Peter Salkowski – Investor Relations Jim DeBello – Chief Executive Officer and President Russel Clark – Chief Financial Officer.

Alper Tuken – William Blair Andrew Boyce – Piper Jaffray.

Good day and welcome to the Mitek Fiscal Second Quarter 2015 Financial Results Conference Call. Today’s conference is being recorded. At this time, I would like to turn the conference over to Mr. Peter Salkowski, Investor Relations. Please go ahead, sir..

Thank you Nancy. Good afternoon, everyone, and thank you for joining us. With me on today’s call are Mitek’s CEO Jim DeBello; and CFO, Russ Clark. Before I turn the call over to Jim and Russ, I’d like to cover a few quick things. This afternoon, Mitek issued a press release announcing its second quarter of fiscal 2015 financial results.

That release is available on the company’s website at www.miteksystems.com. This call is being broadcast live over the Internet for all of those interested parties and that webcast will be archived on the Investor Relations page of the company’s website.

On today’s call, we 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 forward-looking statements.

These forward-looking statements may include comments about our plans and expectations of future performance. Forward-looking statements are subject to a number of risks and uncertainties which could cause actual results to differ materially.

We encourage all of our listeners to review our SEC filings, including our most recent 10-K for a more complete description of these risks.

Our statements on this call are made as of today, April 30, 2015 and the company undertakes no obligation to revise or update publicly any of the forward-looking statements contained herein, whether as a result of new information, future events, changes in expectations or otherwise, for any reason.

Additionally, throughout this call, we will be discussing certain non-GAAP financial measures. Today’s earnings release and the related current report on Form 8-K describe the differences between our non-GAAP and GAAP reporting and present the reconciliation between the two for the periods reported in the release.

Now I’ll turn the call over to Mitek’s CEO Jim DeBello.

Jim?.

Thanks Peter and welcome everyone. Today Mitek reported record quarterly revenue of $5.7 million, this 26.5% year-over-year revenue growth resulted in both GAAP and non-GAAP profitability.

This was our ninth consecutive quarter of year-over-year revenue growth, our third consecutive quarter in which we delivered GAAP profits and our fourth consecutive quarter in which we were profitable on a non-GAAP basis. We’ve now surpassed 3,500 banks licensing our mobile deposit.

This is another major milestone representing nearly half of all the banks in the country. We’ve been awarded our ninth mobile deposit patent and 21st overall and result consistency in a clear growth trajectory for mobile deposit over the past couple of years.

It’s estimated that 47 million consumers now use our technology, given this consistent performance starting with today’s call, we feel confident in providing our investors with annual revenue guidance. The adoption of mobile devices is juggernaut and consumer habits are changing rapidly.

Mobile deposit is a steady performer with predictable growth, primarily in North America, where checks are used more frequently. But its success allows us to invest in bigger global markets in which are pioneering and best of the class mobile capture experience delivers more enterprise value in commands even greater prices.

We are using this success to propel our business into exciting new areas for our financial services customers and global 1,000 businesses, there are looking to acquire more customers via the mobile channel. Mitek’s mobile capture and identity solutions enable a superior consumer user experience that significantly improves customer acquisition rates.

Before discussing our product strategy in more detail, I’ll first provide an update on the performance of mobile deposit during the last quarter. We now have a total of 3,705 banks in financial institutions signed and 3,181 deploying our industry leading and patented mobile deposit solution.

An additional 401 financial institutions signed contracts last quarter. With 100% customer retention and nine mobile deposit patents, we have a dominant market position that we don’t take for granted. There is room for adoptions of our mobile deposit product.

The key growth drivers for mobile deposits are the number of banks signed, number of consumers adopting and number of transactions used. We estimate our market penetration at roughly 45% of all U.S. financial institutions leaving plenty room for growth in the retail bank channel.

More so in March 2015 Fed study shows that 51% of mobile banking users have used mobile deposits up from 38% last year, still plenty of room for growth. Plus we anticipate of growth from the commercial channel. We recently launched a version of our product that’s optimized for business deposits.

Business-to-business checks make up the majority of total checks in circulation, representing another growth opportunity from Mitek. Mitek is passionate about reducing consumer friction in the mobile channel and we are really, really, good at it.

We made it fun to deposit a check and have helped transform the banking industry with what we call the Mitek magic. Now that we’ve proven the benefits of our technology, we think there are even bigger global opportunities to apply our science.

As smartphones proliferate worldwide, consumers are changing their habits and finding it quicker to open a bank account, apply for a credit card or purchase products only using their mobile device. Often this requires entering personal information from a diver’s license or other ID.

And sometime it requires providing additional documents like a utility bill for proof of residents. However, the inconvenience of touch screen keyboards result in a high percentage of errors and [indiscernible] before an application or order is completed. Sometimes this is high as 50%.

Often documents have to faxed in, I’m talking about friction in securing a new customer. Furthermore, the unreliability of the document of intensity is a fundamental problem in determining an acceptable risk profile and often results in denying service to a qualified individual.

The system is broken and it is not capable at handling the avalanche of new account openings for mobile only customers. Businesses need solutions that go beyond unreliable challenge questions or other methodologies not suitable for today’s mobile consumer to demand instantaneous results.

This presents a unique opportunity for Mitek and a challenge for every business that engages their consumers on a mobile device. Every one of those businesses needs to say yes, more often to good customers while reducing friction in each engagement.

We believe that we are well position with our proven mobile capture technology to provide solutions address this painful problem. We’re investing an opportunities that expand our market position with mobile capture and identity solutions that improved customer acquisition and loyalty.

We expect these initiatives to broaden our mission and expand our total addressable market worldwide. We further expect to command higher selling prices by capturing more of our customers’ value chain and provide Mitek traction in the global identity and access management marketplace, a market, which is expected to grow to $7 billion by 2017.

With mobile deposit at a solid backdrop, we are funding initiatives that leverage the mobile capture technology we invented and the customer relationships we’ve established.

Recently we launched on account opening app that allows consumers to automatically complete a form with personal data by taking a picture of a drivers’ license of passport using the camera for data entry and verification. And soon, we’ll be the first company to deliver this capability via a mobile browser.

There is value in on-boarding data from a snap shot. Just a year ago, less than 10% of all applications were coming through the mobile channel. In just one year, the percentage of account opening applications from the mobile channel has more than doubled and continues to grow rapidly.

This shift is providing and improving mere [ph] challenge for our business customers. While they have systems in place that are good at on-boarding customers through a desktop computer. There are next generation of customers are coming via the mobile channel and they are losing many of those new customers to friction, inconvenience and abandonment.

Mitek’s mobile based account opening product had potential for double the yield from enterprise digital sales and marketing activities by reducing friction through the easy upload of data, resulting and lower abandonment rates by consumers.

And we continue to invest in technologies that provide highly accurate verification of the driver license wherever identity documents whether a passport, military or student ID. At Mitek we remain passionate about reducing customer friction in the mobile channel.

We believe customer acquisition is the next chapter for Mitek and we believe the opportunity can generate substantial returns for the company and our shareholders. We are very proud of our mobile deposit business, which we built from the ground up.

We pioneered the movement to use the camera and the keyboard and in doing so, we are able to provide millions of consumers with a great user experience and our customers with great value.

Today we have the people, technology, customer relationships, balance sheet and a well-established beachhead business in mobile deposits that provides us the opportunity to fund new growth initiatives. We are proud of our fiscal second quarter results and remain very optimistic for the future of Mitek.

And with that I will turn the call over now to Russ, our Chief Financial Officer for a more detailed review of our quarterly results and annual guidance.

Russ?.

Thanks Jim. Hi, everyone and thank you for joining us on today’s call. As a reminder all financial figures I site today are on a GAAP basis, unless I specifically call the number as non-GAAP. Our earnings release includes reconciliation between these two measures.

We believe that excluding non-cash stock compensation and litigation expenses from non-GAAP earnings provides a useful usual measure that the company’s operating results. Also as reminder, our fiscal second quarter and is March31. So any quarters that I note will be on that basis.

During Q2, we experienced a 26.5% year-over-year increase in revenue to a record $5.7 million, resulting in non-GAAP net income of $1.7 million. This was the seventh consecutive quarter with revenue over $4 million and the fourth consecutive quarter of non-GAAP as income.

Q2 software revenue of $4.0 million included 12 mobile depository orders and increase of 28%, compared to a year earlier software revenue of $3.1 million. Mobile deposit reorders continue to comprise a lion share of our license revenue.

Q2 maintenance and PS revenue of $1.7 million increased 23% over last year’s Q2 maintenance and PS revenue of $1.4 million. We continue to benefit from consistent growth in our maintenance stream as a result of growth in mobile deposit base. Total Q2 operating expenses were $5.2 million, compared to $6.7 million in the year-ago period.

The year-over-year decrease resulted primarily for lower, selling and marketing, R&D and G&A expenses. Q2 selling and marketing expenses were $1.4 million compared to $1.9 million in the year-ago period and $1.4 million in Q1, as we are able to continue to make targeted investments in sales and marketing programs and personnel.

R&D expenses were $1.4 million in Q2 compared to $1.6 million in the year-ago period and $1.2 million in Q1. While we have seen some quarterly fluctuations in R&D expenses primarily as a result of outside contractor spend, we continue to invest and our hiring engineers with software, mobile, and computer vision experience.

Our Q2 G&A expense were $1.8 million down from $2.7 million in the year-ago period. This decrease is attributable to a decrease in IT litigation expenses as we had a higher level of activity in the prior year. Non-cash stock compensation expense during Q2 was $871,000 compared to $916,000 in the year-ago period.

GAAP net income in Q2 was $508,000 or $0.02 per share compared to a net loss of $2.2 million or $0.07 per share in the year-ago period. As I mentioned, Mitek reported non-GAAP net income of $1.7 million or $0.05 per share for the quarter, compared to a non-GAAP net loss of $43,000 or break-even per share for Q2 of 2014.

Our EPS share count for Q2 was $30.7 million basic and $31.3 million diluted shares. Now looking ahead, investors have long asked us when we will have enough visibility into our revenue pipeline to begin to provide revenue guidance. As Jim mentioned, that time is now.

This quarter we will begin to provide annual revenue guidance that we will update each quarter if necessary. We expect fiscal 2015 revenue to be between $22.5 million and $23.5 million. Our guidance is based on a continued growth of mobile deposit.

We expect total Q3 OpEx to be between $5.25 million and $5.75 million excluding litigation and other expenses. We plan to continue to make targeted investments in sales and marketing programs in personal and through a top engineering talent. Litigation expenses are expected to $300,000 to $400,000 per quarter for the remainder of the fiscal year.

Turning to the balance sheet at the end of Q2, cash, cash equivalents and investments totaled $28.2 million, compared to $26.9 million at the end of Q1. Mitek generated $1.3 million of positive cash flows during Q2 as a result of our revenue growth, targeted spending and relatively low DSOs.

Our accounts receivable balance of $3 million represented a DSO of 47 days for Q2 which is lower than last quarter’s DSO of 50 days and remains within our normal historical range. That concludes our prepared remarks. Operator, please open the line for questions..

Thank you. [Operator Instructions] We will take the first question from Bhavan Suri with William Blair..

Hey guys, this is Alper Tuken in for Bhavan, can you hear me all right?.

Yes Alper..

Hi Alper..

Hi.

And I’m not sure if you guys are going to stop disclosing this metric, but I was just kind of wondering what the number of reorders were for mobile deposit and how the ASP trended during the quarter for those reorders?.

Sure, Alper. I did in my comments disclose the number of 12 reorders from mobile deposit for the quarter. So that is the number that is out there and we have continued to disclose at every quarter.

In terms of ASPs, the average ASPs that we’ve seen for mobile deposit over last several quarters have maintained a similar average though, we feel good about that..

Okay. And I notice the number of banks that were both signed I have saw a little bit of a higher absolute increase quarter-over-quarter than they have kind of last few quarters.

And was just wondering if you guys can kind of talk to the strength there that you were able to see in this quarter?.

I think, Alper this is Jim answering that question, it was 401 new banks this past last [ph] quarter which is not a record but it is a large number and it’s consistent with prior quarters in the 300 range.

So we see continued interest it’s a game changing technology in mobile deposit it’s a great way to engage customer royalty, based on using it as away to provide superior service, but also reduced their cost.

And so I think that just simply populating [ph] for the entire industry, there is a total of 8,000 banks in the industry here in North America, we’ve got 4,500 or so of them, employing 700, who were signed to near half – sorry over half and we expect that to continue to grow..

Okay, thank you, that’s all the questions I had. Thank you guys for taking my question..

Thank you..

[Operator Instructions] We will go next to Andrew Boyce with Piper Jaffray..

Hi, guys thanks for taking my question this is Andrew obviously said by on for Mike. I guess first could you kind of just talk about your plan to increase your market share essentially within the global identity management I noticed get sort of $7 billion, I mean, kind of how do you think about gaining share in that market..

Well, through consistent product innovation as how we have done in the past and we plan to continue that.

We launched our Mobile Photo Account Opening product and its resonating with our customers, we have customers who are currently deploying it to have individual new customers sign on by taking a photograph of the drivers’ license as an example, to on board that data.

We also do light verification by comparing certain metrics of the front and back of that license..

If you imagine seeing an ad you like or promotion from a particular company that you want to engage, you don’t want to have to be forced that they downloading an app to apply for your device. Doing it through the browser is instantaneous, it’s easy and it’s very, very accurate.

So we think that’s going to be the way to open the market dramatically for us for the next several quarters. So it’s the product innovation that we see a way for us to expand in the new adjacent markets and potentially in global markets..

Okay, perfect. I definitely appreciate that color. And kind of based on that mobile web, I know you guys had integrated that essentially within the licensing deals you already had with an existing banks. Do you have any updates on that or you rolling that out your still piloting the mobile web..

Mobile web is still in pilot and we have upcoming announcements when it is available for general use and purchase..

I mean have you rolled out the pilot two more banks are you kind of still at that same level that you were at after the first quarter?.

When we roll a product we typically select a limited number of large institutions who have [indiscernible] all the resources to properly pilot it that remains consistent as we continue to test and refine the product..

Okay, prefect.

And then also just looking at the mobile deposit in UK and Brazil, I know you guys have talked about in the past a legislation update, is there any colors on that?.

It is slow as you would expect and there is no update on that..

Okay, so it’s still just pending, would you think 2015, 2016 still or you are looking more 2016, 2017?.

Really don’t know but we have been told still 2015 to the UK and 2016 for Brazil..

Okay. I guess and then lastly as far as my snap goes I know you guys have said three of the five top banks user available to 33 million people.

Do you guys have an update on those numbers?.

Yes, we expect the fourth top bank to be launching publicly soon..

Okay. Perfect. Thank you very much. That’s all I have..

Great..

[Operator Instructions] And it does appear that we have no further questions at this time. Now I will turn the conference back over to Mr. Salkowski for any closing remarks..

Great, thank you, Nancy I would like to thank everyone for being on the call today. We appreciate your support and with that we will talk to you next quarter. Have a good day. Take care, bye-bye..

That concludes today’s presentation. Thank you for your participation..