Yesterday,
$MITK reported earnings. Their earnings were a mixed bag between the two segments: mobile checking deposits and id verification. Mobile deposits accelerated to 24% top-line growth while id verification decelerated to 16% top-line growth.
The mobile deposits had strong growth well above what I or many analysts would estimate. This growth seems to be driven by the Check Fraud Defender product which has been very successful. Mitek’s existing customers are using their services more.
On the ID Verification side, Mitek’s growth slowed to 16%. It was 30% last quarter and it was previously much higher. Management blamed tough comps as a “substantial” project ended and stated that they will have tough comps for the next three quarters.
This could be a very legitimate headwind, but it also makes me worry that they acquired Hooyu because they needed to keep growth on the ID side. Hooyu is going to add ~10 million in revenue and make it appear that they have stronger growth.
The acquisition also pushes back when the ID verification business breaks even. While this could be legitimate, management could also be using the acquisition as an excuse for the underlying business not being as strong as I previously thought.
Overall, it was a very strong quarter on the mobile deposits side and a concerning quarter on the ID verification side.