Why Mitek Systems Shares Are Surging Today?

Mitek Systems Inc MITK shares are trading higher by over 15% after it reported Q1 FY23 results.

Total revenue rose 41% Y/Y to $45.7 million, partly led by a large, multi-year mobile deposit contract signed and partially recognized in the quarter.

Adjusted EPS of $0.31 surpassed the consensus of $0.20. 

Operating cash flow stood at $5.3 million, and cash and investments came in at $107.6 million as of December 31, 2022.

"Our Identity revenue was up 15% year over year in the first quarter despite the difficult macro environment, reinforcing our solid position as a leader in the ever-changing identity and fraud landscape. Further bolstering our financial performance, our Deposits business delivered a particularly strong quarter, up 59% year over year, largely due to the signing of a large multi-year contract that locked in favorable pricing for Mitek over four years. Due to the unique terms of this one contract, we recognized additional license revenue relating to future periods of approximately $7.0 million in the first quarter," said CEO Max Carnecchia.

Outlook: MITK raised its FY23 revenue outlook to $169.0 million- $171.0 million (+18% Y/Y from the mid-point of the guidance range) vs. consensus of $163.61 million from $162.0 million-$165.0 million earlier. 

Also, the company increased its adjusted operating margin guidance to 30.0%-31.0% from 29.5%-30.5% earlier. 

The company expects to release Q2 FY23 results on September 14, 2023.

Recently, the Nasdaq hearings panel has granted its request for continued listing pending its return to compliance with the filing requirement.

Price Action: MITK shares are trading up 13.01% at $12.77 premarket on the last check Wednesday.