Mitek Systems (MITK) Q3 2021 Earnings Call Transcript

Mitek Systems (MITK -2.16%)
Q3 2021 Earnings Call
Jul 29, 2021, 4:30 p.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Good day, and welcome to the Mitek Systems third-quarter fiscal 2021 financial results conference call. Today's conference is being recorded. At this time, I would like to turn the conference over to Todd Kehrli, MKR Group. Please go ahead, sir.

Todd Kehrli -- Investor Relations

Thank you, operator. Good afternoon, and welcome to Mitek's third-quarter fiscal 2021 earnings conference call. With me on today's call are Max Carnecchia, Mitek's CEO; and Frank Teruel, Mitek's CFO. Before I turn the call over to Max and Frank, I'd like to cover a few quick items.

This afternoon, Mitek issued a press release announcing its third-quarter fiscal 2021 financial results. That release is available on the company's website at miteksystems.com. This call is being broadcast live over the Internet for all interested parties, and the webcast will be archived on the investor relations page of the company's website. I want to remind everyone that on today's call, management will discuss certain factors that are likely to influence the business going forward.

Any factors discussed today that are not historical facts, particularly comments regarding our long-term prospects and market opportunities should be considered forward-looking statements. These forward-looking statements may include comments about the company's plans and expectations of future performance. Forward-looking statements are subject to a number of risks and uncertainties which could cause actual results to differ materially. We encourage all of our listeners to review our SEC filings including our most recent 10-K and 10-Q for a complete description of these risks.

Our statements on this call are made as of today, July 29, 2021, and the company undertakes no obligation to revise or update publicly any of the forward-looking statements contained herein, whether as a result of new information, future events, changes in expectations or otherwise. Additionally, throughout this call, we'll be discussing certain non-GAAP financial measures. Today's earnings release and the related current report on Form 8-K describe the differences between our non-GAAP and GAAP reporting and present the reconciliation between the two for the periods reported in the release. With that said, I'll now turn the call over to Mitek's CEO, Max.

Max Carnecchia -- Chief Executive Officer

Thanks, Todd. Good afternoon, everyone and thank you for joining us today. We have a lot of cover and I would like to focus my comments on four key areas. First, our all-time record revenue and strong financial results.

Second, the key investments we made during the quarter in people and technology. Third, providing more insight into the breadth of our growing product landscape which henceforth resulted in a doubling of our total addressable market. Before I begin, I want to take a moment to acknowledge my technicians. It has been over 16 months since we all started working remotely, and I continue to be inspired by the commitment and resilience from the global Mitek teams.

This quarter, we embraced virtual first as our workplace culture providing our global teams with more individual flexibility and alternate remote work options. Remote work is now our primary experience for all of our employees globally and the offices provide a hub for collaboration and teamwork. We have reopened our North American offices in San Diego and New York City, and the teams are taking advantage of the opportunity to meet in person. We look forward to reopening all of our offices in Europe as country specific conditions allow.

In the meantime, thank you to all Mitek teams, your response and dedication to making our customers successful, is invigorating. And because of your dedication, we had another outstanding quarter, reflecting our laser focus on providing exceptional customer value to the world's leading banks, fintechs and marketplaces. Jumping into our financial results for the quarter, our transactional identity verification revenue continued its strong performance growing 33% year over year, highlighting our leadership in this market and our deposits business grew 23% year over year, as consumer adoption of mobile deposit continued to increase. All of this resulted in record revenue of $31.8 million, up 25% year over year.

Also, we delivered non-GAAP net income of $10.6 million or $0.23 per diluted share, up 56% year over year, and cash flow from operations of $9 million. In addition to our record revenue and strong financial results, we successfully added key people and technology to Mitek during the quarter. We announced the appointment of Susan Repo to our board of directors, and Frank Teruel to our leadership team as chief financial officer. Susan is currently the chief financial officer at ICEYE, a technology company enabling access to real-time imagery from space for federal and commercial industries.

She joined Mitek's board of directors in June. Her experience in finance and operational leadership roles with MariaDB, Tesla, Juniper Networks, and Agilent Technologies will be very valuable as we accelerate growth. Frank, who is with us today on the call, joined Mitek as chief financial officer and senior vice president on July 16. Frank succeeds Jeff Davison, who announced his retirement at the end of last year.

Prior to Mitek, Frank was previously the chief operating officer of ADARA, a predictive intelligence company. Frank is a well-recognized thought leader in digital identity and fraud management having led ThreatMetrix as its general manager and chief financial officer. I'm thrilled to welcome both Susan and Frank to the Mitek team. During the quarter, we also added key technology and talent with the acquisition of ID R&D, an award winning provider of AI-based voice and face biometrics and liveness detection.

Their pioneering technologies in combination with Mitek's solutions provide increased protection against today's most sophisticated fraud threats, such as deep fakes and synthetic voice augmentation. Together we deliver on the promise of password-less access and imperceptible continuous authentication throughout the customer life cycle. ID R&D's multi-modal approach to identity authentication directly addresses these threats by combining passive facial liveness and voice anti-spoofing technologies, accurately identifying and preventing advanced AI-based deceptions to ensure each transaction is completed by a real person. Over the next 12 months, we expect to invest further in strategic acquisitions to accelerate our vision and product roadmap.

We will invest in acquisitions to add logically adjacent capabilities in areas where we see a relevant market opportunity. These acquisitions will fast-track our innovation in the fight against fraud. Our investments demonstrate continued commitment to the identity category and our determination to provide trust and convenience in this connected world. Identity verification has never been more relevant.

To quote Andras Cser from Forrester, the necessities of the pandemic have forced customers into a rapid digital revolution that requires digital identity in order to compete. Rapid advances in artificial intelligence are enabling novel forms of fraud and increased scale and frequency of data breaches, all of which is adding heightened pressure on organizations to protect their customers' data and access. Organizations no longer have the luxury to simply verify access at a point of on-boarding. Instead, they need to continuously authenticate and know exactly who their customers are across channels and throughout the entire customer life cycle.

And while identity verification is rapidly becoming an integral element of most organizations' technology stack, we believe the next decade of fraud prevention will be defined by an organization's approach for the life cycle of continuous identity and access management capabilities. With our acquisition of ID R&D, Mitek steps out ahead to lead this fight using advanced linked and layered identity signals from initial on-boarding with documents, devices and biometrics to authentication, reverification and continuous identity fraud detection. Mitek is the only enterprise class provider with this breadth of offering in the identity category, and our standards of service remain unchallenged. As a result, we continue to see customers choose Mitek.

During the quarter we gained further traction in both direct and indirect sales, bringing on more banking, wealth management, insurance, fintech, cryptocurrency, and decentralized patient care organizations. In Europe, our credibility with the world's leading banks was once again confirmed with yet another pan-European Bank, fully integrating mobile verify identity services to fight fraud. Our customers globally represent hundreds of the world's best known brands and banks, and our proven track record of success continues to grow as we expand our reach into this fast growing market. Mitek's goal is to be an indispensable partner in fighting identity fraud and the momentum we are experiencing is evidence of this.

Our pipeline of potential new customers is strong. Our existing customers are expanding. Our channel partnerships are gaining traction. And as the industry leading solution for identity verification, we are committed to maintaining product superiority and expanding our reach into this large and growing market.

We're committed to innovation and delivering products that are simple and intuitive to use while protecting organizations from the growing threat of fraud, which ties right back to our introduction of Check Fraud Defender during the quarter. Check Fraud Defender is an AI-powered, cloud-hosted consortium for financial institutions to counter-attack check fraud. Check Fraud is on the rise and financial institutions see their existing fraud detection processes generate mountains of false positives. This causes them to hire more and more people to sift through false positives in search of fraud, costing significant time and money.

Check Fraud Defender helps protect against the growing sophistication of these check fraud attacks, which are estimated to account for 60% of all fraud attempts against deposit accounts. A report by the American Bankers Association shared in January of 2020 reveals total attempted check fraud increased to $15.1 billion. The powerful new signal provided by Check Fraud Defender will enable banks to reduce fraud losses, lower false positives, and reduce operational costs. 20% of the top 25 banks have already licensed Check Fraud Defender technology and are experiencing up to 90% savings in manual review time following its initial deployment.

We're excited to see banks on-boarding to our consortium and trusting Mitek with this very sensitive competitive data. Although check volumes continue to decline, check fraud continues to be a major challenge for financial institutions in the U.S. and by automating more check fraud detection and lowering false positives that require manual review, Mitek can decrease banks operational costs as well as fraud losses. We are very excited about this new deposit's product offering that joins our already highly profitable mobile check deposits business, which continued to grow during the quarter with its revenues increasing 23% year over year.

We look forward to continued adoption of our mobile check deposit product as more and more consumers discover its ease and convenience and are very excited about the coming adoption of our new Check Fraud Defender offering. In closing, the acceleration in demand for both our identity and deposit solutions shows the central role that our products are playing in this digital economy and our record revenue demonstrates our strengthened market position in 2021 and beyond, while even more importantly, doubling our total addressable market through our new product offerings. Now, I'll turn the call over to Frank to discuss the financial results in more detail. Following Frank's remarks, we will open the call for questions.

Frank, please go ahead.

Frank Teruel -- Chief Financial Officer

Thanks, Max. And thanks everybody for joining us this afternoon. Before I go through the numbers for the quarter, I want to thank Max and the Mitek family for welcoming me with open arms. Although I've just started the company, I feel as though I've been a Mitek nation member for some time.

As Max mentioned, prior to joining Mitek, I was chief operating officer at ADARA, and before that, general manager and CFO at ThreatMetrix. I've worked in the digital identity and fraud management space for many years, and I am very excited to be part of the Mitek team, especially as we expand our role to facilitate inclusion while fighting fraud in this digital world. Mitek's recent acquisition of ID R&D and its launch of Check Fraud Defender are two great examples of Mitek's commitment to leading this charge. And the fact that major financial institutions today place their trust in Mitek with its very important sensitive imperative speaks very loudly to me.

So thank you, Max, and thank you team. So with that, let's dive into the Q3 numbers. For the third quarter of fiscal 2021, Mitek generated all-time record revenue of 31.8 million, a 25% increase year over year. Software and hardware revenue was 17 million, an increase of 28% year over year.

Service and other revenue, which includes transactional SaaS revenue, maintenance and consulting services was 14.8 million for the quarter and an increase of 21% over Q3 last year. This increase was due to growing transactional SaaS revenue, which increased 33% year over year to 10.1 million. As was mentioned on last quarter's conference call, this is the first comparable year-over-year quarter since COVID began and we're very happy with this significant growth year over year. For Q3 2021, deposits revenue increased 23% year over year to 20.8 million.

Identity and verification revenue increased 30% year over year to 11 million. We delivered strong software and hardware gross margins of 98% for the quarter. Gross margins on services and other revenue were 79% for the quarter and total gross margin for the quarter was 89% compared to 86% in Q3 of last year. Total GAAP operating expenses including cost of revenue were 26.3 million compared to 24 million in Q3 of last year.

This increase is primarily due to the investment to grow our identity business and additional costs associated with the acquisition of ID R&D. Sales and marketing expenses for the quarter were 8.1 million compared to 7 million a year ago. R&D expenses were 6.9 million compared to 5.9 million last year and our G&A expenses were 5.6 million compared to 5.9 million a year ago. GAAP net income for the quarter was 3 million or $0.07 per diluted share.

Our diluted share count was 45.2 million shares compared to 42.4 million shares a year ago. Now as a reminder, our earnings release includes a reconciliation between GAAP and non-GAAP net income. We believe non-GAAP net income provides a useful measure of the company's operating results by excluding acquisition-related costs and expenses, stock comp expense, litigation expenses, executive transition costs, amortization of debt discount and issuance costs and the related tax impact of these items. Non-GAAP net income for Q3 increased to 10.6 million or $0.23 per diluted share compared to 6.8 million or $0.16 per diluted share a year ago.

Our non-GAAP adjustments include 2.9 million of stock comp expense, 2.2 million of acquisition-related costs and expenses, 1.9 million of amortization of debt discount and issuance costs, 1.8 million in cash tax differences, $400,000 of executive transition costs, and $128,000 of litigation expenses for the quarter. This was all offset by income tax effects of pre-tax adjustments of 1.7 million. Now, turning to our balance sheet, we generated $9 million in cash flow from operations during the quarter and finished the quarter at 215.5 million in total cash and investments. Our accounts receivable balance of 18.6 million represents a DSO of 47 days.

During the third quarter, the board of directors authorized a share repurchase program for up to $15 million of Mitek's outstanding common stock, further reflecting our confidence in the Mitek business and successful execution of our multi-year growth strategy. By using our very strong balance sheet to reduce the number of outstanding common shares, we can increase shareholder value while maintaining significant cash resources to fund our operations and strategic plans. This stock repurchase program also allows us to offset the dilutive impact of the ID R&D acquisition. During the third quarter we did not buy back any shares.

Now speaking of R&D, since completed that acquisition on June 1 of 2021, its impact on our operating results for the third quarter was de minimis. In closing, we are very pleased with our results, which include all-time record revenue, as well as strong non-GAAP net income and cash flow from operations. And we look forward to reporting our continued progress in the coming quarters, as we continue to help our customers and partners accelerate their digital transformation, while at the same time fighting fraud. Thank you.

Max Carnecchia -- Chief Executive Officer

Operator, that concludes our prepared remarks. Please open the line for questions.

Questions & Answers:

Operator

[Operator instructions] Our first question comes from Bhavan Suri with William Blair.

Bhavan Suri -- William Blair & Company -- Analyst

Hey, gents. Can you hear me OK?

Max Carnecchia -- Chief Executive Officer

We sure can.

Bhavan Suri -- William Blair & Company -- Analyst

Great and congratulations. A great quarter and it was good to see sort of all of the cylinders firing there. And welcome Frank. I wanted to touch really quickly sort of on the check fraud product a little bit.

It was great to see sort of the banks adopt it. I guess I'd love to understand sort of the pricing model and sort of as you think about penetration, it makes sense that every bank would have it. So maybe talk a little about pricing and then the competitive environment and what's out there that would mean that maybe you don't get 100% penetration against what you've done with tech deposits.

Max Carnecchia -- Chief Executive Officer

Sure. Thanks. So first, Bhavan, good to hear from you. And let's just start kind of lay the foundation for Check Fraud Defender.

So this is technology that we have had and we talk about some of the adoption from some of the bigger, top 25 banks. That has been for some on-prem use where they're trying to do check fraud prevention and detection kind of with the with the check flow that they're seeing. And it's a little spotty. We've got a bank or two that have adopted very big time, over the course of the last 12 months.

And then, we've got some folks that are just starting. And that's what gave us confidence to refactor the product, basically push it up into the cloud and open this up to a consortium so that banks can basically see cross-tenant, be able to see across a network of banks, where there might be some check fraud. And so, you think about it as a signal, right, for each individual check, we're able to send a signal back to the banks in very rapid time whether that check is potentially a fraudulent check, so enough on the how. The competitive question is a good one, there are a number of tools that are out there that help banks by looking at data on a check and being able to determine if it's potentially a fraud, and that data is information about accounts and balances, and how long the account has been open.

And the way that that works today typically takes 24 to 48 hours for those services to help bank determine whether that check is a potential fraud or fake. What we're talking about is something that's going to work in much, much shorter timeframes, a matter of hours, and being able to use the optics, basically, the visual inspection of the check, so the signature and how the check is laid out, the check stock itself, how things are printed, the numbers, the CAR/LAR comparison of the written out number versus the numeric number characters on the check. And so, this is not an idea, this is not a concept, this is something that's already at minimum viable product, we've proven the market fit. And we're seeing that adoption, and now the idea of bringing it to the cloud and turning it into something near real time to be able to provide that signal to the consortium.

That's the real excitement and what we're expecting to see here really impact our business over the next two years. From a pricing perspective, the consortium model isn't fully fleshed out, but the things we have done on-prem to get the MVP and the product market fit, those have been subscriptions. And so, I think you'll see us continue to kind of expand the repertoire of business models over here and turn that into something that could be quite significant for us, a legitimate second act product in our deposits business.

Bhavan Suri -- William Blair & Company -- Analyst

Great. Great. I look forward to seeing sort of how that layers onto the deposit business because obviously, you've got some of the points, which is checks sort of going away slowly, slower than people anticipated but obviously, the growth in check fraud growing dramatically. So it'd be nice to see that play out.

Let me jump to ID verification a little bit. I'd love to understand a little about sort of how you've seen a return, or have you seen a return in demand from some of the more impacted verticals, as you did last quarter. And then, when I look at that sort of growth rate of 33%, I would love to understand where you think that is vis-a-vis the market. Is that -- it's a great growth rate.

No one should laugh at 33%. But do you think that that accelerates, you think this is a 40%, 50% growth market? Maybe talk us about the return in some of those impacted verticals and sort of what that might play out, without giving guidance, I know you're not guiding to what the growth in the business might be?

Max Carnecchia -- Chief Executive Officer

Yeah. And just as a reminder, in our last earnings call, we gave some perspective that compared to Q2 of this year because of some one-time events, it was going to be a tough comp. Last quarter, it was a 50%, the SaaS transaction revenue grew 50%. And compared to Q3 of last year, at the beginning of COVID, we had a couple of customers that just really spiked and so, on a year-on-year basis, it's a little bit of a tough comp.

I think the heart of your question, though, we're seeing most of the customers get back into a normal flow. And what we've seen in the last couple of quarters with financial services and fintech being very strong adopters of this technology, we continue to see that happen. Those one-time events that we saw in Q3 of last year, the April, May quarter when COVID just started and delivery services went through the roof and unemployment checks needed to be validated, the identity for unemployment claims, that's kind of washed its way through the system. It's hard for me to tell you, I mean, at 33% I think we're probably on the high-end of where the overall market growth is.

For the segments that we're focused on, I think that over time, we can do better than that. And, again, I don't want to guide but that's certainly how we're pushing the teams here. That's certainly what the customer demand and prospect demand is leading us to believe.

Bhavan Suri -- William Blair & Company -- Analyst

Got you. I want to delve into that a little more. You he touched a little bit in prepared comments. And you and I talked a lot about synthetic fraud, and sort of the acquisition you just made starts to address the ability.

I take a picture of my face on someone else ID, it is a picture of a picture and so I can cheat the system a little bit. And so, the acquisition sort of addresses that. But are companies understanding the value of that or is that still sort of evangelical to get sort of this, hey, I want to see that it's actually a picture of someone live and real, and not just a picture of a picture to avoid the idea of synthetic fraud. Can we talk a little bit of how that sales motion is going? And how much of that is evangelical today, especially for the new offerings, vis-a-vis sort of people totally get that, and this is going to be built in and we'll see that laying very easily.

Just kind of how are the nuances there and how's it playing out?

Max Carnecchia -- Chief Executive Officer

Yeah. So first, for folks who maybe aren't as familiar as you are Bhavan, this idea that a biometric is something that you are a DNA test, retina scan, face, voice, fingerprint, doing that at enterprise grade, right, not some consumer grade things, just on your iPhone, that's first in line. And I think that is generally accepted now in the market as being the kind of the standard of play. The point that you're bringing up, which I think is more nuanced is, OK, well, how do I ensure that that's actually alive person, when I'm checking that biometric and that liveness test is very unique to what ID R&D has invented, it is a very clever innovations of their scientists and their engineers.

Back to your point, I wouldn't call it evangelical, but I absolutely -- I sit in sales calls, I sit in these meetings, mostly through Zoom and you can watch the compliance and fraud and product managers within the financial institutions have like aha moments, when it occurs to them that they're being beat because somebody is doing a video replay or somebody -- the bad actor is basically taking a picture of a picture or somebody with a mask. And when we show them with a single image, a single frame across all the channels, iOS, Android, web, that I can detect whether that human is alive or not and do it with a payload that's a single frame, that you do see some heads explode. So I don't know if I'd call it spadework or education, but it certainly differentiated.

Bhavan Suri -- William Blair & Company -- Analyst

Great. Great. I think that was helpful. I guess a quick follow up that is, and so, as that layers in, I'd love to get -- I know, again, I am not forcing for guidance.

I'd love to get some color on how you think that impacts growth rates for the business on the ID verification side. Could it be an accelerant over time? Is it just like bundled in and be part of the feature functionality? How do we think about that laying into numbers? Thank you.

Max Carnecchia -- Chief Executive Officer

Yeah. I think on the intermediate term, we absolutely believe that we wouldn't have made the move. Again, to your point, I'm not going to provide guidance, and we've got some integration to do. I don't mean company integration, I mean, taking additional elements of their product, the voice, the voice liveness, they've now got some things in their lab around document liveness, which is very novel.

We've got to get that fully integrated in mobile verify, and that's probably going to take us a quarter or two, and then we can be selling in the market before then but then somebody has to get implemented. So it's going to take a little bit of time, but we're very bullish about what it means to our business long term.

Bhavan Suri -- William Blair & Company -- Analyst

Awesome. Thanks for taking my questions, guys. Thanks for all the color. Appreciate it.

Operator

Our next question comes from Mike Grondahl with Northland Securities.

Mike Grondahl -- Northland Securities -- Analyst

Hey, guys. Congratulations on the quarter. Did you disclose any revenue in the quarter from Check Fraud Defender, the new product?

Max Carnecchia -- Chief Executive Officer

Yeah. So we did not have -- if we did, it was de minimis. We literally have just kind of cracked the cover on this thing and made the announcement, it was the last couple of days of June, so more to come, Mike, in Q4.

Mike Grondahl -- Northland Securities -- Analyst

OK. And I was just trying to get a sense for mobile deposit, if that was clean, or if it had a little bit of new revenue layered in.

Max Carnecchia -- Chief Executive Officer

It was clean.

Mike Grondahl -- Northland Securities -- Analyst

Got it. No, that's great. Kind of staying in mobile deposit, any update on pricing? I know you've been sort of as you've been renewing some customers getting a little lift, can you kind of speak to where you're at there?

Max Carnecchia -- Chief Executive Officer

Yeah. So just as a reminder for anybody kind of new tuning in over the course the last, probably, now eight or nine quarters. We have been taking a strong stand with some of our customers, some of our reseller partners around what I would consider some poorly negotiated arrangements historically between Mitek and those entities and there's a tremendous amount of value that is delivered from mobile deposit. Not only do customers love it, just because it's easy and it's magical, but it's a huge savings to the banks themselves.

It's fractions of the cost of having a check go through a teller at a branch bank or even an ATM. And so, back to your question, we've been in the course of the last eight quarters taking a strong stand with these customers and partners and renegotiating contracts and trying to get what we think is the reasonable and fair value for -- on a per check basis for this product. And so, we continue to do that. It's a slog.

It's basically hand-to-hand combat. Every one of these -- no customer wants a price increase. No partner wants their cost of in-licensed technology to go up. But we believe this is the right thing and it's fair across the partner base, because not everybody is at the same place, so we've taken a principled approach to it.

And Mike, I don't think -- let's say we're halfway there, this is just something that we're going to have to continue to do. And we'll probably be talking about it for the next eight or nine quarters as well.

Mike Grondahl -- Northland Securities -- Analyst

Good, good. In terms of mobile ID, any new use cases, in the June quarter, just where you've seen a customer come to you with an idea and you're able to kind of execute for that customer, something you maybe hadn't seen before kind of thought of?

Max Carnecchia -- Chief Executive Officer

Yeah. I think one of the things you saw in the prepared remarks and you see us talk more and more about is this identity life cycle, right, where historically most of our customers have been using mobile verify, to do an identity proofing step, when you're opening a new account, or when there's an on-boarding journey for new account opening. And what we've seen in the course of the last five or six quarters is more and more customers are interested in doing that, and then reverifying that identity or doing some sort of account authentication after that account has been established. And so, a good example there is you sign up for a credit card with somebody and we helped that bank with the on-boarding journey there.

Now, they want to do a reverification of that identity for some sort of high dollar amount wire transfer, or some sort of high dollar amount, transfer of money out of that account. So, making this example up, but now you want to do a $50,000 or more account transfer and it turns around and asks you to take a selfie. And that way, we're making sure that it's actually you, we can compare that to some picture that's in a registry someplace, and we can do that liveness test that we were just talking about. That's a great example.

And I think those kinds of use cases of authentication, reverification, we're just seeing more and more of those and you'll see us come to market with products to specifically address that more out of the box.

Mike Grondahl -- Northland Securities -- Analyst

Got it. Congratulations again. Thank you.

Max Carnecchia -- Chief Executive Officer

Thanks, Mike.

Operator

[Operator instructions] Our next question comes from Mark Schappel with Benchmark.

Mark Schappel -- The Benchmark Company -- Analyst

Hi. Thank you for taking my question. Nice job on the quarter and Max, welcome, welcome aboard. Or excuse me, Frank, welcome aboard.

Max, a quick question for you -- first question for you, mobile deposit is particularly strong this quarter? I assume that a lot of that had to do with maybe just the timing of transaction blocks, but would you still consider mobile deposit to be a mid-teens revenue growth, say, on a normalized basis?

Max Carnecchia -- Chief Executive Officer

I think as we look forward, we've talked about over 10%, obviously, we're well over 10% this quarter. Maybe just first on the statement you made, I think the really nice performance in mobile deposit this quarter is a matter of just timing and where those gas tanks kind of hit E and needed to be refilled up. Having said that, I think when we now add back, where we think Check Fraud Defender, as a second act product can help enhance our deposits business overall 10% to 15% growth, yes, I think that's we're -- yes.

Mark Schappel -- The Benchmark Company -- Analyst

OK, great. Thank you. That's helpful. And then, with respect to ID R&D, I was wondering if you just give us maybe a real-world example of how their technology would work with your core ID technology.

Max Carnecchia -- Chief Executive Officer

Sure. So kind of back to some of these examples of real verification, so today, you establish your identity by taking that picture of your driver's license or passport or identity card front and back, and then you take the selfie. At the same time, you could very passively be capturing a voice biometric, right, so both establishing liveness but also taking that voiceprint, and that ends up in a registry at a bank or at a marketplace, like an Uber or a Lyft or an Airbnb. And here's a great example with Uber.

The drivers at Uber -- how do you know that the driver is actually the person behind the wheel that day, right? You registered to drive for Uber, but then you had a tough day. The next day, you're going to let your brother-in-law drive your car and use your phone, and that's a big risk for Uber. And it's not just a risk around the liability of some sort of accident, but the driver -- the passengers themselves. And so, periodically pinging a text or an email to that phone saying speak these words into the Uber app and being able to establish not only, yes, it was Frank who signed up to drive and Frank's the guy there, and Frank's alive.

It's not a recording of Frank's voice, he says the three words, his favorite football team or basketball team or whatever it happens to be. That's an easy example. Same sort of -- I just used the example with Mike Grondahl about the idea of a step up for money transfer in an existing account. Now, you want to take a picture, you take a picture.

You want to do voice, you do the voice. It's just so passive liveness and being able to do this in a less frictionful way where it's just kind of a natural interaction, you're going to see us continue to pursue that with other modalities, with other potential signals.

Mark Schappel -- The Benchmark Company -- Analyst

OK. Thank you.

Max Carnecchia -- Chief Executive Officer

You got it, Mark.

Operator

And at this time, I'm currently showing no further questions.

Todd Kehrli -- Investor Relations

OK, thank you, operator and thank you everyone for joining us today. We look forward to updating you next quarter. Our call has concluded. Have a wonderful day.

Operator

[Operator signoff]

Duration: 36 minutes

Call participants:

Todd Kehrli -- Investor Relations

Max Carnecchia -- Chief Executive Officer

Frank Teruel -- Chief Financial Officer

Bhavan Suri -- William Blair & Company -- Analyst

Mike Grondahl -- Northland Securities -- Analyst

Mark Schappel -- The Benchmark Company -- Analyst

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