Mitek Snaps up Customers As Demand for Mobile Imaging Grows

Mobile-deposit and imaging software provider Mitek Systems Inc. said it doubled to 161 the number of financial-institution customers of its flagship Mobile Deposit product in its fourth fiscal 2011 quarter from 80 in the third quarter. The nation’s top five banks and seven of the top 10 now use or have signed agreements to offer the service that enables consumers to snap photos of checks with their smart phones and upload the images for deposit through their online-banking sites, Mitek reported Monday.

The San Diego-based former defense contractor also said that it had signed an agreement with Progressive Insurance as its first non-bank customer. “The fourth quarter marks our most productive quarter ever as a mobile-imaging solutions company,” chief executive James B. DeBello said during a conference call with analysts.

In addition to the customer gains, revenues for the quarter ended Sept. 30 jumped 88% to $3.04 million from $1.62 million a year earlier. For all of fiscal 2011, revenues doubled to $10.3 million from $5.12 million the prior year. Adoption of Mobile Deposit drove most of the increases.

Profits, however, didn’t make similar leaps. The company reported a quarterly net loss of $219,000 versus net income of $180,000 a year earlier. For the year, the net loss came in at $125,000, an improvement from the $682,000 loss in fiscal 2010. The losses came largely from adding personnel (13 in fiscal 2011 for a total of 33), bonus and stock-compensation expenses, and non-cash interest expenses, according to chief financial officer Russell C. Clark.

Some 35 customers are actually live with Mobile Deposit, up from 24 in the third quarter. Besides Mobile Deposit, Mitek’s products include Mobile Photo Bill Pay, which enables consumers to take pictures of bills with smart phones and pay them. DeBello said Mitek expects to see its first signed Mobile Photo Bill Pay customers by year-end, with commercial launch in 2012’s first half.

In September, the company announced Mobile Balance Transfer, which lets consumers take photos of their credit card statement and use the captured data to shop on their smart phones for cards with better terms. Also in September, Mitek announced its Enterprise Deposit Platform for financial institutions to use in managing all deposits of checks, whether via smart phones, tablet computers, home flatbed scanners, tellers, or ATMs.

Mitek is leveraging Mobile Deposit by adapting it for check cashing, prepaid card top-ups, and business-to-business check payments, according to DeBello. Meanwhile, DeBello said he could not reveal which of Mitek’s products Progressive Insurance would use, but Mitek expects the insurer to announce details in the coming weeks.

Mitek will expand its sales force in the upcoming fiscal year and continue to develop the non-bank customer market, DeBello said. Although the company posted net losses in the fourth quarter and fiscal year, it completed a $15 million private placement of equity in May and has no debt.