Mitek Systems
Mitek makes the software inside bank apps that reads a photographed cheque and checks that a face or an ID is real.
The scores
Growth3/4 ↑
Revenue up about 10% in FY2026 after 4% in FY2025; fraud and identity about 20%, cheques about flat.
Business quality3/4 →
Cheque capture is embedded at the largest banks and the fraud pool grows, but identity faces bigger rivals and cheques shrink.
Financial position4/4 ↑
Net cash about $50.8M after repaying the convertible, a loan due 2030 and $48.6M of free cash flow.
Execution record3/4 ↑
Guidance raised twice in FY2026 and controls remediated, after material weaknesses in FY2024.
Per share capture3/4 ↑
Diluted shares up about 6% since FY2022, buybacks near $10 and pay in shares near 8% of revenue.
Potential2/4 →
Cheque fraud and deepfakes are growing, but the cheque market shrinks and nobody sizes spend; deepfake revenue is undisclosed.
Risk profile3/4 →
One customer near 15% of revenue, USAA's patent suits against its bank users, and a shrinking cheque market.
Valuation3/4 ↓
At 25 times cash after pay in shares the price needs about 9% yearly growth, near the plan with nothing to spare.
Evidence quality3/4 →
Filed figures carry revenue, cash and debt, but the consortium, the surge and deepfake demand rest on management's word.
If it works 1.1× · if it fails you keep about 100%.
The Verdict
We rate Mitek Neutral. It is a solid business in two halves: cheque reading, which is flat in a market shrinking about 6% a year, and fraud and identity checks, growing about 20%. The price is fair: it asks for roughly the growth management already plans, with nothing to spare if part of this year's identity growth was one-off, as the finance chief said. As a bet it is defensive: deepfake detection could add a little, and the rest of Mitek covers today's price on its own. We would look again at a lower price, or if identity keeps growing after this year.
The long caseIf forged faces and videos become the usual way into a bank account, every bank must buy detection, and Mitek already sits in their apps.
The evidence under this - 5 claims
Fraud and Identity licence sales were strong in the first half and management said they would step down (S05).
- Cash after pay in shares fell over the last year (C20), so growth of 9% is a forecast, not a record.
- Revenue is guided about 10% for FY2026 and consensus has about 8% for FY2027 (C05, C23).
The 10-Q does not size the surge, so how much of the growth is one-time rests on the CFO's word alone (S04).
Adjusted EPS leaves out pay in shares and amortisation and uses a 15% cash tax rate (S03).
The company
When you photograph a cheque in your bank's app, the software that reads it is often Mitek's. Its Mobile Deposit has been used by the largest US banks for nearly 20 years, handling about 1.2 billion deposits a year, Mitek says.
The newer half checks people: that an ID is genuine, that the face holding it is live, and that a cheque is not forged. Check Fraud Defender pools fraud data from banks, and Mitek's liveness tools placed top three in an independent 2026 test. Over 7,000 organisations buy.
The evidence under this - 4 claims
The 1.2 billion is the company's own count; the Federal Reserve counts cheques but not the channel they arrive through, and that total is falling (C10).
- Contract value is the company's own measure, unaudited and not in the 10-Q.
- The Q3 figure comes from a transcript copy outside FMP, checked by two differently worded readings.
The 2026 ranking is the company's account; the organisers' own results were not found published (S16).
How it makes money
Banks pay Mitek under multi-year licences and subscriptions, often through the digital banking platforms they already use. Cheque reading is mostly licence fees renewed every few years, which makes quarters lumpy: a renewal landing early lifted cheque sales 24% in the latest quarter.
Fraud and identity is mostly subscriptions paid per check, which grow with use. Mitek already has $102.5M of contracted revenue it has not yet booked.
The evidence under this - 4 claims
Fraud and Identity licence sales were strong in the first half and management said they would step down (S05).
- The CFO called the cheque rise renewal timing rather than underlying growth (S06).
- Fraud and Identity licence revenue halved to $3.6M as an on-premise customer moved to SaaS, which flatters the SaaS rate (S03).
Where the money comes from, stream by stream
| Stream | Share of sales (FY2025) | How it earns it |
|---|---|---|
| Fraud and Identity Solutions | 50% | Identity verification, Check Fraud Defender, MiPass and liveness, mostly SaaS priced per transaction or by committed contract, plus some biometric licences. |
| Check Verification Solutions | 50% | Mobile Deposit and cheque-reading licences and support, renewed with banks and resellers such as FIS, Jack Henry and Candescent, lumpy by quarter. |
Who runs it
Edward West, who ran the cash-machine operator Cardtronics, became chief executive in October 2024; David Lyle has been finance chief since January 2024. Under them the forecast was raised twice this year.
Directors and officers own about 2.2% of the shares. Last year's bonus paid 152% of target on sales and adjusted profit, and the share awards from this year pay on returns against smaller US companies.
The evidence under this - 3 claims
Why it wins, and who could beat it
Why customers come back
Once a bank builds Mitek into its app, switching means re-testing a feature millions of customers use every week, so banks renew. One customer has bought 15% or more of Mitek's sales for three years running.
The fraud consortium adds a second hold: the more banks share cheque data, the better it spots fraud, and its yearly contract value rose 73% to over $22M. But the hold is on a shrinking habit, which is why cheque sales are flat rather than rising.
The evidence under this - 4 claims
- Contract value is the company's own measure, unaudited and not in the 10-Q.
- The Q3 figure comes from a transcript copy outside FMP, checked by two differently worded readings.
Fraud and Identity licence sales were strong in the first half and management said they would step down (S05).
Check Verification fell 5% in FY2025 and grew about 3% over the last four quarters (C02, C04).
The threat
Two threats. Cheques are fading: Americans wrote 9.2 billion in 2024, 1.8 billion fewer than in 2021. And in identity Mitek is small: RELX's risk division and private Onfido and Jumio sell the same checks with more money behind them, while regulators push every bank to buy defences against forged media.
The evidence under this - 4 claims
The rivals: RELX, and 4 more that are private, in-house or listed abroad.
Who else does this, rival by rival
| Ticker | Rival | Where it competes | How far along | Priced against it |
|---|---|---|---|---|
| Not listed | Falling cheque use as payments move to cards, ACH and ZellePriced against it: Not listed | Check Verification Solutions | On sale | Not listed |
| In-house | Banks and digital-banking providers building capture in-housePriced against it: In-house | Check Verification Solutions | On sale | In-house |
| RELX | LexisNexis Risk Solutions (RELX)Priced against it: Small part of it | Fraud and Identity Solutions | On sale | Small part of it |
| Private | Onfido (Entrust), Jumio and other private identity vendorsPriced against it: Private | Fraud and Identity Solutions | On sale | Private |
| Private | Identity vendors' own deepfake and injection detectionPriced against it: Private | Deepfake and injection-attack detection | On sale | Private |
How big it could get
How big this could get
Nobody publishes what banks spend on these checks, so the prize cannot be sized in dollars. What can be seen is the problem growing: cheque-fraud reports to the US Treasury's fraud unit nearly doubled to over 680,000 in 2022, even as cheque use fell.
So the cheque business is a shrinking market with more fraud per cheque, and the identity business a growing one where Mitek's share is unknown.
The evidence under this - 4 claims
- Contract value is the company's own measure, unaudited and not in the 10-Q.
- The Q3 figure comes from a transcript copy outside FMP, checked by two differently worded readings.
Fraud and Identity licence sales were strong in the first half and management said they would step down (S05).
Who has signed
Mitek has $102.5M of revenue under contract, $74.4M of it due within a year. A large UK bank moved to a multi-year committed contract this year, and a top-five US bank joined the fraud consortium after a pilot. Neither is named or valued.
The evidence under this - 3 claims
The results
The numbers
Sales grew 11% over the twelve months to Jun 2026, faster than the 4.4% in the year to Sep 2025.
Operating margin is 18%, up from 9.0% in the year to Sep 2023.
Yearly sales growth has ranged from −0.3% to +21% over the last 5 years, with sales falling in 1 of them.
Each dollar put into the business earns 9.3% a year after tax, about where it was (7.4%) in the year to Sep 2021.
It turned 25% of sales into free cash, $48.6M over the last twelve months.
It holds $99.7M of cash against $49.4M of debt, $50.3M more cash than it owes.
The share count rose 8.0% in 4.8 years, and pay in shares costs 8.2% of sales.
All the numbers
Filed figures from the company's 10-K and 10-Q, read 2026-10-31. Fiscal years end in September.
| Sep 2021 | Sep 2022 | Sep 2023 | Sep 2024 | Sep 2025 | 12 mo to Jun 2026 | |
|---|---|---|---|---|---|---|
| Size and growth | ||||||
| Sales | $120M | $145M | $173M | $172M | $180M | $198M |
| Sales growth | +18% | +21% | +19% | −0.3% | +4.4% | +11% |
| Profit | ||||||
| Operating margin | 11% | 8.4% | 9.0% | 1.3% | 9.3% | 18% |
| Net margin | 6.7% | 2.6% | 4.7% | 1.9% | 4.9% | 11% |
| What growth costs, per sales dollar | ||||||
| Research and development | 23% | 21% | 17% | 20% | 20% | 16% |
| Sales and marketing | 27% | 27% | 24% | 24% | 23% | 19% |
| General and admin | 19% | 18% | 25% | 31% | 25% | 24% |
| Pay in shares | 9.6% | 9.2% | 6.1% | 7.3% | 9.4% | 8.2% |
| Capital spending | 1.2% | 0.8% | 0.6% | 0.8% | 0.6% | 2.6% |
| Cash | ||||||
| Cash from operations | $37.3M | $21.1M | $31.6M | $31.7M | $55.3M | $53.7M |
| Free cash flow | $36.0M | $20.0M | $30.6M | $30.2M | $54.2M | $48.6M |
| Balance sheet | ||||||
| Cash and short-term investments | $179M | $90.3M | $134M | $130M | $193M | $99.7M |
| Debt | - | - | - | $2.70M | $152M | $49.4M |
| Net cash | - | - | - | $128M | $40.8M | $50.3M |
| Returns and shares | ||||||
| Return on capital | 7.4% | 6.7% | 6.4% | - | 4.2% | 9.3% |
| Shares (diluted) | 45.1M | 45.8M | 46.5M | 47.5M | 46.9M | 48.7M |
What growth costs
Growth has widened the margin: adjusted profit before interest, tax and amortisation was about 35% of sales over the last four quarters. Part of that is accounting, though. More development spending is now recorded as an asset rather than a cost, so reported research spending fell while the cash spent on it rose about 8.5%.
The evidence under this - 3 claims
Pay in shares is a real cost that recurs, near 8% of revenue (C20).
Purchases of property and equipment rose to $4.8M in nine months from $0.9M, consistent with capitalised software (S04).
Fraud and Identity licence sales were strong in the first half and management said they would step down (S05).
The last report (6 Aug)
Quarter ended June 2026, filed figures.
In its fiscal third quarter of 2026, to June, Mitek's sales rose 18% to $54.0M and it earned $8.4M. Identity subscriptions grew 37%. Management raised its forecast for the year a second time, to $195M to $200M.
Two things flattered the quarter. Cheque sales rose on a renewal arriving early, and the finance chief said part of the identity growth came from a one-time surge in age checks in Europe, the Middle East, India and Africa.
What it did to the thesisIt showed the identity half can grow fast, and the forecast held up. It left open the question the price rests on: how much of that growth was a one-time surge in age checks, which the full-year results and next year's forecast will show.
The quarter in detail
Sales growth from the previous quarter, filed figures.
Earnings per share $0.34 against $0.28 expected; $0.17 as filed, the gap being what the company adds back.
The evidence under this - 4 claims
- The CFO called the cheque rise renewal timing rather than underlying growth (S06).
- Fraud and Identity licence revenue halved to $3.6M as an on-premise customer moved to SaaS, which flatters the SaaS rate (S03).
The 10-Q does not size the surge, so how much of the growth is one-time rests on the CFO's word alone (S04).
Fraud and Identity licence sales were strong in the first half and management said they would step down (S05).
What management did with the money
Mitek repaid $155M of convertible debt in February and still holds more cash than debt. It bought back shares for $19.8M at about $10 each, near half today's price, and has approved $50M more.
Insiders in 2026Q3: 3 purchases and 2 sales, from their Form 4 filings.
The evidence under this - 2 claims
The price, and where we disagree
In short. Fair. The price pays for the growth management already plans, and for no more than that, from a business whose cash fell last year.
The shares rose 92% in a year while sales per share rose about 7%, so nearly all of the gain was buyers paying more. Three officers sold shares this year outside any pre-set plan, and nobody bought.
The test comes soon. Full-year results on 10 December will show whether the fourth quarter lands in the $42M to $47M forecast and what management expects for 2027. The head of cheque sales leaves two days earlier.
The evidence under this - 4 claims
The guide midpoint, $44.5M, is about flat on Q4 FY2025, so the raised full year leans on quarters already booked (C05).
How we read the multiple
Mitek's shares are worth about $815M in all. What has to be true:
1. Over the last four quarters it kept about $32.5M of cash after paying staff in shares, so the price is about 25 times that cash. 2. A buyer wanting 9% a year, a common yardstick, sells at 15 times that cash in ten years. 3. That needs the cash to grow about 9% a year for a decade, about the growth management forecasts for this year.
That cash fell last year as the shares doubled.
Against its own history. Buyers now pay more for each dollar of sales than they usually have, because the market has started paying for identity growth rather than for a cheque business.
The evidence under this - 4 claims
- Cash after pay in shares fell over the last year (C20), so growth of 9% is a forecast, not a record.
- Revenue is guided about 10% for FY2026 and consensus has about 8% for FY2027 (C05, C23).
Receivables rose $15.9M in nine months on late-quarter renewals, which management says reverse (S05).
Priced against its rivals
None of the listed rivals above sells the same thing to the same buyers as a large part of what it does. RELX does too, but as a small part of a much bigger company, so its price says little about this one. A price comparison needs at least two, so the price is judged against its own history instead.
The bet: what it pays if it works
The bet is on deepfake detection: software that spots forged faces and videos fed into a bank's identity check. Mitek sells it but reports no sales from it, while regulators say these attacks are rising fast.
Even if fifty large banks bought it, it would add only a few percent to sales. The rest of Mitek, at a fair price, already covers today's value, so the option is free but small. If it sells nothing, shareholders keep about what they hold.
| Deepfake and injection-attack detection revenue in two to three years | Institutions paying for deepfake detection needed | At the stated multiple |
|---|---|---|
| $5.00M (the big win) | about 50 at 100% kept | 1.1× |
| $25.00M | about 250 at 100% kept | 1.2× |
To pay 2× (a Fair bet) it would need about $193.48M of Deepfake and injection-attack detection revenue (about 1.9K institutions paying for deepfake detection); to pay 5× (a Cheap bet), about $805.00M of Deepfake and injection-attack detection revenue (about 8.1K institutions paying for deepfake detection), at the same multiple.
Each row is Deepfake and injection-attack detection alone, plus the rest of the company (Cheque verification and the rest of fraud and identity as reported) counted at about $856.80M.
The steps it has to take
- Done Liveness software ranked top three in the image category of LivDet-Face 2026
- Done Digital Fraud Defender sold as its own product
- Not started Mitek discloses a customer count or revenue for deepfake detection due 2027-12-10
- Not started Fraud and Identity grows 12% or more in FY2027 after the one-time surge due 2027-12-10
The detail behind the label
The evidence under this - 5 claims
No price or customer count for the product is disclosed (C36), so both figures are ours.
Adjusted EPS leaves out pay in shares and amortisation and uses a 15% cash tax rate (S03).
- Cash after pay in shares fell over the last year (C20), so growth of 9% is a forecast, not a record.
- Revenue is guided about 10% for FY2026 and consensus has about 8% for FY2027 (C05, C23).
Where we disagree with the market
Deepfakes make Mitek's identity business a fast grower for years, and the shares should be valued on that half rather than on cheques.
Identity growth is real, but part of this year's pace will not repeat and cheques keep shrinking, so the growth the price needs is the plan, not a floor.
The market may be right: identity is now the larger half, regulators keep warning about forged media, and the consortium grew fast. If identity holds 20% for years, today's price is cheap.
What argues against us is that the cheque half has not yet shrunk. It has held near $90M for two years despite fewer cheques, because the fraud on each one has grown.
What analysts say, and the evidence
The evidence under this - 5 claims
- Cash after pay in shares fell over the last year (C20), so growth of 9% is a forecast, not a record.
- Revenue is guided about 10% for FY2026 and consensus has about 8% for FY2027 (C05, C23).
The 10-Q does not size the surge, so how much of the growth is one-time rests on the CFO's word alone (S04).
Fraud and Identity licence sales were strong in the first half and management said they would step down (S05).
- Contract value is the company's own measure, unaudited and not in the 10-Q.
- The Q3 figure comes from a transcript copy outside FMP, checked by two differently worded readings.
What could go wrong, and how we would know
The risks
- One customer is 15% A single unnamed customer bought 15% of last year's sales; losing it would cut sales by about a seventh.
- A patent fight USAA has sued banks over mobile cheque deposits since 2018, and one bank platform has asked Mitek to cover its costs.
- Cheques keep fading Americans write about 6% fewer cheques each year, so renewals could come in smaller once the fraud bonus stops growing.
- Bigger rivals in identity RELX and well-funded private firms sell the same checks and can bundle them with data Mitek does not have.
- Insiders are selling Three officers sold shares this year outside any pre-set plan, and nobody inside bought.
- An unexplained cost jump Deferred sales commissions rose more than fourfold in nine months, and management has not said why.
The evidence under this - 6 claims
What we still do not know
- How much of identity's 20% growth was the one-time surge in age checks. The filings do not size it.
- How much deepfake detection sells. Mitek reports no revenue or customer count for it.
- Why deferred sales commissions jumped this year, and whether that brings sales forward.
The evidence under this - 3 claims
The 10-Q does not size the surge, so how much of the growth is one-time rests on the CFO's word alone (S04).
What would change our view
- Neutral→AttractiveA price that asks for less than the plan
It needs all of:
- ○The shares fall to 18 times the last year's cash after pay in shares, from about 25.checked daily
- ○Fraud and identity sales still grow 12% or more from a year earlier at the next results.checked at the next results, due by 10 Dec
- Neutral→AttractiveProof the growth outlasts 2026
It needs all of:
- ○Fraud and identity sales grow 20% or more in fiscal 2027.checked at the next results, due by 10 Dec
- ○Cheque sales hold at $90M or more over four quarters.checked at the next results, due by 10 Dec
We would also be wrong if
- Cheque sales fall below $80M over four quarters before fiscal 2028.
- The customer that bought 15% of last year's sales leaves or cuts its contract.
- A court finds Mobile Deposit infringes USAA's patents.
What is coming
- 8 December 2026 Head of cheque sales leaves: Whether cheque renewals hold under new leadership.
Every dated event ahead
- 8 December 2026 Head of cheque sales leaves: Whether cheque renewals hold under new leadership.
- 10 December 2026 Q4 and full-year FY2026 results: Whether revenue lands in the $195M-$200M guide, and the first FY2027 guide for both businesses.
- 5 February 2027 Q1 FY2027 results: Fraud and Identity SaaS growth after the age verification surge has passed.
Since we wrote this
- 1 NovThesis writtenNeutral, medium convictionWritten six weeks before the FY2026 results, after the shares rose 92% in a year on a higher multiple.
Sources 20
Sources - 20
Every claim above cites one of these, or states the reasoning that derived it. The quote is frozen at the date it was read: a link can rot, and an agent fetch returns a reading of a page rather than the page. Backs counts the whole claim ledger, so it can name a claim this page does not surface.
- S01primarycompany filing2025-12-11business description, products, competition by class, patents, customer concentration, revenue by product family in both presentations, employees, USAA litigation, the remediated material weaknessesbacksC01C02C08C09C15C22C29C32C33C36C39C40
- S02primarycompany release2025-12-11FY2025 results, the Q4 FY2025 quarter, the first FY2026 guide and the free cash flow series
Fraud and Identity portfolio which now represents more than half of the business
backsC02C04C05C20C28 - S03primarycompany release2026-08-06Q3 FY2026 results by product family, the raised FY2026 guide, adjusted EBITDA and free cash flow reconciliations, the new revenue chief and chairman
Record Fraud & Identity SaaS revenue of $24.8 million, up 37% year-over-year
backsC03C04C05C06C19C20C21C23C28C38 - S04primarycompany filing2026-08-06balance sheet, term loan, buybacks, customer concentration, remaining performance obligations, contract origination costs, share count, the 1.2 billion deposit figurebacksC01C03C04C08C09C19C21C22C27C29C36C37C39
- S05primarytranscript2026-05-07the consortium figures, license lumpiness, capitalised R&D, the Q2 analyst questions
Check Fraud Defender ACV now exceeds $19 million, up more than 50% year-over-year, with contributing data sets covering over 60% of U.S. checking accounts
backsC05C07C26C38 - S06secondarytranscript2026-08-06the Q3 consortium figure, the one-time age verification surge in EMEIA, the check verification range, capitalised development cost
Check Fraud Defender, whose ACV grew 73% year over year and now exceeds $22 million.
backsC07C17C18C26 - S07primarycompany filing2026-01-26beneficial ownership, executive biographies, salaries, the FY2025 cash incentive and the PSU designbacksC30C31
- S08secondaryvendor data2026-10-31Research pack (FMP market tier, FINRA short interest, Form 4 feed), frozen at content/MITK/research-pack.jsoncontent/MITK/research-pack.jsondaily closes, the analyst split and its series, consensus estimates, insider trades, short interest, the price-move decompositionbacksC21C22C23C24C25C34C40
- S09primaryregulator2024-11-13a regulator's finding that deepfakes are used against bank identity checks
FinCEN’s analysis of BSA data indicates that criminals have used GenAI to create falsified documents, photographs, and videos to circumvent financial institutions’ customer identification and verification
backsC12 - S10primaryregulator2023-02-27check fraud suspicious activity reports, 2021 and 2022
This upward trend continued into 2022, when the number of SARs related to check fraud reached over 680,000, nearly double from the previous year’s amount of filings.
backsC11 - S11primarygovernment data2026-07-01Federal Reserve, 'National Payment Volumes, Top-Line Data (CY 2015-24)', 2025 Federal Reserve Payments Study Board of Governors of the Federal Reserve Systemthe number and value of US check payments and their decline
Check payments fell to 9.2 billion by number and $24.45 trillion by value in 2024, down 1.8 billion and $1.92 trillion from 2021, respectively.
backsC10 - S12primarygovernment data2026-04-16reported AI-linked fraud losses
In 2025, IC3 received more than 22,000 complaints reporting AI-related information. Adjusted losses of these complaints exceed $893 million.
backsC12 - S13primaryregulator2025-04-17Federal Reserve, 'Deepfakes and the AI Arms Race in Bank Cybersecurity', speech by Governor Michael S. Barr Board of Governors of the Federal Reserve Systema bank supervisor's measure of how fast deepfake attacks are growing
Deepfake attacks have seen a twentyfold increase over the last three years.
backsC13 - S14primaryregulator2025-07-01NIST SP 800-63 Digital Identity Guidelines, Revision 4 National Institute of Standards and Technologythe US identity standard now requiring controls against injected and forged media
Adds controls for addressing injection attacks and forged media (e.g., “deep fakes”)
backsC13 - S15primarycompany release2026-09-02the company's account of the 2026 LivDet-Face result
its Presentation Attack Detection (PAD) technology took the top three places in the Image category of the 2026 LivDet-Face competition, an independent evaluation organized by the Center for Identification Technology Research (CITeR)
backsC14 - S16secondarynews2026-09-03Biometric Update, 'Mitek's passive liveness impresses in biometric image benchmark' Biometric Updatewho ran the test, how, and that IDLive Face finished second in 2024
The Center for Identification Technology Research (CITeR) organized the test in collaboration with Clarkson University and the University of North Carolina at Charlotte.
backsC14 - S17primarycompany filing2026-02-12a much larger listed rival growing in the same fraud and identity work
In Business Services, strong growth continues to be driven by Financial Crime Compliance and digital Fraud & Identity solutions, and strong new sales.
backsC16 - S18secondarynews2024-04-10ID Tech, 'Entrust Completes Onfido Acquisition' ID Tech (FindBiometrics)the size of a private identity verification rival, now inside Entrust
Prior to the deal, Onfido had more than $140 million in annual revenue, a customer base of more then 1,200 firms around the world
backsC16 - S19primarycompany filing2026-10-09the departure of the head of check verification sales on 8 December 2026backsC35
- S20primarycompany filing2026-05-15three discretionary sales in 2026, none under a 10b5-1 planbacksC34