Core Viewpoint - Aware, Inc. will hold a webcast on March 4, 2026, to discuss its financial results for Q4 and the fiscal year ending December 31, 2025 [1][2]. Company Overview - Aware, Inc. is a global leader in biometric identity and authentication solutions, providing the Awareness Platform that transforms biometric data into actionable intelligence [3]. - The platform is designed for mission-critical enterprise environments, offering intelligent, scalable architecture, real-time insights, and reliable security [3]. - Aware is headquartered in Burlington, Massachusetts [3].

Core Insights - Aware, Inc. has announced independent third-party evaluations validating its biometric identity verification technologies amid rising identity fraud risks due to generative AI advancements [1][2][3] Group 1: Technology Validation - Aware's biometric liveness and identity verification technologies have undergone rigorous third-party evaluations to assess their security, fairness, and performance under realistic conditions [4] - The Aware Intelligent Liveness technology was evaluated according to ISO/IEC 30107-3 standards, demonstrating zero false rejections at Levels 1 and 2, and 100% successful user completion at Level 3 [5][6] - The evaluation confirmed that Aware's system effectively detects sophisticated spoofing attempts, achieving zero successful attacks at Levels 2 and 3 [6] Group 2: Fairness and Bias Testing - Aware completed independent biometric bias testing, confirming consistent performance across all demographic groups, which is crucial for maintaining trust in biometric systems [7][8] - The results from the bias testing provide assurance that Aware's solutions apply liveness and matching decisions fairly across diverse populations [8] Group 3: Real-World Evaluation - Aware participated in the DHS 2025 Remote Identity Validation Rally (RIVR), where it was one of only five vendors to meet all high-performance goals defined by DHS [9][10][11] - Aware achieved zero failure-to-extract rates for both selfie and identity document images, indicating high-quality processing under real-world conditions [11] Group 4: Enhanced Security Measures - Aware has achieved FIDO2 Server Certification, validating its capability to support passkey-based authentication layered with biometric verification [12][13] - This certification aligns with increasing expectations for security in regulated environments, helping to mitigate phishing and automated attacks while ensuring user-friendly identity flows [13]

Core Insights - Cisco announced a significant evolution of its security portfolio aimed at enabling enterprises to adopt agentic AI confidently, focusing on agent protection, interaction governance, and resilient connectivity for AI-driven workflows [2][3]. Group 1: Security Enhancements - The expansion of Cisco AI Defense introduces new features to secure agents and the AI supply chain, helping teams inventory and govern AI assets while identifying vulnerabilities earlier in the development lifecycle [5]. - AI Defense has aligned with leading AI frameworks from organizations like NIST, OWASP, and MITRE, and now includes mapping to Cisco's Integrated AI Security and Safety Framework [6]. - New runtime protections include integration with NVIDIA NeMo Guardrails, providing a modular architecture for real-time protection of AI systems in production [7]. Group 2: Governance and Risk Management - Cisco's AI BOM (Bill of Materials) offers centralized visibility and governance for AI software assets, enhancing the security of the AI supply chain [9]. - The MCP Catalog helps discover and manage risk across MCP servers and registries, strengthening AI governance [9]. - Advanced algorithmic red teaming expands AI security assessments, while real-time guardrails monitor agent interactions to detect unsafe behavior [9][10]. Group 3: Connectivity and Performance - Cisco's IOS XE 26 introduces full-stack post-quantum cryptography (PQC) protections, aligning with evolving regulatory guidance and defending against device tampering [13]. - The new capabilities in Cisco SASE are designed to govern agent interactions and ensure reliable AI traffic, addressing the complexities of AI-driven workflows [11][12]. - AI traffic optimization techniques are implemented to maintain low-latency interactions during high-load periods, ensuring predictable performance [17]. Group 4: Additional Features - Cisco Duo is enhancing visibility and protection for on-premises identity infrastructure, addressing legacy gaps in modern controls and multi-factor authentication [18]. - New agentic capabilities in Cisco Security Cloud Control will proactively analyze firewall traffic and configurations to surface recommendations and autonomously remediate issues [18].

Core Insights - The article discusses the latest research reports on several stocks, highlighting their performance and outlook in the financial markets [1][2]. Morgan Stanley - Morgan Stanley's shares have outperformed the Zacks Financial - Investment Bank industry year-to-date, with a gain of +34.4% compared to +33.3% for the industry [4]. - The company's focus on wealth and asset management, along with strategic acquisitions like EquityZen, is expected to enhance revenue growth [4]. - Total revenues and investment banking fees are projected to increase by 11.7% and 12.8% respectively in 2025, although total expenses are also expected to rise by 9.1% due to expansion efforts [5]. Union Pacific Corp. - Union Pacific's shares have underperformed the Zacks Transportation - Rail industry year-to-date, with a decline of -3.1% compared to +2.4% for the industry [7]. - The company faces challenges from normalized e-commerce sales, geopolitical uncertainty, and high inflation, which are negatively impacting consumer sentiment and volumes [7][8]. - To address revenue weakness, Union Pacific is implementing cost-cutting measures while continuing to pay dividends and engage in stock buybacks [9]. The Southern Company - Southern Company's shares have gained +13.7% year-to-date, underperforming the Zacks Utility - Electric Power industry's gain of +22.6% [10]. - The company benefits from a recession-proof model and a substantial capital plan of $76 billion aimed at grid modernization and growth [11]. - However, Southern faces risks from high leverage, regulatory challenges, and competition from decentralized energy solutions, warranting a cautious stance from investors [12]. Aware, Inc. - Aware's shares have increased by +16.4% year-to-date, while the Zacks Internet - Software and Services industry has gained +34.4% [13]. - The company operates in the biometric identity solutions market, with a SaaS-first strategy that has led to 69.3% of total sales coming from recurring revenue [13][14]. - Despite strong liquidity and federal contracts enhancing visibility, Aware faces execution risks due to leadership transitions and cash burn amid higher fixed costs [14].

Group 1: Morgan Stanley - Morgan Stanley's shares have outperformed the Zacks Financial - Investment Bank industry year-to-date, with a gain of +34.4% compared to +33.3% [4] - The company's focus on wealth and asset management, along with strategic alliances and acquisitions, is expected to enhance its top line, particularly with the acquisition of EquityZen to access private markets [4] - Total revenues and investment banking fees are projected to increase by 11.7% and 12.8% in 2025, respectively, although total expenses are expected to rise by 9.1% due to expansion efforts [5] Group 2: Union Pacific Corp. - Union Pacific's shares have underperformed the Zacks Transportation - Rail industry year-to-date, with a decline of -3.1% compared to +2.4% [7] - The company faces challenges from normalized e-commerce sales, high inflation, and geopolitical uncertainty, which are negatively impacting consumer sentiment and revenue [8] - To address revenue weakness, Union Pacific is implementing cost-cutting measures while continuing to pay dividends and engage in stock buybacks [9] Group 3: Southern Company - Southern Company's shares have gained +13.7% year-to-date, underperforming the Zacks Utility - Electric Power industry's gain of +22.6% [10] - The company benefits from a recession-proof model, a substantial load pipeline, and a $76 billion capital plan aimed at grid modernization, which supports growth [11] - However, Southern faces risks from high leverage, regulatory challenges, and competition from decentralized energy solutions, warranting a cautious stance from investors [12] Group 4: Aware, Inc. - Aware's shares have increased by +16.4% year-to-date, while the Zacks Internet - Software and Services industry has gained +34.4% [13] - The company operates in the biometric identity solutions market, with a SaaS-first strategy that has led to 69.3% of total sales coming from recurring revenue [13] - Despite strong liquidity and federal contracts enhancing visibility, Aware faces execution risks due to leadership transitions and slow commercial conversion [14]

Core Insights - Aware, Inc. (AWRE) has experienced a stock decline of 7.4% since its earnings report for the year ended September 30, 2025, underperforming the S&P 500 Index's 0.3% decline during the same period [1] - The company reported a revenue increase of 33.3% year over year for Q3 2025, driven by license sales, despite a net loss of $1.1 million [2][10] Financial Performance - Q3 2025 revenues reached $5.1 million, up from $3.8 million in Q3 2024, with a notable contribution from a $1 million expansion in perpetual license sales [2] - The net loss improved to $1.1 million, or $(0.05) per diluted share, compared to a loss of $1.2 million, or $(0.06) per share, a year earlier [2] - Adjusted EBITDA loss narrowed to $0.8 million from $1.1 million year over year, reflecting revenue growth and cost discipline [3] Operating Expenses - Operating expenses increased by 20.8% to $6.4 million, primarily due to investments in sales, marketing, and product development [3] - Research and development costs rose 13.8% to $2.1 million, while selling and marketing expenses increased 13.3% to $2.1 million [4] Revenue Breakdown - Recurring revenue grew to $3.6 million, representing 69.3% of total Q3 2025 revenue, a 26.2% increase from the previous year [6] - Non-recurring revenue increased by 52.7% to $1.6 million, with software license revenue jumping 118.7% year over year [7] Cash Position - Cash, cash equivalents, and marketable securities totaled $22.5 million as of September 30, 2025, down from $27.8 million at year-end 2024 [7] Strategic Initiatives - The CEO highlighted a transformation strategy focused on advancing technology, enhancing customer engagement, and building strategic partnerships [8] - Aware achieved FIDO Alliance Certification for its face verification technology, positioning the company favorably in the biometric solutions market [9] Market Demand - The revenue increase was attributed to expanding government deployments and rising commercial demand for biometric solutions amid heightened cybersecurity needs [9] - The Chief Revenue Officer noted growing demand across federal and commercial sectors, particularly within DHS programs [11] Future Outlook - Management did not provide formal quantitative guidance but emphasized a focus on large, durable opportunities that can evolve into multi-year recurring revenue streams [12] - The company is prioritizing certifications such as ISO and FedRAMP, which are essential for federal and enterprise contracts [14]

Revenue Performance - Revenue for the three months ended September 30, 2025, was $5.1 million, an increase of 34% from $3.8 million in the same period of 2024[76] - Software license revenue increased 115% from $1.2 million in Q3 2024 to $2.5 million in Q3 2025, representing 49% of total revenue[80] - Software maintenance revenue increased 5% from $2.3 million in Q3 2024 to $2.4 million in Q3 2025, accounting for 46% of total revenue[84] - Services and other revenue decreased 45% from $0.4 million in Q3 2024 to $0.2 million in Q3 2025, representing 5% of total revenue[87] - Software license revenue for the nine months ended September 30, 2025, was $5.3 million, a 2% increase from $5.1 million in the same period of 2024[81] Operating Loss and Expenses - Operating loss for the three months ended September 30, 2025, was $1.3 million, a decrease from an operating loss of $1.5 million in the same period of 2024[76] - Total engineering costs increased 13% from $2.0 million in Q3 2024 to $2.2 million in Q3 2025, decreasing as a percentage of total revenue from 51% to 43%[95] - Selling and marketing expense increased 13% from $1.9 million in Q3 2024 to $2.1 million in Q3 2025, decreasing as a percentage of total revenue from 48% to 41%[99] - General and administrative expense increased 29% from $1.3 million in Q3 2024 to $1.7 million in Q3 2025, remaining stable at 33% of total revenue[104] - For the nine months ended September 30, 2025, total expenses increased by $1 million, primarily due to a $0.1 million signing bonus, a $0.3 million increase in compensation, and $0.4 million in professional services and stock compensation fees[107] Cash and Liquidity - As of September 30, 2025, cash, cash equivalents, and marketable securities totaled $22.5 million, a decrease of $5.3 million from December 31, 2024, primarily due to $6.4 million used in operating activities[113] - Cash used in investing activities was $0.2 million in the first nine months of 2025, mainly for net purchases of marketable securities and fixed assets[114] - Cash used by financing activities was $82 thousand in the first nine months of 2025, primarily for share repurchases[114] - The company believes its cash and cash equivalents will be sufficient to fund operations for at least the next twelve months, but future liquidity needs will depend on growth and operating results[115] Interest and Tax - Interest income decreased to $0.7 million for the nine months ended September 30, 2025, down from $0.9 million in the same period of 2024, attributed to lower average cash balances[108] - Total income tax expense for the nine months ended September 30, 2025, was $38 thousand, a decrease from $54 thousand in 2024, reflecting limitations on net operating loss carryforwards[110] Future Outlook - The company anticipates an increase in engineering expenses to support strategic product development initiatives throughout 2025[97] - Inflation has not materially impacted financial results to date, but future effects remain uncertain[116]

Group 1 - The article does not provide any relevant content regarding the company or industry [1]

Financial Data and Key Metrics Changes - Revenue in Q3 2025 reached $5.1 million, reflecting a 33% year-over-year growth, primarily driven by a $1 million perpetual license expansion sale and a $600,000 new term license contract [10][11] - Operating expenses increased to $6.4 million from $5.4 million in the prior year, attributed to investments in sales, marketing, and product development [10][11] - Net loss for the quarter improved to $1.1 million or $0.05 per diluted share, compared to a net loss of $1.2 million or $0.06 per diluted share in the prior year [11] - Adjusted EBITDA loss was $800,000, an improvement from a loss of $1.1 million in the prior year [11] - Cash, cash equivalents, and marketable securities at the end of the quarter totaled $22.5 million, with no debt [11][12] Business Line Data and Key Metrics Changes - The company is focused on two core markets: government and commercial enterprises, with growing demand for biometric solutions in both sectors [12][14] - In the government sector, there is an emphasis on modernization initiatives and compliance with Buy American requirements, particularly within the Department of Homeland Security [9][14] - On the commercial side, enterprises are increasingly adopting biometric solutions for workforce and customer use cases, emphasizing privacy and interoperability [9][15] Market Data and Key Metrics Changes - The shift in customer perceptions around biometrics has been significant, with everyday use of biometric technologies making them familiar and expected [4][5] - The federal government is experiencing tailwinds from funding for biometric modernization, although the federal shutdown has caused delays in appropriations [6][14] - The commercial sector is seeing a trend towards biometric-anchored digital identity solutions, particularly in fraud-prone verticals like financial services and travel [15][16] Company Strategy and Development Direction - The company is executing a three-pronged transformation strategy focused on advancing core biometric technology, strengthening the go-to-market model, and deepening strategic relationships [4][5] - Aware aims to deliver adaptive liveness detection and interoperability, positioning itself as a trusted provider in the biometric space [5][17] - The strategy includes prioritizing large, durable opportunities in federal and enterprise markets to drive multi-year recurring revenue [17][18] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the impact of the federal budget delays on near-term bookings but expects significant deal flow once the shutdown is resolved [23][24] - The company is focused on building a sustainable revenue model and improving pipeline conversion patterns to achieve more consistent growth [21][22] - Aware is committed to investing in certifications and partnerships that enhance its competitive position and reduce adoption friction for customers [30][32] Other Important Information - The company has upgraded leadership across revenue, marketing, and product to align the organization for disciplined scaling [8] - Aware's platform has achieved significant certifications, including FIDO Alliance certification, which enhances its credibility and reduces compliance friction [8][30] Q&A Session Summary Question: Q3 revenue grew 33% year-over-year but was flat year to date. Can you elaborate on the drivers of that variance? - The variance is due to the timing of customer decisions and license mix, with a focus on building a more sustainable revenue model [21] Question: Can you give more color to the pipeline conversion patterns? - There is healthy engagement and visibility into opportunities, but customer decision timing can still affect quarterly results [22] Question: How significant has the federal budget delays been to near-term bookings? - The government shutdown has impacted near-term bookings, but there is still ongoing conversation and expected urgency to deploy budgets once resolved [23][24] Question: Who do you view as your primary competitors in the biometric space? - The primary competition includes internal development within large enterprises, with Aware focusing on providing scalable solutions [25][26] Question: How do you prioritize new certifications like ISO or FedRAMP? - Certifications are crucial for customer trust and are prioritized to ensure compliance with modern cybersecurity threats [30][32] Question: How should we think about expense levels and operating leverage in FY2026? - Operating expenses will continue to rise as investments are made in growth, with a focus on efficiency and driving top-line revenue [34]

Financial Performance - Revenue for Q3 2025 increased 33% year-over-year to $5.1 million, driven by $1.0 million in perpetual license expansion and $0.6 million in new term license contracts [4]. - Net loss improved to $1.1 million, or $(0.05) per diluted share, compared to a net loss of $1.2 million, or $(0.06) per diluted share, in Q3 2024 [6]. - Adjusted EBITDA loss improved to $0.8 million from $1.1 million in Q3 2024, primarily due to increased total revenue [7]. - For the nine months ended September 30, 2025, revenue was $12.6 million, compared to $12.6 million for the same period in 2024 [9]. - Net loss for the nine months totaled $4.4 million, or $(0.21) per diluted share, compared to a net loss of $3.2 million, or $(0.15) per diluted share, in the same year-ago period [9]. - For the three months ended September 30, 2025, total revenue was $5,129,000, an increase of 33.3% compared to $3,849,000 for the same period in 2024 [26]. - Recurring revenue for the three months ended September 30, 2025, was $3,555,000, up 26.2% from $2,818,000 in the prior year [26]. - Total revenue for the nine months ended September 30, 2025, was $12,631,000, slightly up from $12,592,000 in the same period of 2024 [26]. Operating Expenses - Operating expenses rose to $6.4 million from $5.3 million in Q3 2024, reflecting targeted growth investments in sales, marketing, and product development [6]. - Stock-based compensation for the three months ended September 30, 2025, was $342,000, up from $220,000 in the same period of 2024, representing a 55.5% increase [24]. Cash and Securities - Cash, cash equivalents, and marketable securities totaled $22.5 million as of September 30, 2025, down from $27.8 million as of December 31, 2024 [8]. Product Development and Innovation - Aware achieved FIDO Alliance Certification for Face Verification in October, enhancing its position in secure, passwordless authentication [4]. - Launched Intelligent Liveness, a next-generation biometric liveness-detection capability that reduces false-negative rates by approximately 50% [4]. - Expanded engagement with a major U.S. federal agency by integrating Intelligent Liveness into a critical biometric program [4]. Revenue Breakdown - Software subscriptions revenue increased to $1,182,000 for the three months ended September 30, 2025, compared to $561,000 in 2024, representing a growth of 110.5% [26]. - Total non-recurring revenue for the three months ended September 30, 2025, was $1,574,000, a rise of 52.7% from $1,031,000 in the same quarter of 2024 [26]. - Software maintenance revenue for the three months ended September 30, 2025, was $2,373,000, an increase from $2,257,000 in 2024, reflecting a growth of 5.1% [26]. Interest Income - Interest income for the three months ended September 30, 2025, was $(247,000), an improvement from $(315,000) in the same quarter of 2024 [24].