Financial Performance - Total revenue for Q2 2023 was $3,184,000, a decrease of 25% compared to $4,238,000 in Q2 2022[14] - Software licenses revenue decreased to $1,039,000 in Q2 2023 from $2,018,000 in Q2 2022, representing a decline of 48.5%[14] - Operating loss for Q2 2023 was $2,936,000, compared to an operating loss of $1,353,000 in Q2 2022, indicating a worsening of 117%[15] - Net loss for Q2 2023 was $2,652,000, compared to a net loss of $1,289,000 in Q2 2022, reflecting an increase of 106%[15] - Revenue for the three months ended June 30, 2023, was $2,064,000, a decrease from $2,274,000 in the same period of 2022[46] - Revenue for the six months ended June 30, 2023, was $4,118,000, compared to $4,310,000 for the same period in 2022[46] - The net loss for the three months ended June 30, 2023, was $2,652,000, compared to a net loss of $1,568,000 for the same period in 2022[25] Cash and Assets - Cash and cash equivalents decreased to $3,313,000 as of June 30, 2023, down from $11,749,000 at the end of 2022, a decline of 71.8%[9] - Total assets decreased to $47,672,000 as of June 30, 2023, from $51,192,000 at the end of 2022, a reduction of 6.5%[9] - Marketable securities increased to $21,700 thousand as of June 30, 2023, from $17,200 thousand as of December 31, 2022[62] - The total assets measured at fair value on a recurring basis were $27,103 thousand as of June 30, 2023[63] - The balance of note receivable increased from $2.601 million as of December 31, 2022, to $2.663 million as of June 30, 2023[71] Expenses - Research and development expenses for Q2 2023 were $2,265,000, slightly up from $2,229,000 in Q2 2022, an increase of 1.6%[15] - Selling and marketing expenses increased to $1,956,000 in Q2 2023 from $1,412,000 in Q2 2022, a rise of 38.5%[15] - Stock-based compensation expense for the six months ended June 30, 2023, was $738 thousand, compared to $808 thousand for the same period in 2022[81] - The company reported stock-based compensation expense of $403,000 for the three months ended June 30, 2023[25] Liabilities and Equity - Total current liabilities increased to $6,627,000 as of June 30, 2023, compared to $5,802,000 at the end of 2022, an increase of 14.2%[10] - Stockholders' equity decreased to $36,442,000 as of June 30, 2023, down from $40,209,000 at the end of 2022, a decline of 9.4%[11] - As of June 30, 2023, total stockholders' equity was $38,767,000, a decrease from $40,209,000 at December 31, 2022[25] Revenue Recognition and Future Expectations - The company expects to recognize revenue from its SaaS offerings in future periods, with revenue recognized ratably over the subscription period[43] - Subscription-based contracts revenue for the six months ended June 30, 2023, was $1,885 thousand, up 10% from $1,715 thousand in the same period of 2022[49] - Deferred revenue as of June 30, 2023, was $4,359 thousand, an increase from $3,533 thousand as of June 30, 2022[56] - The company expects to recognize approximately 85% of the remaining deferred revenue over the next 12 months, with the remainder recognized thereafter[58] Acquisitions and Investments - FortressID was acquired for a total purchase price of $3.4 million, consisting of $2.5 million in cash and contingent payments valued at $0.9 million[68] - No revenue targets were achieved in 2022, resulting in a maximum contingent acquisition payment of $2.0 million as of June 30, 2023[68] - The investment in Note Receivable with Omlis Limited had a carrying value of $2,700 thousand as of June 30, 2023[66] - The company reported unrealized losses of $149 thousand on marketable securities as of June 30, 2023[67] Tax and Amortization - The company recorded no income tax benefits for net operating losses or research and development tax credits for the three and six months ended June 30, 2023[87] - A refundable federal tax credit of approximately $1.4 million is expected from the carryback of estimated losses reported on the 2020 tax return[88] - The company expects to record amortization expenses of $207 thousand for the remainder of 2023 and $415 thousand for 2024[74] - Interest income earned from the note receivable was $62 thousand for the six months ended June 30, 2023, compared to $38 thousand for the same period in 2022[78]

Aware, Inc. (NASDAQ:AWRE) Q1 2023 Earnings Conference Call May 2, 2023 5:00 PM ET Company Participants Matt Glover - Investor Relations, Gateway Group, Inc. Robert Eckel - President and Chief Executive Officer David Barcelo - Chief Financial Officer Craig Herman - Chief Revenue Officer Conference Call Participants Operator Good afternoon, and welcome to Aware’s First Quarter 2023 Conference call. Joining us today is the company’s CEO and President, Robert Eckel; CFO, David Barcelo; and CRO, Craig Herman. Fo ...

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 March 31, 2023 OR ☐ Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Securities Exchange Act of 1934 For the quarter ended March 31, 2023 Commission file number 000-21129 AWARE, INC. (Exact Name of Registrant as Specified in Its Charter) Massachusetts 04-2911026 | --- ...

Revenue Performance - Total revenue for 2022 was $16.0 million, a decrease from $16.9 million in 2021, primarily due to a $0.8 million decline in perpetual software licenses and a $0.7 million decrease in services revenue[101]. - Software license revenue decreased by 7% from $8.0 million in 2021 to $7.4 million in 2022, representing 46% of total revenue in 2022 compared to 47% in 2021[102]. - Software maintenance revenue increased by 6% from $6.7 million in 2021 to $7.1 million in 2022, accounting for 44% of total revenue in 2022, up from 40% in 2021[103]. - Services and other revenue fell by 31% from $2.2 million in 2021 to $1.5 million in 2022, decreasing from 13% of total revenue to 9%[104]. Operating Performance - Operating loss improved to $2.2 million in 2022 from $6.1 million in 2021, aided by a $5.7 million gain from the sale of fixed assets[101]. - Research and development expenses were $9.2 million in 2022, slightly down from $9.3 million in 2021, while total engineering costs remained stable at $10.5 million[109]. - Selling and marketing expenses increased by 10% to $7.0 million in 2022, representing 43% of total revenue, up from 38% in 2021[111]. - General and administrative expenses rose by 5% to $6.4 million in 2022, accounting for 40% of total revenue, compared to 37% in 2021[113]. Cash Flow and Financial Position - Cash used in operating activities was $5.0 million in 2022, down from $6.2 million in 2021, primarily due to the impact of the gain on the sale of fixed assets[120]. - As of December 31, 2022, the company had cash, cash equivalents, and marketable securities totaling $29.0 million, expected to fund operations for at least the next twelve months[125]. - As of December 31, 2022, the company estimates cash requirements for operating leases to be approximately $0.5 million in 2023 and $4.2 million thereafter[126]. - The company has $3.1 million of goodwill and $2.8 million of intangible assets as of December 31, 2022, with no impairments recorded to date[143]. - The company has a total of $11.1 million in deferred tax assets, with a corresponding valuation allowance of $11.1 million as of December 31, 2022[146]. Revenue Recognition and Accounting Policies - Revenue is recognized based on the transfer of control of goods and services, following a five-step model as per ASC 606[131]. - Revenue from software licenses is recognized at a point in time upon delivery, while software maintenance revenue is recognized over time on a straight-line basis[134]. - The company does not currently have any off-balance sheet arrangements, thus avoiding exposure to financing, liquidity, market, or credit risk[129]. - The company has not experienced material impacts from inflation on financial results to date[128]. - The company assesses the need for a valuation allowance on deferred tax assets and will adjust it based on future realizability evidence[148]. - The company has not made significant payments on guarantees and indemnifications historically, with no amounts accrued in financial statements[128]. - The company is continuing to assess the impact of recent accounting standards on its consolidated financial statements[149].

Aware, Inc. (NASDAQ:AWRE) Q4 2022 Earnings Conference Call March 9, 2023 5:00 PM ET Company Participants Matt Glover - Gateway, Investor Relations Robert Eckel - Chief Executive Officer & President Dave Barcelo - Chief Financial Officer Craig Herman - Chief Revenue Officer Conference Call Participants Matt Glover Good afternoon, and welcome to Aware's Fourth Quarter and Full Year 2022 Earnings Conference Call. Joining us today is the Company's CEO and President, Robert Eckel; CFO, Dave Barcelo; and CRO, Cra ...

Financial Data and Key Metrics Changes - In Q3 2022, the company reported revenue of $3 million, a decrease from $4.2 million in Q2 2022 and the same period last year [12][13] - Net income for Q3 2022 was $2.6 million, compared to a net loss of $1.6 million in Q3 2021, largely due to a one-time gain of $5.7 million from the sale of a building [14][15] - Adjusted EBITDA loss for Q3 2022 was $2.5 million, compared to a loss of $1 million in the same period last year [15][16] - The company maintained a strong cash position with $31 million in cash and marketable securities at the end of Q3 2022, up from $25 million at the end of the previous quarter [16] Business Line Data and Key Metrics Changes - Recurring revenue increased by $0.3 million year-to-date, totaling $7.1 million compared to the first nine months of the previous year [7] - Subscription revenue saw a 42% decline year-over-year, with $400,000 in Q3 2022 compared to $1.1 million in Q3 2021, attributed to differences in revenue recognition practices [49][50] Market Data and Key Metrics Changes - The company noted that several customers delayed purchases due to a challenging macroeconomic environment, impacting revenue generation [7][11] - AwareID, the new SaaS platform, was launched at Money2020, receiving positive feedback for its low-cost and easy-to-implement solution [10][36] Company Strategy and Development Direction - The company is transitioning from a traditional business model to a SaaS-based platform, focusing on increasing recurring revenue and optimizing the go-to-market strategy [26][27] - Key initiatives include expediting customer adoption, evolving the partner program, and realigning the revenue organization to meet growth objectives [21][23][25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate macroeconomic headwinds and achieve long-term growth despite short-term challenges [27] - The company anticipates Q4 2022 revenue to be better than Q3, with expectations for growth in 2023 [40][46] Other Important Information - The company relocated its headquarters to a smaller, more modern facility in Burlington, Massachusetts, to better suit current business needs [9] - AwareID is expected to nominally contribute to Q4 revenue, with a focus on increasing its impact on the top line in the future [44] Q&A Session Summary Question: Why is there a difference in cash proceeds from the building sale? - The building was sold for about $8.9 million, netting $8.6 million after commissions, with a one-time gain of $5.7 million recognized on the income statement [30] Question: What does success look like for Aware? - Success is defined as being the biometrics industry leader with strong recurring revenue and a robust client pipeline [32] Question: Can you provide updates on the customer pipeline? - The company has a robust pipeline, with long-standing customers increasing their spend and new customers moving towards full launch [34] Question: What feedback was received after launching AwareID? - Feedback was overwhelmingly positive, highlighting AwareID as a low-cost, easy-to-implement solution [36] Question: When will the business model transformation be complete? - The transformation is ongoing, with cash flow breakeven being a key metric to track [38] Question: What are the plans for deploying cash? - The company is investing in marketable securities to take advantage of attractive interest rates while evaluating high ROI opportunities [42] Question: How many customers are trialing AwareID? - Approximately a dozen customers were in a beta program prior to the launch of AwareID [57] Question: What impact has Craig had on the organization? - Craig has identified personnel gaps, refined sales processes, and engaged with partners to accelerate expansion [55]

Aware, Inc. (NASDAQ:AWRE) Q2 2022 Results Conference Call July 26, 2022 5:00 PM ET Company Participants Matt Glover - Gateway Investor Relations Robert Eckel - President & CEO David Traverse - Corporate Controller Matt Glover Good afternoon, and welcome to Aware's Second Quarter 2022 Conference Call. Joining us today is the Company's CEO and President, Robert Eckel; and Corporate Controller, David Traverse, filling in for our CFO, David Barcelo, who's on vacation. Following their remarks, we'll open the cal ...

Financial Data and Key Metrics Changes - The company's revenue for Q1 2022 was $4.7 million, representing a 17% increase sequentially and a 6% increase year-over-year, marking the highest quarterly revenue since 2018 [7][14] - Recurring revenue grew 30% year-over-year, driven by a 73% increase in subscription revenue compared to Q1 of the previous year [7][14] - The operating loss for Q1 2022 was $1.3 million, an improvement from an operating loss of $1.4 million in the same year-ago period [14] Business Line Data and Key Metrics Changes - The growth in subscription revenue reflects the expansion of existing partners and the addition of new partners globally [8] - The company announced two strategic partnerships in Q1 2022, with Anonybit and MIRACL, aimed at enhancing its biometric technology offerings [9][10] Market Data and Key Metrics Changes - The company is expanding its reach into new geographies and end markets through strategic partnerships, particularly in the Middle East, Asia, and South America [18] - The biometric market is expected to grow at a compound annual growth rate (CAGR) of 15%, and the company aims to exceed this growth rate [20] Company Strategy and Development Direction - The company is transitioning into a subscription-based SaaS platform, with a focus on launching the Aware ID SaaS platform in the second half of 2022 [17][21] - Partnerships with commercial resellers and integrated product resellers are prioritized to build operational leverage and expand revenue without increasing expenses [18][20] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's prospects for 2022 and beyond, citing strong first-quarter results and operational progress [21] - The company anticipates crossing over to adjusted EBITDA profitability by the end of 2023, although the exact timing remains uncertain [20][55] Other Important Information - The company made a $2.5 million strategic investment in a convertible note issued by MIRACL to support its growth [12] - The company maintains a strong cash position of $25.1 million at the end of Q1 2022, down from $30 million at the end of the previous quarter [16] Q&A Session Summary Question: What does ramping mean with respect to integrated resellers? - Ramping refers to signing an initial partnership agreement with a minimum initial level, collaborating to integrate Aware technology, and anticipating a full product launch within 6 to 18 months [25] Question: Can you elaborate on the use of approximately $5 million in cash in Q1? - The company used approximately $2.5 million for operating purposes and made a $2.5 million strategic investment in MIRACL [28] Question: What is the impact of the adoption of Flutter? - Currently, there is no financial impact, but the company anticipates more sales based on the release of the Flutter version [47] Question: What was recurring revenue for the quarter? - Recurring revenue for Q1 was reported to be a bit over $2.9 million [52]