Mitek Systems, Inc.

Mitek reported Q2 fiscal 2026 revenue of $54.8 million, up 6% year over year. Fraud and Identity revenue grew 28% year over year, check verification revenue declined 8% on renewal timing, SaaS revenue grew 18%, gross profit was $46.6 million, gross margin was 85% (down about 270 basis points year over year), adjusted EBITDA was a record $22.3 million with a margin of about 41%, and adjusted diluted EPS was $0.38. Free cash flow was negative $2.5 million in the quarter, while trailing 12-month free cash flow was about $45 million, or roughly 72% conversion of adjusted EBITDA. For FY26, management raised revenue guidance to $189 million-$198 million, Fraud and Identity revenue guidance to $103 million-$108 million, Q3 revenue guidance to $49 million-$53 million, and adjusted EBITDA margin guidance to 30%-33%; it also said Q4 revenue should be $41 million-$46 million and gross margin should remain in the low 80s for the rest of the year.

Ed West framed the quarter as evidence that Mitek’s “Unify and Grow” strategy is working, with stronger demand, more customer expansion, and a better revenue mix. He emphasized that AI is making fraud cheaper, faster, and more scalable, which increases the need for layered verification, biometrics, and network-driven intelligence. His tone was confident and constructive, highlighting deeper customer commitments, more partner-led expansion, and broader relevance beyond financial services.

Dave Lyle focused on the record top-line and profitability, noting $54.8 million of revenue, $46.6 million of gross profit, 85% gross margin, $22.3 million of adjusted EBITDA, and $0.38 of adjusted EPS. He explained the 270-basis-point gross margin decline mainly came from mix shift toward SaaS/services and costs tied to early-stage pilots, while CFD SaaS margins expanded after a storage re-architecture reduced compute costs. He also highlighted a stronger balance sheet after retiring $155 million of convertible notes, drawing $50 million on the term loan, ending with $78 million of cash and investments, $54.5 million of debt, and a net cash position of $23.1 million, plus $8 million of share repurchases.

Analysts focused on how GenAI fraud is changing customer urgency, whether Fraud and Identity can become more profitable, and whether growth is coming more from upsells or new logos. Management said demand and outreach have increased as attacks have become more sophisticated, and that adoption is broad but increasingly driven by existing customers expanding across geographies, workflows, and use cases. They also said the Fraud and Identity segment’s economics should improve over time through scale and better unit economics, but they did not provide a specific profitability target for that segment.