GAAP financial measures. Today's earnings release and the related current report on Form 8K describe the differences between our non-GAAP and GAAP reporting and present the reconciliation between the two through the periods reported in the release. With that said, I'll turn the call over to MITAC's CEO, Max.

Thanks, Todd. Good afternoon, everyone. Thank you for joining us today. I'm very excited to finally report our full year fiscal 2022 results. 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. Fiscal 2022 was another record year for MyTech. Record revenue, record earnings, and strong cash flow from operations. Product innovation also continued during that time. We launched MyTech's integrated identity platform, MyVIP, ID Live Face Plus, and enhanced check intelligence within the check product defender offering. We were also awarded patents recognizing our commitment to biometric excellence. This ongoing momentum reinforces our optimism about our long-term prospects and our ability to further penetrate our large target addressable markets. Quickly looking at the numbers for fiscal 2022, we recorded record revenue of $143.9 million, representing growth of 20% year-over-year. We also generated record non-GAAP net income of $40 million, or 87 cents per diluted share, up 17% year-over-year, as well as strong cash flow from operations of $26 million. We accomplished a lot in fiscal 2022 beyond just our record revenue and earnings performance. We provided exceptional customer value to our world's leading banks, fintechs, and marketplaces as they must move more of their businesses online in a secure and trusted way. MyTech continues to distinguish itself as a critical component in the fight against fraud, and during the year, we expanded the breadth of our product offerings and the markets we serve. With that now, let me touch on our two lines of business and their performance during the fiscal year. Our deposits line of business continues to grow in fiscal 2022, with revenue growth of 14% year over year. Mobile check deposit is used by over 7,500 financial institutions and continues to gain traction with consumers due to its convenience and ease of use. Adoption of our check for our defender product also increased, as losses associated with check fraud started to skyrocket. Check Fraud Defender helps banks identify and defend against these fraudulent activities, significantly reducing fraud losses, and our most recent innovation, CheckLivest, enhances the detection of forgeries and synthetic checks. We added several new Check Fraud Defender customers during fiscal 2022, and we believe it will be a growth driver for our deposits business for years to come. Before we move on to our identity business, I'd like to provide a quick update on the USAA litigation situation. While MyTech is not a party to any of the USAA lawsuits, we continue to pursue our declaratory judgment action against USAA to prove that our products do not infringe the four auto-capture patents at issue in the USAA lawsuits as we look to provide support to our banking clients. Along with our efforts There have been some positive developments in the matters related to USAA as the U.S. Patent Trial and Appeal Board, the PTAB, has in the last six months invalidated five of the USAA patents that they have been relying on to sue various financial institutions, two of which are related to auto-capture. We expect the PTAB to invalidate more USAA patents in the coming months as they continue their review of additional USAA patents, including one additional USAA patent related to auto capture. We also intend to continue to vigorously prosecute our case, as Mypex invented all of its core technology, and we believe our products do not infringe on any USAA patents. Switching to identities. I'd like to take this opportunity to highlight the tremendous market opportunity that lies within this sector. As the world becomes increasingly interconnected and digital, the need for robust identity verification solutions has never been more crucial. Financial crimes are becoming more sophisticated, posing significant risks to individuals and organizations alike. The rapid rise of digital transformation has created a demand for seamless and secure online experiences. MyTech is at the forefront of addressing these challenges by providing AI and biometric identity verification solutions that not only mitigate risks, but also enable smooth and trustworthy interactions throughout the customer lifecycle. With the acquisition of WhoYou in 2022 and the subsequent full integration of those platform technologies with our leading biometrics and existing computer vision solutions, We are strategically positioned to capture a substantial share of this expanding market and create significant value for our shareholders. In 2022, we launched MyTech's verified identity platform, MyVIP. Positioned as our leading growth product, this fully integrated identity platform leverages our IP in biometrics, capture, computer vision, and data intelligence and presents it to the customer in a low-code implementation model. Already adopted by leading banks, MyVIP has expanded our addressable market and delivered improved unit economics. Shortly following the close of fiscal 2022, we launched MyPass, the industry's first multimodal biometric solution for continuous identity authentication. With the onslaught of machine-driven attacks, voice and face biometrics used together with built-in liveness checks becomes the strongest and most effortless means to authenticate somebody's identity online. I couldn't be prouder of the team's vigilance in getting this product to market, and I'm eager to see it implemented as quickly as possible from those who have already purchased it. MyPath further expands MyTech's footprint in this category, as well as our overall addressable market. During the past quarter, I had the privilege of attending our annual European Customer Summit, where I had the opportunity to engage directly with our valued customers. It was an incredibly insightful experience, as I heard firsthand about the value of our company's creating and the ongoing battle against digital identity fraud. From large multinational banks to government-associated screening agencies, our customers use our identity verification solution to enable effortless and safe experiences for their for their new and returning customers. Their testimonials serve as evidence of our commitment to combating fraudulent activities and providing innovative solutions that address the evolving needs of the market. We are proud of the positive impact we are making, and we remain dedicated to advancing our technologies and delivering even greater value to our customers in the fight against digital identity fraud. In fiscal 2022, our identity business grew 31% year over year. Our product achievements and customer wins in fiscal 2022 reaffirm our leadership position, and I would like to thank every MyTechian worldwide for their unique contributions to our success. Together, we will continue delivering significant value to our customers. Before closing, please note that we are planning an Investor Day event for later in the calendar year. This will be an opportunity for interested parties to attend a dedicated event to learn of our long-term strategy with specific detail on the next chapter of the deposits business and the significant growth opportunity for our identity products. Now, I'll turn the call over to Fuad to discuss the financial results in more detail. Following Fuad's remarks, we will open the call to questions. Fuad, please go ahead.