MITEK SYSTEMS INC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations

Mitek Systems, Inc. (“Mitek,” the “Company,” “we,” “us,” and “our”) provides digital identity verification and fraud prevention solutions, which are relied upon by more than 7,000 organizations globally, including financial institutions, financial technology companies, and other digital enterprises. The Company operates inone line of business.

Summary of Significant Accounting Policies

Basis of Presentation

The accompanying condensed consolidated balance sheet as of June 30, 2026, the condensed consolidated statements of operations and comprehensive income (loss), and stockholders’ equity for the three and nine months ended June 30, 2026 and 2025, and the condensed consolidated statements of cash flows for the nine months ended June 30, 2026 and 2025 are unaudited.

These financial statements have been prepared in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X and, accordingly, they do not include all information and footnote disclosures required by accounting principles generally accepted in the U.S. (“GAAP”) for complete financial statements. The Company believes the footnotes and other disclosures made in the financial statements are adequate for a fair presentation of the results of the interim periods presented. The financial statements include all adjustments (solely of a normal recurring nature) which are, in the opinion of management, necessary to make the information presented not misleading.

These unaudited interim condensed consolidated financial statements and the accompanying notes should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2025, filed with the U.S. Securities and Exchange Commission (the “SEC”) on December 11, 2025 (the “2025 Annual Report”).

Results for the three and nine months ended June 30, 2026, are not necessarily indicative of results for any other interim period or for a full fiscal year.

Principles of Consolidation

The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.

Reclassifications

A reclassification has been made to the prior periods’ consolidated financial statements in order to conform to the current period presentation. Income tax payables were presented in the other current liabilities line and accrued liabilities were presented separately in the consolidated balance sheet as of September 30, 2025; however, income tax payables have been presented separately and accrued liabilities is now included in other current liabilities in the consolidated balance sheet as of June 30, 2026.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of certain assets, liabilities, revenue, expenses, deferred taxes, and related disclosures. On an ongoing basis, management reviews its estimates based upon currently available information. Actual results could differ materially from those estimates. These estimates include, but are not limited to, assessing the collectability of accounts receivable, estimation of the value of stock-based compensation awards, assessing for impairment of goodwill, useful lives of intangible assets, standalone selling price related to revenue recognition, estimated variable consideration in contracts, and income taxes.

Segment Reporting

Operating segments are defined as components of an enterprise for which separate financial information is evaluated regularly by the chief operating decision maker (“CODM”), in deciding how to allocate resources and assess performance. The Company’s CODM is comprised of its Chief Executive Officer, Chief Financial Officer and Chief Operating Officer.

The Company provides software and service offerings focused on fraud prevention and check verification. The Company has grown its product and service offerings through both organic development and acquisitions, which have allowed the Company to expand its offerings, presence and reach in the fraud prevention and check verification markets. While the Company has a number of product and service offerings, and operates in multiple countries, the Company has determined it hasone operating segment. This determination is based on how the CODM evaluates the Company’s financial information, allocates resources, and assesses the performance of these resources, on a consolidated basis. While there are different product and service offerings, the Company manages the development, sale, deployment, and support of its offerings in a similar manner.

The Company’s significant segment expenses are those expenses reflected in the operating income line on the condensed consolidated statements of operations and comprehensive income (loss). Other segment items include other income (expense), net and the benefit (provision) for income taxes. The Company’s measure of segment profit or loss is net income. The measure of segment assets is total consolidated assets as reported on the condensed consolidated balance sheets.

Net Income Per Share

For the three and nine months ended June 30, 2026 and 2025, the following potentially dilutive common shares were excluded from the calculation of net income per share, as they would have been antidilutive (amounts in thousands):

The calculation of basic and diluted net income per share is as follows (amounts in thousands, except per share data):

Concentrations of Significant Customers and Assets

The following table presents revenue concentration from customers accounting for over 10% of total revenue for each period presented. Two different customers accounted for over 10% of total revenue for the three and nine months ended June 30, 2026, respectively and only one customer accounted for over 10% of total revenue for the three and nine months ended June 30, 2025, as presented in each period (amounts in thousands, except percentages):

The corresponding accounts receivable balances of customers from which revenues were individually in excess of 10% of total revenue were $6.3 million and $4.8 million for two customers at June 30, 2026, and $5.7 million for one customer at June 30, 2025.

From a geographic perspective, approximately 75% and 78% of the Company’s total long-term assets as of June 30, 2026 and September 30, 2025, respectively, are associated with the Company’s international subsidiaries. Excluding goodwill and other intangible assets, approximately 16% and 17% of the Company’s total long-term assets as of June 30, 2026 and September 30, 2025, respectively, are associated with the Company’s international subsidiaries.

Recently Adopted Accounting Pronouncements

The Company did not adopt any new accounting pronouncements in the nine months ended June 30, 2026.

Change in Significant Accounting Policy

The Company’s significant accounting policies are disclosed in the Company’s audited consolidated financial statements and related notes thereto included in the Company’s 2025 Annual Report. There have been no changes to these accounting policies through June 30, 2026.

Recently Issued Accounting Pronouncements

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which amends existing income tax disclosure guidance, primarily requiring more detailed disclosure for income taxes paid and the effective tax rate reconciliation. The ASU is effective for the Company’s annual reporting period beginning after October 1, 2025, with early adoption permitted and can be applied on either a prospective or retrospective basis. The enhanced income tax disclosures will be included in the Company’s Annual Report on Form 10-K for the fiscal year ending September 30, 2026.

In November 2024, the FASB issued ASU No. 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”), which requires disaggregation of certain costs in a separate note to the financial statements, such as the amounts of employee compensation, depreciation and intangible asset amortization, included in each relevant expense caption in annual and interim consolidated financial statements. ASU 2024-03 is effective for annual periods beginning after December 15, 2026 and for interim periods beginning after December 15, 2027 on a retrospective or prospective basis, with early adoption permitted. The Company is evaluating the effect that ASU 2024-03 will have on its financial statement disclosures.

In July 2025, the FASB issued ASU No. 2025-05, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets(“ASU 2025-05”), which simplifies the forecasting process for current assets by providing a practical expedient allowing a company to assume economic conditions as of the balance sheet date will not change for the remaining life of the asset when forecasting expected credit losses on current accounts receivable and contract assets. ASU 2025-05 is effective for annual periods beginning after December 15, 2025 and for interim periods within those annual periods. The Company is evaluating the effect that ASU 2025-05 will have on its financial statement disclosures.

In September 2025, the FASB issued ASU No. 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software (“ASU 2025-06”), which improves the operability of the guidance by removing all references to software development project stages so that the guidance is neutral to different software development methods, including methods that entities may use to develop software in the future. ASU 2025-06 is effective for annual periods beginning after December 15, 2027 and for interim periods within those annual periods on a prospective, retrospective, or modified transition basis, with early adoption permitted. The Company is evaluating the effect that ASU 2025-06 will have on its financial statement disclosures.

In December 2025, the FASB issued ASU No. 2025-11, Interim Reporting (Topic 270). The ASU improves the navigability of the required interim disclosures and clarifies when the guidance is applicable, as well as provides additional guidance on what disclosures should be provided in interim reporting periods. The amendments in this ASU are effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods beginning after December 15, 2028. The Company is evaluating the impact this ASU will have on its consolidated financial statements, which is not expected to be material.

No other new accounting pronouncement issued or effective during the nine months ended June 30, 2026 had, or is expected to have, a material impact on the Company’s condensed consolidated financial statements.

2. REVENUE RECOGNITION

Nature of Goods and Services

The following is a description of principal activities from which the Company generates its revenue. Contracts with customers are evaluated on a contract-by-contract basis as contracts may include multiple types of goods and services as described below.

Software License

Software license revenue is generated from on-premise software license sales. Software is typically sold as a time-based license with a term ofone tothree years. For software license agreements that are distinct, the Company recognizes software license revenue upon delivery and after evidence of a contract exists. The Company’s standard payment terms are generally no more than 60 days. Invoices for software are typically issued when the license is made available for customer use.

SaaS, Maintenance, and Other

Software as a service (“SaaS”), maintenance, and other revenue is generated from the sale of SaaS products and services, maintenance associated with the sale of on-premise software licenses, and consulting and professional services. The Company’s SaaS products give customers the option to be charged upon their incurred usage in arrears (“Pay as You Go”), subscribe for access over a contracted period, or commit to a minimum spend over their contracted period, with the ability to purchase additional transactions above the minimum during the contract term. Revenue related to Pay as You Go contracts is generally recognized based on the customer’s actual usage in the period of usage. For contracts which include a minimum commitment, the Company has stand-ready obligation to provide the services throughout the contract term, and revenue is primarily recognized on a ratable basis over the contract period including an estimate of usage above the minimum commitment. Usage above minimum commitment is estimated by looking at historical usage, expected volume, and other factors to project usage for the remainder of the contract term. The estimated usage-based revenues are constrained to the amount the Company expects to be entitled to receive in exchange for providing access to its platform. Maintenance and support services generally call for the Company to provide software updates and technical support to customers and is recognized ratably over the term of the contract as the services are delivered. If professional services are deemed to be distinct, revenue is recognized as services are performed. The Company does not view the signing of the contract or the provision of initial setup services as discrete earnings events that are distinct. The Company’s standard payment terms are generally no more than 60 days. SaaS (other than Pay as You Go) and maintenance services are typically invoiced annually in advance, and consulting and professional services are typically invoiced at the time of sale.

Significant Judgments in Application of the Guidance

The significant judgments applied in recognizing revenue, including the identification of performance obligations, determination and allocation of transaction price, and estimation of variable consideration, are described in Note 2 to the consolidated financial statements included in the Company’s 2025 Annual Report. There have been no changes to these judgments or the methods used to apply them during the nine months ended June 30, 2026.

Disaggregation of Revenue

The following table presents the Company's revenue disaggregated by major product category (amounts in thousands):

Software license is included within Software License revenue on the condensed consolidated statements of operations and comprehensive income (loss) for all periods presented. SaaS, software license support, and professional services and other are included within SaaS, maintenance, and other on the condensed consolidated statements of operations and comprehensive income (loss) for all periods presented.

Total Revenue by Geographic Location

Revenues by geography are determined based on the region of the Company's contracting entity, which may be different from the region of the customer. The United States and the United Kingdom were the only countries that accounted for more than 10% of the Company’s revenue in the three and nine months ended June 30, 2026 and 2025. Revenue for the three and nine months ended June 30, 2026 and 2025 were as follows (amounts in thousands):

Contract Balances

The following table provides information about accounts receivable, contract assets and contract liabilities from contracts with customers (amounts in thousands):

Contract assets primarily result from when transfer of control occurs but the right to receive consideration is conditional upon factors other than the passage of time. Contract liabilities primarily relate to advance consideration received from customers (deferred revenue), for which transfer of control occurs, and therefore revenue is recognized, as services are provided. Contract balances are reported in a net contract asset or liability position on a contract-by-contract basis at the end of each reporting period. The Company recognized $4.6 million and $3.6 million of revenue during the three months ended June 30, 2026, and 2025, respectively, and $27.2 million and $19.9 million of revenue during the nine months ended June 30, 2026 and 2025, respectively, which was included in the contract liability balance at the beginning of each such period. The Company maintained an allowance for credit losses of $1.2 million and $2.8 million as of June 30, 2026 and September 30, 2025, respectively.

Transaction Price Allocated to the Remaining Performance Obligation

Remaining performance obligation represents contracted revenue that has not yet been recognized and will be recognized as revenue in future periods as those performance obligations are satisfied. Remaining performance obligation is influenced by several factors, including the timing of renewals, the timing of software license deliveries, average contract terms and foreign currency exchange rates. Remaining performance obligations denominated in foreign currencies are revalued each period based on the period end exchange rates. Remaining performance obligation is subject to future economic risks, including bankruptcies, regulatory changes and other market factors. The majority of the non-current remaining performance obligation is expected to be recognized in the next 13-36 months.

Remaining performance obligation consisted of the following as of June 30, 2026 (amounts in thousands):

Contract Origination Costs

Contract origination costs included in other current and non-current assets on the condensed consolidated balance sheets totaled $18.6 million and $4.0 million as of June 30, 2026 and September 30, 2025, respectively. Contract origination costs consist primarily of: (1) sales commissions and incentive payments made to the Company’s direct and indirect sales personnel, and (2) the associated payroll taxes and fringe benefit costs associated with these payments to the Company’s employees. Contract origination costs are amortized based on the transfer of goods or services to which the asset relates, including consideration of the expected customer benefit period. Contract fulfillment costs related to goods or services transferred under a specific anticipated contract have historically been immaterial. Amortization of contract origination costs is included in selling and marketing expenses in the condensed consolidated statement of operations and comprehensive income (loss) and totaled $0.9 million and $0.5 million during the three months ended June 30, 2026 and 2025, respectively, and $2.2 million and $1.4 million during the nine months ended June 30, 2026 and 2025, respectively. There wereno impairment losses recognized during both the nine months ended June 30, 2026 and 2025 related to capitalized contract costs.

3. INVESTMENTS

The following tables summarize investments by type of security as of June 30, 2026 and September 30, 2025(amounts in thousands):

All of the Company’s investments are designated as available-for-sale debt securities. The Company has evaluated its available-for-sale debt securities in an unrealized loss position and has concluded that the unrealized losses are attributable to factors other than credit deterioration, such as changes in interest rates, and are not other-than-temporary. Accordingly, no allowance for credit losses was recorded as of June 30, 2026 or September 30, 2025. As of June 30, 2026 and September 30, 2025, the Company’s short-term investments have maturity dates of less than one year from the balance sheet date and the Company’s long-term investments have maturity dates of greater than one year from the balance sheet date.

The following table summarizes the contractual maturities of the available-for-sale securities as of June 30, 2026(amounts in thousands):

Interest income from available-for sale securities was $0.1 million and $0.8 million for the three months ended June 30, 2026 and 2025, respectively, and $1.1 million and $2.4 million for the nine months ended June 30, 2026 and 2025, respectively, and is included in other income, net in the condensed consolidated statements of operations and comprehensive income (loss).

4. FAIR VALUE MEASUREMENT

The Company uses a three-tier fair value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value:

•Level 1: Valuation is based on quoted prices (unadjusted) in active markets for identical assets or liabilities.

•Level 2: Valuation is based on observable market-based inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

•Level 3: Valuation is based on significant unobservable inputs which are supported by little or no market activity.

The following tables represent the fair value hierarchy of the Company’s investments as of June 30, 2026 and September 30, 2025, respectively(amounts in thousands):

5. GOODWILL AND INTANGIBLE ASSETS

Goodwill

The Company had a goodwill balance of $131.3 million at June 30, 2026, representing the excess of costs over fair value of assets of businesses acquired. The following table summarizes changes in the balance of goodwill during the nine months ended June 30, 2026(amounts shown in thousands):

There wereno impairment losses recognized related to goodwill in the nine months ended June 30, 2026 or 2025.

Intangible Assets

Intangible assets include the value assigned to purchased completed technology, customer relationships, trade names and covenants not to compete. The estimated useful lives for all of these intangible assets range from three toseven years and they are amortized on a straight-line basis. Intangible assets as of June 30, 2026 and September 30, 2025, respectively, are summarized as follows(amounts in thousands, except for years):

Amortization expense related to acquired intangible assets was $3.3 million and $3.6 million during the three months ended June 30, 2026 and 2025, respectively, and $9.9 million and $10.8 million during the nine months ended June 30, 2026 and 2025, respectively. During the nine months ended June 30, 2026, foreign exchange translation decreased the cost basis for intangible assets by $1.1 million. Amortization expense related to acquired intangible assets is recorded within amortization of acquired intangibles and acquisition-related costs on the condensed consolidated statements of operations and comprehensive income (loss). There wereno impairment losses recognized related to intangible assets in the nine months ended June 30, 2026 or 2025.

The estimated future amortization expense related to acquired intangible assets is expected to be as follows(amounts in thousands):

6. STOCKHOLDERS’ EQUITY

Stock-Based Compensation Expense

The following table summarizes stock-based compensation expense related to restricted stock units (“RSUs”), performance-based restricted stock unit awards (“Performance RSUs”), stock options, and Employee Stock Purchase Plan (“ESPP”) shares, which was allocated as follows(amounts in thousands):

As of June 30, 2026, the Company had $38.5 million of unrecognized compensation expense expected to be recognized over a weighted-average period of approximately 2.4 years.

2020 Incentive Plan

In January 2020, the Company’s Board of Directors (the “Board”) adopted the Mitek Systems, Inc. 2020 Incentive Plan (the “2020 Plan”) upon the recommendation of the Compensation Committee of the Board. On March 4, 2020, the Company’s stockholders approved the 2020 Plan. The total number of shares of Common Stock reserved for issuance under the 2020 Plan is 9,608,000 shares plus such number of shares, not to exceed 107,903, as remained available for issuance under the 2002 Stock Option

Plan, 2006 Stock Option Plan, 2010 Stock Option Plan, and 2012 Incentive Plan (collectively, the “Prior Plans”) as of January 17, 2020, plus any shares underlying awards under the Prior Plans that are terminated, forfeited, cancelled, expire unexercised or are settled in cash after January 17, 2020. As of June 30, 2026, (i)3,004,261 RSUs and 1,427,530 Performance RSUs were outstanding under the A&R 2020 Plan (as defined below), and (ii)4,664,777 shares of Common Stock were reserved for future grants under the A&R 2020 Plan. There wereno stock options or RSUs outstanding under the Prior Plans as of June 30, 2026.

At each of the 2023 Annual Meeting of Stockholders and the 2026 Annual Meeting of Stockholders, the Company’s stockholders approved an amendment and restatement of the 2020 Plan to increase the number of shares authorized for issuance thereunder by 5,108,000 shares and 4,100,000 shares, respectively (the 2020 Plan as so amended and restated, the “A&R 2020 Plan”).

Employee Stock Purchase Plan

In January 2018, the Board adopted the Employee Stock Purchase Plan (the “ESPP”). On March 7, 2018, the Company’s stockholders approved the ESPP. At the 2026 Annual Meeting of Stockholders, the Company’s stockholders approved the Amended and Restated Employee Stock Purchase Plan, which increased the number of shares authorized for issuance thereunder by 1,000,000 shares. As a result, the total number of shares of Common Stock reserved for issuance thereunder is 2,000,000 shares. As of June 30, 2026, (i)1,085,834 shares have been issued to participants pursuant to the ESPP and (ii)914,166 shares of Common Stock were reserved for future purchases under the ESPP.

The ESPP enables eligible employees to purchase shares of Common Stock at a discount from the market price through payroll deductions, subject to certain limitations. Eligible employees may elect to participate in the ESPP only during an open enrollment period. The offering period immediately follows the open enrollment window, at which time ESPP contributions are withheld from the participant's regular paycheck. The ESPP provides for a 15% discount on the market value of the stock at the lower of the grant date price (first day of the offering period) and the purchase date price (last day of the offering period). Stock-based compensation expense related to the ESPP wasimmaterial in each of the three and nine months ended June 30, 2026 and 2025.

Director Restricted Stock Unit Plan

In January 2011, the Board adopted the Mitek Systems, Inc. Director Restricted Stock Unit Plan, as amended and restated (the “Director Plan”). On March 10, 2017, the Company’s stockholders approved an amendment to the Director Plan to increase the number of shares of Common Stock available for future grants. The Director Plan expired on December 31, 2022. As of June 30, 2026,56,443 RSUs were vested but not issued under the Director Plan.

Inducement Grants

As of June 30, 2026 (i)230,715 RSUs and (ii)788,250 Performance RSUs were outstanding related to equity granted pursuant to inducement grants.

Stock Options

The following table summarizes stock option activity under the Company’s equity plans during the nine months ended June 30, 2026:

The Company did not recognize any stock-based compensation expense related to outstanding stock options during each of the nine months ended June 30, 2026 and 2025. As of June 30, 2026, the Company hadno unrecognized compensation expense related to outstanding stock options.

Aggregate intrinsic value represents the value of the Company’s closing stock price on the last trading day of the fiscal period in excess of the weighted-average exercise price, multiplied by the number of options outstanding and exercisable. There wereno options granted during either of the nine months ended June 30, 2026 or 2025.

Restricted Stock Units

The following table summarizes RSU activity under the Company’s equity plans during the nine months ended June 30, 2026:

The cost of RSUs is determined using the fair value of Common Stock on the award date and the compensation expense is recognized ratably over the vesting period. The Company recognized $2.5 million and $2.6 million in stock-based compensation expense related to outstanding RSUs during the three months ended June 30, 2026 and 2025, respectively. The Company recognized $6.7 million and $8.3 million in stock-based compensation expense related to outstanding RSUs during the nine months ended June 30, 2026 and 2025, respectively. As of June 30, 2026, the Company had $22.9 million of unrecognized compensation expense related to outstanding RSUs expected to be recognized over a weighted-average period of approximately 2.7 years.

Performance Restricted Stock Units

The following table summarizes Performance RSU activity under the Company’s equity plans during the nine months ended June 30, 2026:

The cost of Performance RSUs is determined using a Monte Carlo simulation to estimate the fair value on the grant date, and the compensation expense is recognized ratably over the vesting period. The Company recognized $2.2 million and $1.7 million in stock-based compensation expense related to outstanding Performance RSUs during the three months ended June 30, 2026 and 2025, respectively. The Company recognized $5.3 million and $4.6 million in stock-based compensation expense related to outstanding Performance RSUs during the nine months ended June 30, 2026 and 2025, respectively. As of June 30, 2026, the Company had $15.6 million of unrecognized compensation expense related to outstanding Performance RSUs expected to be recognized over a weighted-average period of approximately 1.9 years.

Share Repurchase Program

On May 13, 2024, the Board authorized and approved a share repurchase program for up to $50.0 million of the currently outstanding shares of our Common Stock, which was effective as of May 16, 2024 and expired on May 16, 2026 (“2024 Share Repurchase Program”). On February 5, 2026, the Company announced that the Board of Directors had authorized an additional program to repurchase up to $50 million of the then outstanding shares of our Common Stock, which became effective on May 16, 2026 upon the completion of the 2024 Share Repurchase Program and will remain effective for a period of up to two years (“2026 Share Repurchase Program”). The timing, price and actual number of shares of Common Stock repurchased will depend on a variety of factors including price, market conditions, and corporate and regulatory requirements. The repurchases may be made from time to time (i) through open market purchases, block trades, privately negotiated transactions, one or more trading plans adopted in accordance with Rule 10b5-1 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or any combination of the foregoing, in each case in accordance with applicable laws, rules and regulations; or (ii) in such other manner as will comply with the provisions of the Exchange Act. The share repurchase programs do not require the Company to repurchase shares of its Common Stock and it may be discontinued, suspended or amended at any time.

The Company made purchases of $2.0 million, or 123,956 shares, during the three months ended June 30, 2026 at an average price of $16.31 per share and subsequently retired the shares in July 2026. The Company made purchases of $19.8 million, or 1,962,527 shares, during the nine months ended June 30, 2026 at an average price of $10.09 per share and subsequently retired the shares, including the shares retired in July. The Company made no purchases during the three months ended June 30, 2025. The

Company made purchases of $3.3 million, or 369,978 shares, during the nine months ended June 30, 2025 at an average price of $8.99 per share and subsequently retired the shares.

Accumulated Other Comprehensive Income (Loss)

Accumulated other comprehensive income (loss) is recorded in the stockholders’ equity section of our consolidated balance sheets and is excluded from net income (loss). Accumulated other comprehensive income (loss) consists of unrealized gains and losses on marketable debt securities classified as available-for-sale and foreign currency translation adjustments for the Company’s subsidiaries with functional currencies other than the U.S. dollar.

The following table shows the components of accumulated other comprehensive income (loss), net of income taxes, as of June 30, 2026 and September 30, 2025(amounts in thousands):

7. INCOME TAXES

The Company’s tax provision for interim periods is determined using an estimate of the annual effective tax rate, adjusted for discrete items arising in that quarter. In each quarter, management updates the estimate of the annual effective tax rate, and any changes are recorded in a cumulative adjustment in that quarter. The quarterly tax provision and quarterly estimate of the annual effective tax rate are subject to significant volatility due to several factors, including management’s ability to accurately predict the portion of income (loss) before income taxes in multiple jurisdictions, the tax effects of our stock-based compensation awards, and the effects of acquisitions and the integration of those acquisitions.

For the three and nine months ended June 30, 2026, the Company recorded an income tax provision of $2.8 million and $7.6 million, respectively, which yielded an effective tax rate of 25% and 27%, respectively. For the three and nine months ended June 30, 2025, the Company recorded an income tax provision of $0.7 million and $1.4 million, respectively, which yielded an effective tax rate of 24% and 16%, respectively. The difference between the U.S. federal statutory tax rate and the Company’s effective tax rate for the three and nine months ended June 30, 2026 was primarily due to a mix of worldwide income, the impact of non-deductible executive compensation, as well as the impact of the global intangible low-taxed income inclusion and federal, state and foreign research and development credits on the tax provision. The difference between the U.S. federal statutory tax rate and the Company’s effective tax rate for the three and nine months ended June 30, 2025 was primarily due to a mix of worldwide income, the impact of non-deductible executive compensation, release of valuation allowances relating to one of the Company's operations in a foreign jurisdiction, as well as the impact of stock-based compensation, and federal, state and foreign research and development credits on the tax provision.

On July 4, 2025, President Trump signed into law the One, Big, Beautiful Bill Act (the “Act”). Within the Act, there were significant tax law changes with various effective dates. The tax law changes within the Act include those related to the timing of certain tax deductions including depreciation expense, R&D expenditures and interest expense. The Company implemented the tax law changes in the fourth quarter of fiscal 2025 and, while there was no impact to its overall tax expense, the allocation between current and deferred tax expense will be impacted in the future.

8. DEBT

The carrying values of the Company’s debt as of June 30, 2026 and September 30, 2025 are as follows (amounts in thousands):

Convertible Senior Notes

In February 2021, the Company issued an aggregate principal amount of $155.3 million in 0.75% convertible senior notes due February 1, 2026 (“2026 Notes”). The Company repaid the 2026 Notes in full in the second quarter of fiscal 2026.

Amended Credit Agreement - Revolving Credit Line and Term Loan

On May 7, 2025, the Company, together with its subsidiaries, A2iA Corp. and ID R&D, Inc., (the “Borrowers”), entered into the First Amendment to Loan and Security Agreement (the “Amendment”), amending the Credit Agreement, and as amended by the Amendment (the “Amended Credit Agreement”), by and among the Company and Silicon Valley Bank (the “Bank”).

The Amended Credit Agreement provides for, among other things, (i) the establishment of a delayed draw term loan (the “Term Loan”) in an aggregate principal amount of up to $75.0 million that may be drawn prior to February 28, 2026 for the sole purpose of paying amounts outstanding under the 2026 Notes due February 1, 2026 and customary fees and expenses in connection therewith, and (ii) a revolving line of credit (the “Revolving Line”) whereby the Company may borrow up to $25.0 million with an additional $15.0 million to be advanced under the Revolving Line at the sole discretion of the Bank. On January 21, 2026, the Company borrowed $50.0 million under its Term Loan. The Term Loan and Revolving Line are secured on a first priority basis by the Company’s assets.

In connection with the Amended Credit Agreement, the Company incurred issuance costs of $0.2 million, which were recorded to Other income (expense), net in the condensed consolidated statement of operations and comprehensive income (loss). The Term Loan and the Revolving Line both mature on May 1, 2030. Commencing on April 1, 2026, the Company must make amortization payments on any advances under the Term Loan at the percentages set forth in the Amendment.

Borrowings under the Amended Credit Agreement generally bear interest at a variable rate equal to (a) term SOFR plus a specified margin, or (b) WSJ prime plus a specified margin, in each case which will be adjusted based on the Company’s net leverage ratio at the time of borrowing. Borrowers must also pay the Bank (i) a commitment fee of $125,000 and (ii) an “Unused Revolving Line Facility Fee” of 0.25% per annum of the average unused portion of the Revolving Line. The Term Loan carrying value approximates fair value and is valued using Level 2 inputs within the fair value hierarchy, as defined in Note 4 “Fair Value Measurements”.

The Amended Credit Agreement contains representations, warranties, and negative and affirmative covenants customary for transactions of this type. These include covenants limiting the ability of the Borrowers and any of their subsidiaries, subject to certain exceptions and baskets, to, among other things, (i) incur indebtedness, (ii) incur liens on their assets, (iii) enter into any merger or consolidation with, or acquire all or substantially all of the equity or property of, another person, (iv) dispose of any of their business or property, (v) make or permit any payment on subordinated debt, or (vi) pay any dividend, make any other distribution, or redeem any equity.

The Amended Credit Agreement contains customary events of default and also provides that an event of default includes any default resulting in a right by third parties to accelerate maturity of indebtedness in excess of $500,000. If any event of default occurs and is not cured within applicable grace periods set forth in the Amended Credit Agreement or waived, all loans and other obligations could become due and immediately payable and the facility could be terminated. In addition, Borrower may be required to deposit cash with the Bank in an amount equal to 1.05 of any undrawn letters of credit denominated in U.S. Dollars or 1.15 of any undrawn letters of credit denominated in a foreign currency.

The Amended Credit Agreement requires the Company to maintain a net leverage ratio of no more than 2.50 to 1.00 and if the Company consummates a permitted acquisition during the trailing twelve-month period, the net leverage ratio may not exceed 2.75 to 1.00. As of June 30, 2026, the Company was in compliance with the net leverage ratio covenant of the Amended Credit Agreement. There is $49.4 million in outstanding borrowings under the Amended Credit Agreement as of June 30, 2026.

The following table presents the total amount of interest cost recognized relating to the Term Loan and 2026 Notes (amounts in thousands):

The derived effective interest rate on the 2026 Notes was determined to be 6.71%, which remained unchanged from the date of issuance through repayment. The derived effective interest rate on the Amended Credit Agreement was determined to be 4.16% for the nine months ended June 30, 2026, with a remaining term of 3.9 years as of June 30, 2026.

Maturities of principal amounts of our Amended Credit Agreement as of June 30, 2026 were as follows (amounts in thousands):

Other Borrowings

The Company has certain loan agreements with Spanish government agencies. These agreements have repayment periods offive totwelve years and bear interest rates ranging from 0% to 3.72%. As of June 30, 2026, $4.5 million was outstanding under these agreements and $0.3 million and $4.2 million are recorded in other current liabilities and other non-current liabilities, respectively, in the condensed consolidated balance sheets. As of September 30, 2025, $4.3 million was outstanding under these agreements and approximately $0.3 million and $4.0 million are recorded in other current liabilities and other non-current liabilities, respectively, in the condensed consolidated balance sheets.

Maturities of principal amounts of our other borrowings as of June 30, 2026 were as follows (amounts in thousands):

9. COMMITMENTS AND CONTINGENCIES

Legal Proceedings

Third Party Claims Against the Company’s Customers

The Company receives indemnification demands from end-user customers who received third party patentee offers to license patents and allegations of patent infringement. Some of the offers and allegations have resulted in ongoing litigation. The Company is not a party to any such litigation. From time to time, license offers to and infringement allegations against the Company’s end-customers are made by non-practicing entities (“NPEs”)—often called “patent trolls”—and not the Company’s competitors. These NPEs may seek to extract settlements from the Company’s end-customers, resulting in new or renewed indemnification demands to the Company. At this time, the Company does not believe it is obligated to indemnify any customers or end-customers resulting from license offers or patent infringement allegations by any such NPEs. However, the Company could incur substantial costs if it is determined that it is required to indemnify any customers or end-customers in connection with these offers or allegations. Given the potential for impact to other customers and the industry, the Company actively monitors any such offers, allegations and any resulting litigation.

Since 2018, United Services Automobile Association (“USAA”) has filed suit against various parties alleging patent infringement concerning USAA-owned patents related to mobile check deposit technology. None of these lawsuits name the Company as a defendant, the Company continues to believe that its products do not infringe certain patents held by USAA and will vigorously defend the right of its end-users to use its technology.

Claim Against UrbanFT, Inc.

On December 18, 2020, the Company filed an action for breach of contract and delinquent payments against UrbanFT, Inc. (“UrbanFT”) in the Superior Court of the State of California, County of San Diego (case no. 37-2020-00046670-CU-BC-CTL), where it obtained summary judgment in the Company’s favor on April 15, 2022. On June 2, 2022, the Company obtained a judgment for its principal damages of $1.6 million. On February 23, 2023, a final judgment was entered adding the Company’s legal fees for a total of $2.3 million in compensatory damages, costs, and attorneys' fees, with the time for UrbanFT to appeal the compensatory damages having since expired. On August 2, 2023, the Company filed a separate Fraud Conveyance Action against Richard Steggall and related entities in San Diego Superior Court (Case No. 37-2023-00033005-CU-FR-CTL), alleging that Mr. Steggall orchestrated a scheme to strip UrbanFT of assets and funnel revenues through other entities to avoid the Company's collection efforts. In January 2026, the case was reassigned to a new judge, vacating the previously scheduled hearing on Mr. Steggall's summary judgment motion, and a Case Management Conference occurred in April 2026, resulting in a trial date set for July 2027.

Other Legal Matters

In addition to the foregoing, the Company is subject to various claims and legal proceedings arising in the ordinary course of its business. The Company accrues for such liabilities when it is both (i) probable that a loss has occurred, and (ii) the amount of the loss can be reasonably estimated in accordance with ASC 450, Contingencies. While any legal proceeding has an element of uncertainty, the Company believes that the disposition of such matters, in the aggregate, will not have a material effect on the Company’s financial condition or results of operations.

10. LEASES

Leases

The Company leases office and research and development facility spaces under non-cancelable operating leases for various terms through 2031. Certain lease agreements include renewal options, rent abatement periods, and rental increases throughout the term. As of June 30, 2026, the Company had operating right-of-use (“ROU”) assets of $2.0 million. As of June 30, 2026, total operating lease liabilities of $2.3 million were comprised of current lease liabilities of $0.9 million and non-current lease liabilities of $1.4 million. As of September 30, 2025, the Company had operating ROU assets of $2.6 million. As of September 30, 2025, total operating lease liabilities of $3.0 million were comprised of current lease liabilities of $0.9 million and non-current lease liabilities of $2.1 million.

The following table provides the components of lease cost recognized in the consolidated statements of operations and comprehensive income (loss) for the periods presented (amounts in thousands):

Supplemental cash flow information related to leases was as follows (amounts in thousands):

Other information related to leases as of the balance sheet dates presented was as follows:

Maturities of operating lease liabilities as of June 30, 2026 were as follows(amounts in thousands):