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Mitek Systems (MITK): analysis traps
Where its figures could mislead a reader, and what to check before taking them at face value · Data: Q3 FY26, to Jun 30, 2026, filed Aug 6, 2026; rules v1.1
Mitek Systems (MITK): 3 rules of 10 triggered on the filings to Jun 30, 2026: stock compensation added back = no economic cost; FCF growth = the business improved; 3 with insufficient data; 2 not applicable. Each is a question to verify, with the normal explanation that would produce the same figures.
Check these first
Stock compensation added back = no economic cost Triggered · severity medium · confidence high
Stock compensation was $17M, 9.4% of revenue, in FY25; buybacks were $5M (0.3× the SBC) and buybacks did not cover it. 'Adjusted' figures that add SBC back treat pay in shares as free; the cost is borne by every shareholder as dilution, or by the cash spent to buy the shares back.
Innocent reading: A young company paying in equity while it scales; intensity falls as revenue grows.
FCF growth = the business improved Triggered · severity medium · confidence medium
Free cash flow rose $24M (+79%), from $30M to $54M, but working capital released $12M more cash than the year before and capital expenditure fell by $283K: 51% of the increase came from sources that need not repeat. Operating cash flow before working capital rose by $12M.
Innocent reading: An expansion programme finished, so capex fell back to maintenance levels for good.
Every rule
A01 FCF growth = the business improved Triggered severity medium · confidence medium
Free cash flow rose $24M (+79%), from $30M to $54M, but working capital released $12M more cash than the year before and capital expenditure fell by $283K: 51% of the increase came from sources that need not repeat. Operating cash flow before working capital rose by $12M.
The figures and how they are read
| Fiscal year before | FY24 |
| Fiscal year | FY25 |
| Operating cash flow, year before | $32M |
| Operating cash flow | $55M |
| Capex, year before | $1M |
| Capex | $1M |
| Free cash flow, year before | $30M |
| Free cash flow | $54M |
| Change in FCF | $24M |
| Change in capex | −$283K |
| Working capital: change in its cash contribution | $12M |
| Of which: capex cut | $283K |
| Of which: working capital released | $12M |
| Share of the increase that need not repeat | +51.0% |
| Operating cash flow before working capital: change | 11718000.00 |
FCF = operating cash flow − cash capex; ΔFCF = ΔOCF − ΔCapEx; the working-capital part is the change in the cash-bridge items (receivables, inventory, payables, accruals), with the sign of the cash flow statement
Source: FY25 (cash flow statement, fiscal year) · FY24 (cash flow statement, fiscal year before)
What would explain it innocently
- An expansion programme finished, so capex fell back to maintenance levels for good
- Suppliers agreed longer payment terms in a contract
- Inventory was brought down after a glut and will stay down
What to look for in the filing
- Maintenance capex (what it costs to keep the assets working)
- Supplier payment terms and any supply-chain financing
- Management's capex guidance for next year
What would show the trap does not apply
- Next year's FCF holds or rises with capex back at its earlier level and working capital no longer releasing cash
- The 10-K's capex guidance and the segment capex show the cut is a completed programme, not deferral
- The working-capital release matches a disclosed change in terms or a divestiture, not stretched payables or a collection push
Look again: next filing.
A07 Stock compensation added back = no economic cost Triggered severity medium · confidence high
Stock compensation was $17M, 9.4% of revenue, in FY25; buybacks were $5M (0.3× the SBC) and buybacks did not cover it. 'Adjusted' figures that add SBC back treat pay in shares as free; the cost is borne by every shareholder as dilution, or by the cash spent to buy the shares back.
The figures and how they are read
| Fiscal year | FY25 |
| Stock compensation | $17M |
| Revenue | $180M |
| SBC / revenue | +9.3% |
| Buybacks | $5M |
| Buybacks / SBC | 0.3 |
| Diluted shares, year before | 47.5M shares |
| Diluted shares | 46.9M shares |
| Diluted shares: change | -1.1% |
SBC / revenue from the cash flow statement's add-back; the diluted weighted share count year over year; buybacks from the financing section
Source: FY25 (stock compensation, buybacks and the diluted share count, fiscal year)
What would explain it innocently
- A young company paying in equity while it scales; intensity falls as revenue grows
- Buybacks at prices below intrinsic value make up for the dilution over time
- A one-off grant (an acquisition, a founder award) rather than a steady level
What to look for in the filing
- The share count after the latest buybacks (the next 10-Q's cover)
- The price paid for the buybacks against the shares' value
- Unvested awards outstanding
What would show the trap does not apply
- The diluted share count falls over two years with buybacks at least equal to the stock compensation
- Stock compensation falls as a share of revenue in each of the next two years
Look again: next filing.
B02 Receivables growing = future cash is certain Triggered severity medium · confidence medium
Receivables grew 30% year over year in Q3 FY26 against revenue growth of 18%, and the quarter before 27% against 6%; days sales outstanding is 97 against a median of 78 over the eight quarters before. More of each quarter's revenue is still owed by customers.
The figures and how they are read
| Quarter | Q3 FY26 |
| Revenue, year over year | +18.2% |
| Receivables, year over year | +30.1% |
| Quarter before | Q2 FY26 |
| Revenue y/y, quarter before | +5.6% |
| Receivables y/y, quarter before | +27.0% |
| Days sales outstanding | 97.3 |
| DSO, median of eight quarters | 78.2 |
| Receivables | $52M |
| Revenue | $54M |
receivables and revenue against the same quarter a year earlier; DSO = receivables / quarterly revenue × days, against the median of the eight quarters before
Source: Q3 FY26 (receivables and revenue) · Q3 FY25 (the same quarter a year earlier)
What would explain it innocently
- Seasonality: a quarter that always ends with big shipments
- An acquisition brought its own receivables
- New business with longer standard terms (government, large enterprise)
- Currency: receivables booked in a strengthening currency
What to look for in the filing
- The receivables ageing and the allowance for credit losses
- Any factoring or receivables sold (and whether with recourse)
- Credit terms by customer group
What would show the trap does not apply
- Receivables fall back in line with revenue in the next quarter and DSO returns to its history
- The 10-Q attributes the increase to a disclosed one-off (a large customer's timing, an acquisition) and the allowance for doubtful accounts did not rise
Look again: next filing.
B08 Adjusted profit = economic profit Insufficient data
no reconciliation table read from the releases yet and fewer than three quarters with both an adjusted and a GAAP EPS
C02 Low net debt = no refinancing risk Not triggered confidence medium
$280K comes due within a year, 529.7× covered by cash and investments of $100M plus $49M of free cash flow.
The figures and how they are read
| Cash and investments | $100M |
| Debt | $49M |
| Net debt | −$50M |
| Due within a year | $280K |
| Read from | the debt maturity table |
| Free cash flow, twelve months | $49M |
| Cash plus free cash flow | $148M |
| Coverage of what is due | 529.7 |
| Due in the second year | $404K |
| Balance sheet date | 2026-06-30 |
due within a year from the maturity table (else the current portion of debt), against cash and investments plus free cash flow over the last twelve months (zero if negative); no credit lines assumed
Source: FY25 (debt maturities, cash and investments)
D03 EPS growth = profit growth Not triggered confidence high
EPS rose 237% and net income rose 249% in Q3 FY26; the share count rose 4.0%: EPS growth follows profit growth.
The figures and how they are read
| Quarter | Q3 FY26 |
| Quarter before | Q3 FY25 |
| EPS, year before | $0.05 |
| EPS | $0.17 |
| Net income, year before | $2M |
| Net income | $8M |
| Diluted shares, year before | 46.8M shares |
| Diluted shares | 48.7M shares |
| EPS growth | +237.2% |
| Net income growth | +249.2% |
| Diluted shares: change | +4.0% |
| eps from profit | $0.13 |
| eps from share count | -$0.01 |
EPS and net income against the same quarter a year earlier; the EPS bridge attributes the change to profit first, then to the share count (the order is fixed and disclosed)
Source: Q3 FY26 (net income, diluted shares, EPS) · Q3 FY25 (the same quarter a year earlier)
E02 Low P/E at a cyclical peak = undervalued Insufficient data
no market value or trailing net income in the valuation research
E07 A precise DCF value = the true value Insufficient data
no DCF in the valuation research for this company
J06 A bank's low P/E and high profit = safe Not applicable
not a bank
J08 A REIT's low net income = the dividend is unsafe Not applicable
not a REIT
What the statuses mean
Triggered: the filings show the pattern; read the normal explanations and the missing evidence before concluding anything. To review: one quarter or a weak signal; a reader's judgement, not a pattern. Not triggered: the pattern is absent on these figures. Insufficient data: the filings read so far do not hold what the rule needs; this is not a clean bill. Not applicable: the rule is not meant for this kind of company (a bank's working capital, a loss-making quarter's EPS growth). Out of date: the latest filing is more than fifteen months old.
Severity is what the pattern could mean for cash, value or solvency; confidence is how reliable the inputs and the reading are. The two are kept apart.
Record a view
A reader's judgement, grounds, what would change it and the next review; kept in the browser (needs JavaScript).
Every rule and the companies it triggers on → Mitek Systems: cash flow →
Each rule reads the company's own filings by a fixed formula and says what would explain the same figures innocently. A triggered rule is a question to verify, not a finding of manipulation, and not a view on the stock. Missing data is shown as missing, never as clear. Not investment advice.