Mitek Systems, Inc.

Good afternoon, ladies and gentlemen, and welcome to the MyTechReports Fiscal 2025 Fourth Quarter and Full-Year Financial Results. At this time, all lines are in lesson-only mode. Following the presentation, we will conduct a question-and-answer session. If at any time during this call you require immediate assistance, please press star zero for an operator. This call is being recorded on Thursday, December 11, 2025. And I would now like to turn the conference over to Ryan Flanagan with ICR. Thank you. Please go ahead.

Thank you, Operator. Good afternoon, and thank you for joining us today to discuss MITEC's fiscal fourth quarter and full year fiscal 2025 financial results. Joining me today are Chief Executive Officer Ed West and Chief Financial Officer Dave Lyle. Please note that today's call will include forward-looking statements, and because these statements are based on the company's current intent, expectations, and projections, They are not guarantees of future performance, and a variety of factors could cause actual results to differ materially. A description of these risks and uncertainties can be found in our 10-K filing dated December 11, 2025, and our other SEC filings. These forward-looking statements include, but are not limited to, our expectations around consumer demand for our products and services, expansion of our Check Fraud Defender, or CFD, data consortium, the ongoing stability of our check verification business, our growth and investment plans, expected improvements in gross profits and unit economics, improvement to operating leverage and scale, expected free cash flow conversion rate, and our FY26 financial outlook and guidance. Except as required by law, we do not undertake any obligation to update these forward-looking statements. This call will also include references to non-GAAP adjusted results. Please reference this afternoon's press release and our investor relations website for further information regarding forward-looking statements and reconciliation of GAAP and non-GAAP financial measures. With that, I'd like to turn the call over to Ed. Ed? Thank you, Ryan.

Good afternoon, everyone, and thank you for joining us today. For those less familiar with MyTech, we provide the identity verification, authentication, and fraud decisioning infrastructure that high assurance institutions rely on to onboard customers, authenticate users, and protect what's real across digital interactions. We closed fiscal 25 with a strong fourth quarter, coming in ahead of our expectations, driven by broad-based demand across our portfolio of business. As we reflect upon fiscal 25, one constant stands out. The fraud landscape is changing at an extraordinary pace as generative AI is accelerating both the volume and sophistication of fraud and identity-based attacks. AI is lowering the cost of creating deep fakes and synthetic identities for fraudsters. The Deloitte Center for Financial Services estimates that AI-enabled fraud in the United States could reach $40 billion by 2027, and recent industry research shows that a majority of financial institutions now view synthetic identity fraud as their most urgent emerging threat. In recent conversations with several of our largest banking partners, we have heard the same message. AI-enabled fraud attempts have risen sharply over the past year, and institutions are turning to MyTech with a clear mandate to help protect their customers and their business as these attacks scale. Before returning to key takeaways, I want to highlight a brief operational update. To deliver on our commitment to improve transparency and provide a simpler view for our investors, that matches how customers buy and how we are operating, we're updating our external reporting beginning this quarter. We're now disaggregating our revenues between fraud and identity and check verification. Customers are increasingly asking us to address fraud holistically, not as an isolated identity or payments problems. This has led to tighter integration across our identity, biometrics, authentication, and fraud capabilities. Those solutions are included in the fraud and identity portfolio. Check verification includes the heritage mobile deposit and check intelligence solutions. With synthetic fraud accelerating, financial institutions are clear about what they need, fewer point solutions, and a core partner who can help secure digital interactions across the entire customer journey. I would now like to discuss a few key takeaways for you as we exit fiscal 25. First, fraud and identity now accounts for over half of our total business. Growing more than 15% year over year, it is now firmly established as our growth engine for revenue and SaaS expansion. Second, SaaS revenue growth accelerated to 21% in fiscal 25, a meaningful acceleration from mid-single digits in fiscal 24, while the mix of SaaS increased to 43% of total revenue. These trends contribute to an improvement in the quality and predictability of our revenue. And third, we strengthened the company's foundation in fiscal 25, operationally, commercially, and technically, setting a stronger base for fiscal 26. Adjusted EBITDA margins were 30%, and we improved execution across go-to-market and customer delivery. We are now reinvesting in R&D, go-to-market expansion, and advanced decisioning to create a more unified and insight-rich customer journey. At the start of the year, we said fiscal 25 would focus on the fundamentals, fixing the foundation and restoring the operational discipline required for scalable, profitable growth. Our results this year show that we've done exactly that. We simplified how we run the company, consolidating go-to-market, and the product and R&D groups are now under unified leadership. As a result, non-GAAP operating expenses declined 2%, while revenue grew nearly 5%, driving improved efficiency and an 11% increase in revenue per employee. Our identity portfolio was, again, a major driver of performance. Over the past year, we consistently highlighted that increasing automation and cost efficiencies combined with continued revenue growth was a key factor to reaching the a profitability fulcrum point on a fully burdened basis. With automation now at approximately 90% and identity revenue at roughly 77 million, an increase of 12% year-over-year, that profitability fulcrum point has now been achieved. At the same time, we're seeing a clear shift towards higher assurance identity journeys that require more verification steps. And despite that added complexity, our high level of automation is enabling scale while continuing to expand margins. We see this playing out in both North America and EMEA. In North America, some of our largest financial institutions expanded with us across multiple business units and moved identity earlier in the onboarding flow, combining identity verification with fraud checks in a single stack. In EMEA, banks in the UK and Europe are adding new use cases and adopting authentication products such as MyPass, while digital ID initiatives in markets like Spain and Italy are beginning to drive higher verification and authentication volumes. SAS revenue makes rows of 43% of total revenues, keeping us firmly on track toward the goal we laid out for SAS to approach half of total revenue. We are also seeing strong leverage in our platform model, with gross profit per journey materially higher than that of a single signal workflow. Check Fraud Defender continues to gain traction. ACV grew 50% year-over-year, while data sets configured in the consortium expanded to over a quarter of all U.S. checking accounts, and that figure is approaching 50% when including FIs in pilot phase. We believe the expansion and data set coverage of checking accounts in the U.S. is quite unique and is a leading indicator of the value for consortium members because accuracy and value scale with consortium breadth. Check fraud defender ACV for the year came in below our initial goal, primarily due to the timing of large enterprise deployments. Several large FIs moved through multi-stage validation and procurement cycles more slowly than anticipated. shifting its decisions into fiscal 26, but not changing the underlying demand. Our expanding footprint is already driving tangible customer outcomes. At our October sales kickoff, multiple large FIs shared that my tech is preventing millions of dollars of fraud. This feedback underscores the differentiated value of our consortium and the strength of the model as we scale into full production. All of these efforts made fiscal 25 translated into higher margins and stronger free cash flow, which Dave will cover in more detail. With a more unified foundation in place, we are entering fiscal 26 from a position of strength and with a clear mandate from our customers. They want us to unify even more of what we do and help them grow safely. While fiscal 25 was about strengthening the foundation, fiscal 26 is about moving into our next phase, Unify and grow. Unifying our identity, authentication, and fraud capabilities into a cohesive, insights-driven platform and scaling it across our customer base. When we help institutions open more accounts digitally, move more transactions through safer channels, and keep bad actors out, we then deepen our role in their core customer journeys and grow our SaaS revenue. To guide this next phase, we have organized fiscal 26 around four key pillars that we want to share with you. Our first pillar is to fortify our check verification franchise, the durable platform including mobile deposit and check intelligence that established our longstanding relationship with many of North America's largest financial institutions and has earned us a reputation as a market leader through scale and accuracy. This franchise remains one of the strongest assets in our business, providing the reliability and trust that our customers expect. Despite periodic fluctuations from license renewal timing, check verification has remained remarkably stable over the last several years. That stability reflects the scale and mission critical nature of a portfolio that supports approximately 1.2 billion mobile check deposit transactions every year. with high margins and high levels of reliability. Our second pillar is to unify our fraud and identity capabilities and expand that portfolio. Fiscal 26 is about showing up as one MyTech across that full journey, increasing our fraud and identity SaaS footprint by enabling customers to grow digital adoption and transaction volume without corresponding increases in fraud losses or manual costs. Fraud and identity now represents just over half of our business and remains our fastest-growing portfolio. The continued shift towards SaaS, high automation, and multi-signal journeys is improving margins across the broader portfolio. In fiscal 26, we plan to grow the fraud and identity portfolio through deeper, signal-rich identity journeys, broaden engagement with customers across additional lines of business and geographies, expand the Czech Fraud Defender Consortium, and continue to drive commercial expansion across our customer and geographic base and growing network of channel partners. Customers are increasingly deploying multi-signal workflows that combine documents, biometrics, liveness, behavioral analytics, and third-party data, which materially improves their economics by reducing fraud losses, lowering manual review, and improving conversion. At the same time, as more institutions contribute data to the CFD consortium, detection accuracy improves and loss rates decline, strengthening the value of the network for every participant, including MyTech. Our third pillar for Fiscal 26 is to invest in the areas that we believe we have a clear advantage in where we can lead. As I mentioned earlier, our customers do not just want us. to deliver signals, they want a partner who can lead them through the shift by returning data-driven insights or a simple risk-adjusted decision they can act on in real time. This is why our fiscal 26 investments are focused on AI-supported insights and decisioning, biometrics, data and intelligence, and targeted go-to-market and delivery capacity. Given our history and expertise, we have a strong basis of differentiation with financial institutions and high assurance use cases. This is where incremental investment dollars will have the greatest impact. You'll see this focus reflected in our financials. We expanded adjusted EBITDA margin to 30% in fiscal 25, and we are deliberately reinvesting to fund these initiatives in fiscal 26, while still delivering attractive margins. We expect improvements in gross profit dollars and unit economics as richer decisioning increases value per workflow. You will see more of our OpEx shift towards R&D and go to market as we fund these higher ROI initiatives. Disco 25 proved we can grow margin through operating leverage and scale. Disco 26 is about investing behind the capabilities where we can lead and evolving our solution set, all with the goal to accelerate growth. Our fourth pillar is maximizing value through disciplined capital allocation. To lead in the areas where we hold an advantage, every dollar of capital must be deployed deliberately to earn a high return, either reinvested into the capabilities that strengthen our long-term leadership and growth, or return to shareholders. We will measure our impact via improving revenue quality and growth. margin durability, and strength in free cash flow conversion, all with a clear capital allocation framework to ensure that we maintain a strong balance sheet while balancing investments with returning capital to shareholders. Our Unify and Grow framework reflects where the market is moving and how our customers are asking us to partner with them. By unifying our capabilities and reinvesting in the technology, data, and decision layers where we have a structural advantage, We are positioning MyTech for durable, recurring, high-quality, organic growth. We expect to expand our SaaS space, increase fraud and identity revenue, and extend the reach and value of our consortium. Now, before I turn it over to Dave, I also want to recognize our nearly 600 teammates around the world and our trusted partners. FISFA 25 was a year of meaningful change across the entire company. operationally, commercially, and technically. And the team delivered with focus, discipline, and a deep commitment to our strong, purpose-driven mission of protecting our customers and their users. The progress we made this year, including simplifying how we operate, elevating customer support, strengthening the core technology behind our platform, and returning to growth reflects the commitment and execution of our people. Their work is the foundation for the results you're hearing today and gives us confidence as we enter fiscal 26. With that, I'll try and hand it over to Dave.