Good day, and welcome to the Mitek Systems conference call. Today's conference is being recorded. At this time, I would like to turn the conference over to Todd Kehrli, MKR Group. Please go ahead, sir. Thank you, operator. Good morning, and welcome to Mitek's conference call. With me on today's call are Mitek's Chief Executive Officer, Max Carnecchia, and Chief Financial Officer, Frank Teruel. Before I turn the call over to Max and Frank, I'd like to cover a few quick items. Yesterday, after the close, Mitek issued a press release announcing its acquisition of HooYu. That release, along with supporting materials, including a slide presentation, are available on the company's website at miteksystems.com. This call is being broadcast live over the Internet for all interested parties, and the webcast will be archived on the investor relations page of the company's website. I want to remind everyone that on today's call, management 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 the company's 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 and 10-Q for a complete description of these risks. Our statements on this call are made as of today, March 24, 2022, 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. With that said, I'll now turn the call over to Mitek's Chief Executive Officer, Max Carnecchia. Max. Thank you, Todd, and thank you everyone for making the time to join our conference call today. I'm thrilled to announce that Mitek has acquired HooYu, a company globally recognized for their onboarding platform designed to increase integrity of KYC. Frank and I are currently in the U.K. with the HooYu team to begin the process of integrating our organizations, teams, and technologies. I'm excited to discuss the acquisition with you this morning, and we'll begin by providing a brief overview of HooYu, our strategy for integrating our combined technologies into a holistic identity platform, and how this accelerates the strategy and growth of our identity business. On our investor relations site, you can find a slide deck that we prepared for investors to reference during our prepared remarks. We'll turn to slide three, the transaction overview slide. The acquisition of HooYu represents an exciting milestone in the continued execution of Mitek's multi-year strategic vision to build an industry-leading identity verification platform, serving the needs of highly regulated financial institutions around the globe. HooYu is a U.K. Based KYC and digital onboarding provider known best for their low-code, no-code orchestration platform. Founded in 2016, the platform provides user experience tools to deliver customized mobile or desktop digital journeys built not only to increase the integrity of KYC processes, but to maximize the percentage of customers that can be successfully onboarded. HooYu has been growing rapidly, and is today used by tier one banks such as NatWest, leading online gaming operators such as Betfred, and challenger banks such as Virgin Money, and many regulated firms across the gaming and financial services, primarily in the U.K. We believe the integration of HooYu's innovative orchestration capabilities, together with our existing AI biometrics and digital identity verification solutions, creates the most powerful multilayered identity and compliance platform in the market and will help clients accelerate their fight on fraud while also enhancing the scale, market position, and growth opportunity for Mitek's identity solutions. Turning to slide four, the macro backdrop slide. The surge in online commerce, together with the rise of cryptocurrency and NFT markets, has given bad actors more avenues and access points than ever to commit fraud. As sanctions lists continue to grow and update, enterprises grapple with continuing to stay compliant while still giving good customers a smooth identity onboarding journey. It is no surprise, therefore, that digital identity verification plays a significant role in assisting regulated enterprises to manage the customer engagement and stay compliant. We've just recently seen the British Prime Minister bring forward the Economic Crime Transparency and Enforcement Bill to help the National Crime Agency prevent foreign owners from laundering their money in U.K. property. By adding additional inspections of PEPs, sanctions, and adverse media to Mitek's arsenal of identity verification resources, our combined customers will have a comprehensive set of tools at their disposal to ensure they can trust the individuals who are utilizing their services. Regulatory compliance, however, is just one benefit of a well-executed identity verification. Digital identity is undergoing a massive transformation. Consumers are demanding ease and security of access at all digital touchpoints. Consumers are more informed and less patient, and they want control over their data and their digital identity, but they also want easy and convenient access. They expect digital commerce to provide them a safe way to stay safe while not having to repeatedly onboard or verify. Identity has become a foundation of trust that powers this digital economy. It's becoming more and more complicated, and enterprises are struggling to keep up. As you can see in slide five, the Gartner orchestration slide, enterprises are increasingly turning to a more integrated, multilayered identity and cybersecurity solution that integrates a multitude of risk signals and identifiers within a single platform, delivers seamless customer experience across channels, integrates with existing, often legacy tech stacks, and keeps them compliant with today's increasingly complex and dynamic regulatory environment. Gartner recommends in its 2022 Market Guide for Identity Proofing and Affirmation, released earlier this month, that security and risk management leaders responsible for identity and access management and fraud detection should manage risk across the user journey by deploying an orchestration solution to manage the complex interplay between identity proofing, fraud detection, and user authentication capabilities. They go on to clarify that a good orchestration solution will reduce the cost and complexity of multiple vendor integrations while enabling granular risk and trust assessment across a range of user events and enabling contextualized user journeys. The combination of Mitek and HooYu does just that. As you can see in slide six, the acquisition of HooYu enables us to provide clients with the strongest combination of biometrics, data signals, and document validation all through a single orchestration platform. Mitek will integrate its industry-leading digital identity and document verification solutions and innovative AI-based face and voice biometrics capabilities into the HooYu orchestration platform. Together with their real-time data signals, including PEPs and sanctions, bureau checks, geolocation, and other digital signals, we will deliver a truly end-to-end identity and compliance solution. HooYu innovative no-code orchestration and onboarding capabilities will enable Mitek's clients to accelerate their deployment of identity solutions across channels as well as personalized workflows. These workflows can be monitored and optimized through a single portal, which is the front end of the identity confidence scoring engine that enables our customers, particularly those in regulated entities, to take the risk-based approach to vetting their end users. The solutions and capabilities acquired through HooYu are highly complementary with our existing technology offering and will accelerate our organic development roadmap. With our combined platform and technology capabilities, Mitek is well positioned to continue to invest in expanding our suite of innovative digital identity solutions and continue to serve the evolving fraud and compliance needs of our clients. This acquisition of HooYu is the latest step in Mitek's long-term strategy to place identity at the heart of secure omni-channel commerce and deliver on our mission to be an indispensable partner in fighting identity fraud for the markets and geographies we target. As slide seven highlights, this combination sets us up to service a larger addressable market from a geography and vertical sector, as well as rapidly growing our use cases. Our combined technology deliver greater value to our collective customers in the form of infrastructure, cost reductions, and innovation. As we look to the future, this acquisition also brings innovation that we will leverage to build out an e-wallet offering, which will further enhance our offerings relative to the market's push towards a reusable identity. Liminal Strategy Partners, a leading market research firm, reports that the market opportunity for reusable digital identity is set to grow to $266 billion by 2027 as countries like the U.K. and blocs like the EU enact legislation to drive digital identity. The HooYu acquisition brings a reusable digital identity capability to Mitek, where users can create a digital identity once and then reassert their verified identity to other organizations. According to Liminal, the Liminal report, as the market evolves, reusable identity is the natural next step for consumer identity, allowing people and enterprises alike to create identity credentials that can be integrated across different use cases in both the digital and physical world. Consumers are becoming increasingly frustrated at having to repeatedly onboard for each digital engagement, and to quote from the report, "With increased consumer demand for privacy and security, digital identity is no longer a nice-to-have. It is a pillar of success." With that, I'll turn the call over to Frank. Thank you, Max, and thank you all for joining the call today. Let me also express a very warm welcome from the Mitek nation to our new HooYu colleagues. Over the course of the last few months, as we have worked on assessing the strategic fit between our organizations, it has become clear that in addition to the benefits that Max just discussed, we share a strong cultural philosophy, a passion for innovation, and deep identity and fraud prevention DNA that will serve our customers well. I am delighted to welcome you to the team. As you know, in February of last year, we stood up convertible note for $155 million so that through acquisition, we would increase the scope and strength of our offerings in the identity verification, biometrics, and fraud prevention markets. Over the intervening months, we have deliberately focused our acquisition target efforts on assets that provide an orchestration platform with a low-code and no-code integration that will accelerate adoption. As a capability, orchestration represents table stakes for market leaders that want to provide their high-growth customers with identity proofing capabilities such as KYC, KYB, AML, PEPs and sanctions signals, and the conclusions necessary to inform identity decisions throughout their consumers' digital interactions. Moreover, the complexity of integrating into diverse customer workflows across all the segments that we serve and target has led to the need for a simpler low-touch integration model. This target effort ultimately led us to HooYu. There are very few assets in the market that offer the combination of both a platform for deep and rich orchestration of identity resolution and the ability to deploy using a low-code, no-code integration to facilitate quick adoption in markets with those requirements. HooYu provides us both of these features, which is what makes it such an attractive and timely acquisition for Mitek. We are excited about leveraging the power of our combined technology offerings to go-to-market capabilities to extend our identity solution to more customer workflows, increase our channel across new geographies, markets, and new use cases. Turning to the financial performance impact of the combination, we have been consistent in our position that Mitek's identity and fraud prevention offering should continue to deliver at the high end of the CAGR published by the analysts to track our space. HooYu's historical growth has far exceeded this benchmark, and while the outlook for both Mitek's existing identity business as well as HooYu's on a standalone basis are strong, what I am most excited about are the incremental growth opportunities unlocked through our combination. Through this acquisition, Mitek adds almost 100 new customers, a strong complement of 160 new colleagues comprising engineering talent, go-to-market teams, and identity verification analysts located in the U.K. and Europe. We believe that our combined offering will allow us to continue to achieve those significant growth rates and will accelerate the inflection point where our identity revenue surpasses our deposit revenue. Together, we will enter new geographies and markets with a powerful solution that will continue to drive significant revenue growth rates. Now, while the integration investment required to combine our solutions and fund our go-to-market activities will affect operating margins in the short term, we believe profitability in the identity business gets pushed from the end of fiscal 2023 into the second half of fiscal 2024. All in all, an investment worth making given the high potential growth upside. That said, we will continue to focus on operating Mitek with the appropriate investments necessary to fuel growth while also ensuring operating margins are reflective of our efficiencies and scale. I'm truly excited at the addition of HooYu to the Mitek nation. Today is a seminal moment for us at Mitek, one in which we together take a significant leap forward in delivering to our customers a rich identity and fraud prevention platform that helps them better understand their customers. Knowing a customer is a linchpin in a dynamic identity and fraud prevention market where getting identity right has never been of greater consequence. Welcome, HooYu. Great to have you on the team. I will now turn the call back to Max. Thanks, Frank. In closing, the acquisition of HooYu is a crucial milestone for Mitek as we continue to grow our identity business and gear up for a future of passwordless access and reusable identities. It scales Mitek's already high-growth identity business and opens our technology to a whole new tier of organizations through low-code, no-code implementations. With the shift to digital, the growth of data and the increase in fraud and regulation, this new multi-layered identity and compliance platform allows enterprises of all sizes to use world-class identity verification and biometrics as a way to differentiate and innovate. With this acquisition, there is no greater combination of identity tools on the market today, and we're thrilled to welcome the HooYu team to Mitek. With that, we'll now open the call for questions. Thank you. If you would like to ask a question, please press star one on your telephone keypad. Please ensure the mute function on your phone line is switched off to allow your signal to reach our equipment. If you find your question has already been answered, you may remove yourself from the queue by pressing star two. Again, please press star one to ask a question. We will take the first question from Jake Roberge from William Blair. Hey, guys. Thanks for taking my questions and congrats on the great acquisition. Just want to touch on the pricing and go-to-market perspective. Are you planning to sell these capabilities as standalone products that you can just add into the sales bag? Or are you looking into broader platform go-to-market and pricing strategies? I would assume one plus one equals three in this type of case scenario, but just kind of curious how you're looking at these things from those type of perspectives. Sure, Jake. It's Max, and you know it's early days, right? We're really in those we've been focused on getting closed successfully and today Frank and I and others here in London to welcome our new colleagues and onboard them appropriately. We'll work immediately following that on the integration. I think maybe just to stake out some ground directionally, you know what this puts Mitek in a position is to deliver the capabilities for identity the way partners and customers want to consume them, right? There's this spectrum where we can deliver components like the SDKs and the on-prem bits that come from ID R&D for the biometrics, the face, the voice, the documents. You can build those up to cloud-delivered modules like Mobile Verify and some of the things we're doing with multimodal identity authentication. Those basically get integrated into the HooYu platform, and you end up with this really easy-to-implement, really easy, you know, slick user interface portal to create your journeys and to manage those orchestrations while accessing the best-in-class Mobile Verify, ID R&D, Mobile Verify identity verification and ID R&D, you know, biometric liveness detection. Back to your question on pricing, I, you know, obviously the more value we can create, I think the higher the price we can command. That's great. Then just thinking about the broader platform, I know you raised $155 million back about a year ago. Just curious how you're thinking about M&A on a go-forward basis. This is pretty sizable acquisition, will definitely take some time to kind of digest and integrate. Would you say that you're putting that on pause as you integrate things and really understand how this whole ecosystem and product works together? Are you still kind of actively examining different candidates from this perspective? Yeah, I think we always have to be opportunistic. I'll let Frank make some comments as far as kind of, you know, what shape that leaves our balance sheet in. We're so excited about the opportunity here. You know, for the foreseeable future, we really need to stay focused and making sure that we get super aligned as to what the priorities, what the areas of focus, how we create clarity for customers and really where we're gonna go get it, you know, going forward. It just increases our opportunity. We can go to so many different directions, so many different geographies, so many different vertical industries, so many different size of businesses. You know, we've really been, as Mitek standalone, only focused on the top tier companies that had the hardest problems. You know, with the ease of use of the orchestration layer and the no-code, low-code, there's so many places we can go with this. Bringing some focus to it or intentionality as we start to expand that aperture, that's job one for us, and that'll be all consuming for the coming months. Hey, Jake, it's Frank. Yeah. Great to speak with you again. Yeah, it's a really good question. We're in a very strong liquidity position. You know, as you know, that we generated a lot of cash and the convertible note was set up just for this purpose. As Max indicated, job one right now is the go-to-market efforts, the integration efforts. But we will be opportunistic and you know, so you keep our eye on the ball, and we've got definitely enough powder to get that done. You know, we don't view this as a situation where it's one or the other. It doesn't have to be binary. We'll be looking at both options and, you know, working through this great acquisition and then welcoming the HooYu team on board, integrating them into our kind of various go-to-market efforts. At the same time, you know, keeping our eye on the ball in terms of what's happening in the identity market. It's a dynamic market as you know. This is a huge seminal moment for us in the first step, but certainly, we're not gonna pause those efforts. We'll keep our ear to the ground. Yeah, definitely. Congrats again on this acquisition. It's awesome to see you really start to form the biometrics, document-based verification, geo-locating all these real-time data signals. Definitely becoming a pretty broad and differentiated platform in the market. Congrats again on the great acquisition. Thanks, Jake. Thanks, Jake. As a reminder, to ask a question, please press star one. We will now take the next question from Mike Grondahl from Northland Securities. Hey, guys. Good morning, and thanks. Probably afternoon where you guys are sitting. Help me understand the HooYu sort of use case a little bit. I think it's onboarding with an emphasis on KYC based on your comments. Can you kinda take us through the use case at NatWest or Betfred or Virgin Money, just so we understand specifically what they're doing? Yeah, sure thing. You know, Mike, it is onboarding, but it's not just onboarding. I think if you go to that, you know, the materials that were provided, there's, I wanna say it's slide five, the enterprise requires integrated multi-layered solutions to manage the complex identity landscape. There's a good Gartner chart there that really kind of explains, you know, how this life cycle moves from onboarding, you know, a new user and the account opening and identity proofing and affirmation that's required on through step up to high-risk activities, right? Somebody wants to do something, you know, over a certain, you know, currency, dollar, pound, euro threshold that they don't have the rights to, you know, how do you re-verify? If they lose their device or they need to be rebound, you know, how do you get that device and that individual rebound reattached to the account? If there's credential recovery, so they can't remember their password, their traditional password, how do you do that proofing and authentication? Those are all great use cases. What this allows is for that to get stood up really quickly. It allows for the use of more than just the identity credentials of, you know, driver's license, passport and, you know, the selfie liveness check, all the databases that are available, the PEPs and sanctions, all of the credit bureau information, depending on what market and what geography you're in, and then allows for those journeys to be managed over time. Both as the regulations and the statutory requirements change, but also as, you know, just as the business requirements change, it allows for those customers either working with us or on their own, you know, with a lot of independence and, you know, a lot of speed and agility to orchestrate and make those changes, manage those changes. It's pretty exciting. I think that's, you know- That's helpful. When we talk about how, yeah, how complicated the interplay of these multiple attributes has become, you know, giving customers an easy way to do that just becomes so essential. Got it. Did you guys mention what HooYu's 2021 revenues were? Just related to that, I think you said it's closed, but I just wanna double-check that. Yeah. Hey, Mike, Frank. Great speaking with you again. We did mention it. What's interesting though, as I mentioned in my remarks, you know, we've kind of always managed you know, the kind of the view of Mitek's identity revenue that we should be living at the high end of the CAGR that you know the analysts are tracking us at. HooYu's growth rate exceeds that benchmark. You know, we're glad to have them on board. As I said earlier, I think our standalone identity business, their standalone business will collectively and individually, you know, really thrive. We haven't given that number, but definitely we expect them to continue at the very high end of that range or exceed that high end of that range. The deal is done. Got it. Okay. Thank you. Thank you. As a reminder to ask a question, please press star one on your telephone keypad. We will now take the next question from Allen Klee from Maxim Group. Please go ahead. Yes. Hi. Congratulations. Could you talk a little about how they get paid? Is it based on transactions? Is revenue correlated to transactions? If there's any comment on kind of the organic growth they get from that and the potential margins of their business. Hey, Allen, it's Max. It's very much a transaction-oriented business where, you know, they're getting commitments from customers for some form of minimums, and those customers typically run up beyond minimums, not unlike the Mitek identity business. The pricing has more to do with, you know, what signals that customer is consuming. So the more signals, obviously, you know, the likelihood that the per transaction fee is gonna be higher. And then your second question, you know, these guys have been around only since 2016. It was not a kind of venture funded kind of gig here. They took some external money, but it was largely bootstrapped. They've been extremely responsible in the way that they've tried to grow the business, where there probably has been greater growth opportunity, but they've been disciplined. That's a long-winded way to put the context around they've been a cash consumer. That's Frank Teruel's comments around, you know, pushing out identity breakeven at Mitek in the combination is just a function of us, you know, consuming something that's not cash flow positive today. Could you just explain one more time for the existing type of business that Mitek has, how you're gonna be adding what they're bringing and how that can create more value to the customer and new revenues? Sure. For both our existing customers as well as our target accounts, the prospective target accounts we have, they're under continued pressure to be able to not just take things like identity document, identity verification and the biometrics, but a host of other attributes, identity attributes, and be able to coordinate their use in an end-to-end journey for some new user who's trying to onboard. What this brings is the orchestration and the creation of that entire journey, not just the bits that we have participated in the past. In essence, yesterday Mitek was an attribute provider for digital identity verification. Today we are a platform with a series, a suite of applications for the design of those journeys, for the orchestration of those, management of those journeys, the analytics to determine the effectiveness of those journeys, and a case management system to deal with any of the anomalies that have to be researched and you know kind of run to ground. It's a pretty big and bold move for us to go from an API SDK provider to a platform suite of identity compliance and KYC offering. I'm guessing that most of your current customers have a way of doing KYC. If a sales guy or girl is talking to them, what is the pitch for why they would switch to you? Yeah. Both existing customers and prospective customers or even our competitors' customers typically have more than one use case, right? Trying to then, you know, orchestrate that journey, find another use case, orchestrate that journey, keep those fresh and they're not set them and forget them, right? This isn't something you just kind of set up and walk away. They have to be monitored, they have to be refined, they have to be managed. The opportunity for us is to come in, you know, starting with some of the low-hanging fruit and replace some of that handcrafted application development work that they've done, the custom application development work they've done with now an out-of-the-box solution that they can manage and rely on us to take care of. That's for the existing Mitek customers. I think for our prospective customers, you know, this both the targets we have, but this then opens up a whole another swath of prospective customers where historically, you know, there are organizations that just don't have an army of developers to build, you know, they don't have application developers to build those orchestration capabilities. Yeah. Now, you know, with the low code, no code, literally within hours of wanting to start to do a test or a proof of concept, we can, you know, provide credentials and access and have that prospective customer, you know, working with us in a, you know, in a real live environment, with all of the capabilities they need there to not just run the test, but able to, you know, start doing kind of phase zero work, towards having a solution of their own. That's really helpful. Thank you so much. You got it, Allen. Thanks, Allen. We will now take a follow-up question from Mike Grondahl from Northland Securities. Please go ahead. Yeah, Max. I think you talked or you said something about, you know, potentially a new e-wallet offering. Can you just explain what you meant by that? I think most of the research, most of the analysts, you know, in this space are predicting that, over time and not a long period of time, that innovation will be required so that identities, digital identities can be reused. Everything today, right? You wanna sign up for Airbnb, you gotta sign up and present your credentials and establish your identity. Then you wanna go, you know, sign up to be an Uber driver, you gotta go do that again. Then you wanna go get an Apple, you know, credit card, you wanna go do that again. Then you gotta go. You wanna open a checking account. You're following my drift here. Yep. The idea of a reusable digital identity is being able to have that established in a really secure manner where we really know that it's you, not just your device. Basically allow you to use that for establishment of identity for not just, you know, onboarding for a new account or setting up a, you know, a new relationship with a financial institution or your utility or your telco, but then also be able to passwordless authentication using that same reusable identity. That's kind of the next generation. There's all kinds of talk about self-sovereign identities. There's civic identities, where, you know, countries in Europe have come up with schemes, including the UK, you know, Italy, the Nordics. United States has talked about this. using a decentralized identity scenario, and it all starts with having an e-wallet, right, on your device. The folks at HooYu have developed an e-wallet. They've got the framework, and they've got kind of the foundation poured. We think, again, in combination with Mitek, there's a pretty interesting scenario here to show thought leadership and demonstrate that we're innovating in this area. We're pretty excited about it 'cause the future will be absolutely a portable, reusable identity. Got it. Thanks for that clarity. That will conclude today's question and answer session. I would like to hand the call back over to management for any closing remarks. This has been great. Thanks, everybody, for joining. We'd like to conclude by welcoming our new HooYu colleagues. That's great. With that, we'll bring the call to a conclusion. Thanks all. Thank you. That will conclude today's conference call. Thank you for your participation. Ladies and gentlemen, you may now disconnect.