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STOCKHOLDERS’ EQUITY
 6 Months Ended
Mar. 31, 2024
Equity [Abstract]  
STOCKHOLDERS’ EQUITY
5. STOCKHOLDERS’ EQUITY
Stock-Based Compensation Expense
The following table summarizes stock-based compensation expense related to restricted stock units (“RSUs”), stock options, and Employee Stock Purchase Plan (“ESPP”) shares, which was allocated as follows (amounts in thousands):
Three Months Ended March 31,Six Months Ended March 31,
 2024202320242023
Cost of revenue$124 $66 $253 $192 
Selling and marketing940 1,047 1,761 1,538 
Research and development1,366 899 2,407 1,453 
General and administrative1,458 692 2,897 1,963 
Stock-based compensation expense included in expenses
$3,888 $2,704 $7,318 $5,146 
As of March 31, 2024, the Company had $31.7 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 4,500,000 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 March 31, 2024, (i) 2,448,032 RSUs and 1,256,663 performance-based restricted stock unit awards (“Performance RSUs”) were outstanding under the 2020 Plan, (ii) 4,345,217 shares of Common Stock were reserved for future grants under the 2020 Plan, and (iii) stock options to purchase an aggregate of 267,456 shares of Common Stock and 8,850 RSUs were outstanding under the Prior Plans.
On October 2, 2023, the Company held an annual meeting of its stockholders (the “Annual Meeting”). At the Annual Meeting, 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 (the 2020 Plan as so amended and restated, the “A&R 2020 Plan”).
The A&R 2020 Plan had been previously approved, subject to stockholder approval, by the Company’s Board of Directors (the “Board”), upon recommendation of the Compensation Committee of the Board, on August 9, 2023. A summary of the A&R 2020 Plan was included in the Company’s definitive proxy statement for the Annual Meeting filed with the U.S. Securities and Exchange Commission on August 22, 2023, as supplemented and amended on September 19, 2023 (the “Proxy Statement”).
Employee Stock Purchase Plan
In January 2018, the Board adopted the ESPP. On March 7, 2018, the Company’s stockholders approved the ESPP. The total number of shares of Common Stock reserved for issuance thereunder is 1,000,000 shares. As of March 31, 2024, (i) 729,124 shares have been issued to participants pursuant to the ESPP and (ii) 270,876 shares of Common Stock were reserved for future purchases under the ESPP. The Company commenced the initial offering period on April 2, 2018.
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 was immaterial in each of the three months ended March 31, 2024 and 2023. The Company recognized $41,000 and $0.1 million in stock-based compensation expense related to the ESPP in the six months ended March 31, 2024 and 2023, respectively.
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 total number of shares of Common Stock reserved for issuance thereunder is 1,500,000 shares. The Director Plan expired on December 31, 2022. As of March 31, 2024, (i) 177,054 RSUs were outstanding under the Director Plan and (ii) no shares of Common Stock were reserved for future grants under the Director Plan.
Stock Options
The following table summarizes stock option activity under the Company’s equity plans during the six months ended March 31, 2024:
Number of
Shares
Weighted-Average
Exercise Price
Weighted-Average
Remaining
Contractual Term
(in years)
Aggregate Intrinsic Value
(in thousands)
Outstanding at September 30, 2023651,269 $7.37 3.6$2,185 
Granted— $— 
Exercised(166,634)$6.25 833 
Canceled— $— 
Outstanding at March 31, 2024484,635 $7.75 4.21,440 
Vested and Expected to Vest at March 31, 2024484,635 $7.75 4.21,440 
Exercisable at March 31, 2024484,635 $7.75 4.21,440 
Stock-based compensation expense related to outstanding stock options was immaterial during each of the three and six months ended March 31, 2024 and 2023. As of March 31, 2024, the Company had no 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 were no options granted during either of the six months ended March 31, 2024 or 2023.
Restricted Stock Units
The following table summarizes RSU activity under the Company’s equity plans during the six months ended March 31, 2024:
 
Number of
Shares
Weighted-Average
Fair Market Value
Per Share
Outstanding at September 30, 20232,188,296 $11.49 
Granted1,136,418 11.24 
Settled(534,146)10.98 
Canceled(116,632)11.73 
Outstanding at March 31, 20242,673,936 11.47 
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 $2.6 million and $1.9 million in stock-based compensation expense related to outstanding RSUs during the three months ended March 31, 2024 and 2023, respectively. The Company recognized $4.9 million and $3.5 million in stock-based compensation expense related to outstanding RSUs during the six months ended March 31, 2024 and 2023, respectively. As of March 31, 2024, the Company had $23.3 million of unrecognized compensation expense related to outstanding RSUs expected to be recognized over a weighted-average period of approximately 2.6 years.
Performance Restricted Stock Units
The following table summarizes Performance RSU activity under the Company’s equity plans during the six months ended March 31, 2024:
 
Number of
Shares
Weighted-Average
Fair Market Value
Per Share
Outstanding at September 30, 2023730,393 $13.37 
Granted778,232 11.05 
Settled(187,454)11.23 
Canceled(64,508)13.64 
Outstanding at March 31, 20241,256,663 12.24 
The cost of Performance RSUs is determined using a Monte Carlo simulation to estimate the fair value on the award date, and the compensation expense is recognized ratably over the vesting period. The Company recognized $1.3 million and $0.7 million in stock-based compensation expense related to outstanding Performance RSUs during the three months ended March 31, 2024 and 2023, respectively. The Company recognized $2.3 million and $1.4 million during the six months ended March 31, 2024 and 2023, respectively. As of March 31, 2024, the Company had $8.3 million of unrecognized compensation expense related to outstanding RSUs expected to be recognized over a weighted-average period of approximately 2.0 years.