UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended June 30, 2025 OR ☐ Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from _________ to _________ Commission file number 000-21129 AWARE, INC. (Exact Name of Registrant as Specified in Its Charter) Massachusetts 04-2911026 Incorporation or Organ ...

Aware (AWRE) Q2 2025 Earnings Call July 30, 2025 05:00 PM ET Speaker0Good afternoon, and welcome to Aware's Second Quarter twenty twenty five Conference Call. Joining us today are the company's CEO and President, A. J. Maloney CFO, David Traverse and CRO, Brian Krause. Following their remarks, we will open the Before we begin today's call, I'd like to remind everyone that the presentation contains forward looking statements that are based on the current expectations of Aware's management and involve inheren ...

Company Contact Delaney Gembis Aware, Inc. 781-687-0300 marketing@aware.com Investor Contact Matt Glover Gateway Group, Inc. 949-574-3860 AWRE@gateway-grp.com "In the second quarter, we continued to make tangible progress across our strategic transformation, advancing our core technology, expanding our partner network, and strengthening our commercial execution to sustainably scale Aware," said Ajay Amlani, Chief Executive Officer and President of Aware. "We are executing against a clear roadmap grounded in ...

Company Overview - Aware, Inc. is a leading global biometrics company that utilizes data science and machine learning to address business and identity challenges through biometrics [3] - The company has over 30 years of experience in the field and is recognized for its ethical and responsible approach to biometric technology [3] Upcoming Financial Event - Aware will hold a webcast on July 30, 2025, at 5:00 p.m. Eastern time to discuss its financial results for the second quarter ended June 30, 2025 [1][2] - Financial results will be released in a press release prior to the webcast, which will include a presentation followed by a question-and-answer session [1] Investor Engagement - Interested parties can submit questions in advance of the webcast via email [2] - The presentation will be available for replay in the investor relations section of the company's website for approximately 90 days after the live event [2]

Company Overview - Aware, Inc is a global biometric identity platform company using data science, machine learning, and AI to address business and identity challenges[7] - The company has a 30-year legacy of innovation and market leadership in biometric technology[23] - Aware has a strong financial foundation for growth, focusing on recurring revenue and profitability[29] Market and Growth - The global biometric system market is projected to grow to $82.9 billion by 2027[11] - Aware experienced a 15% top-line revenue CAGR from 2020 to 2023[33] - The company achieved 20% ARR & Recurring Revenue Growth[33] Technology and Differentiation - Aware's technology combines liveness and authentication, multi-modal automated biometric identification system, integration-ready middleware, and biometric orchestration[35] - Aware is leading in preventing bias in biometric technologies, with competitors having 2X to 4X more bias in liveness detection and matching[41] - The company has ~80 U S & International Patents[36] Financial Highlights - Aware has $28.5 million in cash, cash equivalents & marketable securities with no debt[28] - The company maintains a >90% customer retention rate[26]

Core Insights - Aware, Inc. has been recognized as an industry Luminary in Core Identity Technology in the Prism Project's Deepfake and Synthetic Identity Report, highlighting its leadership in biometric authentication [1][2] - The company announced enhancements to its Awareness Platform, improving face matching performance and mobile face capture reliability [1][3] Company Recognition - The Prism Project's report evaluates over 200 organizations and emphasizes Aware's strengths in injection detection, deepfake detection, and liveness detection [2] - Aware's recognition as a Luminary reflects its long-standing commitment to secure and scalable biometric solutions, validated by independent testing from RIVTD and NIST [3] Platform Enhancements - Key improvements to the Awareness Platform include: 1. **Faster Face Matching**: Achieves up to 14x faster 1:N face search performance, reducing server resource usage and infrastructure costs while maintaining matching accuracy [5][7] 2. **Smarter Face Capture**: New mobile capture updates for iOS and Android enhance first-time success rates and optimize image quality, improving user experience and conversion rates [5][7] Industry Context - The report provides strategic guidance for decision-makers in the identity fraud landscape, emphasizing the need for organizations to verify identities confidently amid rising threats from deepfakes and digital deception [2][4] - Aware's innovations aim to help customers navigate the evolving digital identity landscape, balancing speed, security, and usability [5][7]

Core Insights - Aware, Inc. achieved best-in-class performance in the U.S. Department of Homeland Security's Remote Identity Validation Technology Demonstration, particularly excelling in passive liveness detection for presentation attack detection [1][3][4] - The DHS RIVTD program aims to challenge industry leaders to develop secure and user-friendly remote identity validation technologies to combat identity fraud during digital onboarding [2][4] - Aware's passive liveness detection technology is more efficient and user-friendly compared to active systems, which require user interaction and result in longer transaction times and higher failure rates [3][4] Company Performance - Aware's solution demonstrated top-tier performance in passive liveness detection, reaffirming its capabilities in combating identity fraud and reducing user friction [3][4] - The company is committed to delivering fast, accurate, and secure biometric solutions validated by leading government agencies like DHS [4][5] Future Outlook - Aware plans to participate in the upcoming RIVR 2025 testing to showcase advanced liveness features not included in previous tests, such as a patented bright screen reflection algorithm and behavioral algorithms [5][6] - The company emphasizes the importance of independent evaluations like RIVTD for establishing trust and improving biometric performance standards [5]

Core Insights - Aware, Inc. has appointed Lona Therrien as the new Chief Marketing Officer, signaling a commitment to accelerate growth in the biometric authentication sector [1][4] - Therrien has over 15 years of experience in the cybersecurity industry and has a proven track record in building marketing teams and executing successful go-to-market strategies [2][3] - The appointment is part of a broader strategy to enhance Aware's leadership team, which includes other key hires in the cybersecurity domain [4][5] Company Overview - Aware, Inc. is a global biometric platform company that leverages data science and machine learning to address identity challenges through biometric solutions [6] - The company has been a trusted name in the biometric field for over 30 years, focusing on providing secure and frictionless user experiences for government and commercial enterprises [6] Leadership and Strategy - Lona Therrien's leadership is expected to align marketing efforts with business growth, enhancing Aware's market presence and customer engagement [4][5] - The company aims to deliver fast, secure, accurate, and scalable biometric solutions to meet the growing demand in the market [5]

Core Insights - Aware, Inc. (AWRE) experienced a 4.7% decline in share price following its earnings report for the year ended March 31, 2025, contrasting with a 2.3% gain in the S&P 500 Index during the same period [1] - The company reported total revenues of $3.6 million for Q1 2025, an 18.4% decrease from $4.4 million in the same quarter last year, primarily due to a 38.7% drop in software license sales [2] - A net loss of $1.6 million was recorded for Q1 2025, widening from a loss of $0.9 million a year earlier, with net loss per diluted share increasing to $0.08 from $0.05 [3] Revenue and Profitability - Recurring revenues fell 14.7% to $2.7 million from $3.1 million year-over-year, influenced by the timing of license renewals [2] - Operating expenses decreased by 3.9% to $5.5 million, yet the operating loss expanded to $1.9 million from $1.3 million in the prior year [4] - Cash, cash equivalents, and marketable securities totaled $24.8 million at the end of the quarter, down from $27.8 million at the end of 2024 [4] Segment Performance - Software maintenance revenue remained stable at $2.2 million, while software subscriptions dropped 46.1% to $0.5 million [5] - Non-recurring software license revenue decreased by 32.4%, whereas service-related revenue increased by 21.9% [5] Management Strategy - CEO Ajay Amlani described the quarter as transitional, focusing on long-term scalable growth and realigning the go-to-market strategy [6] - The company is engaging with Fortune 500 firms for biometric solutions aimed at identity verification and fraud prevention [6][7] - CFO David Traverse indicated that 2025 is a foundational year, with strategic changes expected to show more impact in 2026 [10] Leadership Changes - Key leadership changes were made, including the appointment of Brian Krause as Chief Revenue Officer and Gary Evee as chairman of the board, reflecting a commitment to a disciplined commercialization strategy [11]

Revenue Performance - Revenue for Q1 2025 was $3.6 million, a decrease of 18% from $4.4 million in Q1 2024, with an operating loss of $1.9 million compared to a loss of $1.3 million in the prior year [72]. - Software license revenue decreased by 39% from $2.1 million in Q1 2024 to $1.3 million in Q1 2025, representing 36% of total revenue, down from 49% [75]. - Software maintenance revenue remained stable at $2.2 million for both Q1 2025 and Q1 2024, increasing its share of total revenue from 49% to 60% [78]. Cost Management - Total engineering costs decreased by 12% from $2.3 million in Q1 2024 to $2.0 million in Q1 2025, with engineering costs as a percentage of total revenue rising from 52% to 56% [87]. - Selling and marketing expenses decreased by 12% from $1.9 million in Q1 2024 to $1.7 million in Q1 2025, but increased as a percentage of total revenue from 43% to 46% [90]. - General and administrative expenses increased by 22% from $1.3 million in Q1 2024 to $1.6 million in Q1 2025, rising from 30% to 45% of total revenue [94]. Financial Position - Cash, cash equivalents, and marketable securities totaled $24.8 million as of March 31, 2025, a decrease of $3.0 million from December 31, 2024, primarily due to $2.9 million used in operating activities [100]. - Interest income remained stable at $0.3 million for both Q1 2025 and Q1 2024, but is expected to decrease slightly for the remainder of 2025 [96]. Strategic Initiatives - The company anticipates an increase in engineering expenses in 2025 to support strategic product development initiatives [88]. - The company plans to backfill key positions and increase selling and marketing expenses to capitalize on market opportunities [92].