Aware(AWRE) - 2025 Q1 - Quarterly Report

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].