authID (AUID) - 2025 Q2 - Quarterly Results

Q2 2025 Earnings Overview Executive Summary authID achieved record quarterly revenue of $1.4 million in Q2 2025, though net and adjusted EBITDA losses expanded due to higher operating expenses, with the CEO noting strategic advancements and IDX launch Executive Summary Financial Highlights | Metric | Q2 2025 ($) | Q2 2024 ($) | Change ($) | | :------------------- | :---------- | :---------- | :----- | | Total Revenue | $1.4 million | $0.3 million | +$1.1 million | | Operating Expenses | $5.9 million | $3.6 million | +$2.3 million | | Net Loss | $4.5 million | $3.3 million | +$1.2 million | | Loss Per Share | $0.33 | $0.34 | -$0.01 | | Adjusted EBITDA Loss | $3.4 million | $2.5 million | +$0.9 million | | Booked Annual Recurring Revenue (bARR) | $2.2 million | $0.6 million | +$1.6 million | - CEO Rhon Daguro stated the company achieved its highest quarterly revenue, demonstrating effective execution of growth plans, and highlighted team dedication, technology enhancements, and market expansion progress[3] - The company recently launched IDX, a significant advancement in the identity industry, substantially expanding its total addressable market[3] Recent Business and Operational Highlights authID made significant business and operational strides in Q2 2025, including the IDX launch with NEC, a paid production pilot with a UK Fortune 500 company, and an agreement with Prove, alongside PrivacyKeyTM enhancements and new board appointments - Partnership with NEC, the world's largest biometric hardware provider, for IDX launch significantly expanded the company's total addressable market in the identity management industry[12] - Secured a paid live production pilot agreement with a UK Fortune Global 500 company, anticipated to convert into a long-term agreement upon completion[12] - Signed an agreement with Prove, one of the world's largest identity fraud platforms, with the first joint customer launch imminent[12] - Enhanced PrivacyKeyTM's one-to-many search capability, launched in production pilots, offering the market's fastest speed and highest accuracy[12] Detailed Financial Results Second Quarter 2025 Financial Performance In Q2 2025, authID's total revenue surged to $1.4 million from $0.3 million year-over-year, but operating expenses also rose to $5.9 million, leading to an expanded net loss of $4.4 million and an adjusted EBITDA loss of $3.4 million Second Quarter 2025 Financial Performance Summary | Metric | Q2 2025 ($) | Q2 2024 ($) | Change ($) | | :------------------- | :---------- | :---------- | :----- | | Total Revenue | $1.4 million | $0.3 million | +$1.1 million | | Operating Expenses | $5.9 million | $3.6 million | +$2.3 million | | Net Loss | $4.4 million | $3.3 million | +$1.1 million | | Loss Per Share | $0.33 | $0.34 | -$0.01 | | Adjusted EBITDA Loss | $3.4 million | $2.5 million | +$0.9 million | Six Months Ended June 30, 2025 Financial Performance For the six months ended June 30, 2025, authID's total revenue grew to $1.7 million from $0.4 million, but operating expenses increased to $10.6 million due to higher headcount and R&D investments, resulting in an $8.7 million net loss and $7.3 million adjusted EBITDA loss Six Months Ended June 30, 2025 Financial Performance Summary | Metric | H1 2025 ($) | H1 2024 ($) | Change ($) | | :------------------- | :---------- | :---------- | :----- | | Total Revenue | $1.7 million | $0.4 million | +$1.3 million | | Operating Expenses | $10.6 million | $6.9 million | +$3.7 million | | Net Loss | $8.7 million | $6.3 million | +$2.4 million | | Loss Per Share | $0.72 | $0.67 | +$0.05 | | Adjusted EBITDA Loss | $7.3 million | $4.9 million | +$2.4 million | - Operating expenses increased primarily due to higher headcount, continued investments in sales and R&D, and an $0.8 million increase in estimated credit loss reserves[7][10] Remaining Performance Obligation (RPO) As of June 30, 2025, authID's Remaining Performance Obligation (RPO) significantly increased to $13.8 million, comprising $1.2 million in deferred revenue and $12.6 million in other non-cancelable contract amounts, up from $4.2 million in the prior year Remaining Performance Obligation (RPO) Summary | Metric | June 30, 2025 ($) | June 30, 2024 ($) | Change ($) | | :------------------- | :-------------- | :-------------- | :----- | | Remaining Performance Obligation (RPO) | $13.8 million | $4.2 million | +$9.6 million | | Deferred Revenue | $1.2 million | - | - | | Other Non-Cancelable Contract Amounts | $12.6 million | - | - | - The company expects to recognize the $13.8 million RPO over the entire contract lifecycle, typically a 3-year period[11] Booked Annual Recurring Revenue (bARR) and Annual Recurring Revenue (ARR) authID's total Booked Annual Recurring Revenue (bARR) reached $2.2 million in Q2 2025, a significant increase from $0.63 million year-over-year, including $0.9 million cARR and $1.2 million UAC, while Annual Recurring Revenue (ARR) grew to $5.8 million as of June 30, 2025 Booked and Annual Recurring Revenue Summary | Metric | Q2 2025 ($) | Q2 2024 ($) | Change ($) | | :------------------- | :---------- | :---------- | :----- | | Total bARR | $2.2 million | $0.63 million | +$1.57 million | | Net bARR | $1.9 million | $0.63 million | +$1.27 million | | cARR (Q2 2025) | $0.9 million | - | - | | UAC (Q2 2025) | $1.2 million | - | - | | ARR (as of June 30, 2025) | $5.8 million | $1.1 million | +$4.7 million | - Total bARR for the first half of 2025 was $2.2 million, up from $0.73 million in the prior year, with net bARR at $1.8 million, also up from $0.73 million[14] - Net bARR reflects contract amounts removed from previously reported bARR due to delays in certain customer production go-lives and usage ramp-ups[15] Corporate Information Conference Call Details authID will host a conference call and webcast on August 14, 2025, at 5:00 PM ET, led by CEO Rhon Daguro and CFO Ed Sellitto, to discuss financial results and provide company updates, with registration required for dial-in details and webcast access available on the investor relations website - The conference call and webcast are scheduled for August 14, 2025, at 5:00 PM ET[17] - authID CEO Rhon Daguro and CFO Ed Sellitto will host to discuss financial results and company updates[17] - Participants must register to receive dial-in details, and the webcast will be available on the company's "Events & Presentations" page[18] About authID Inc. authID Inc. (Nasdaq: AUID) is a leading provider of biometric identity verification and authentication solutions, ensuring enterprises "Know Who's Behind the Device™" with its easy-to-integrate, patented biometric identity platform, PrivacyKey, designed to prevent fraud and eliminate password risks - authID provides biometric identity verification and authentication solutions, ensuring enterprises "Know Who's Behind the Device™"[20] - Its patented biometric identity platform completes biometric identity verification in 700 milliseconds and biometric authentication in 25 milliseconds, offering fast, accurate, and user-friendly account recovery[20] - The PrivacyKey solution offers a 1-in-1 billion false match rate without storing biometric data, effectively preventing fraud, deepfakes, and account takeover[20] Forward-Looking Statements This press release contains forward-looking statements regarding future operations, growth, sales, potential contracts, bARR, ARR, cash flow, cash position, and financial condition, based on assumptions and subject to various risks including customer attraction, service implementation, competition, regulatory changes, international trade, and macroeconomic conditions - Forward-looking statements cover future operating results, growth and sales, potential contract signings, bARR, ARR, cash flow, cash position, and financial condition[21] - Actual results may differ materially due to various risk factors, including the company's ability to attract and retain customers, successful service implementation, effective competition, changes in laws and regulations, international trade conditions, and economic and political conditions[21] - Forward-looking statements are made as of the date of release and should not be relied upon as guidance for future performance, with no obligation for the company to update or revise them[21] Non-GAAP Financial Measures Adjusted EBITDA Adjusted EBITDA is a non-GAAP financial measure provided by the company to offer useful insights into its cyclical performance and core business activities when used with GAAP results, which management believes aids analysts, investors, and other stakeholders in evaluating comparable companies and assessing operational performance - Adjusted EBITDA is a non-GAAP financial measure management deems useful for evaluating the company's core business activities and operational performance[23] - Adjusted EBITDA reconciles GAAP net income (loss) by excluding interest expense, interest income, income tax provision, depreciation and amortization, stock-based compensation expense, and other items management believes affect the comparability of operating results[24] Reconciliation of Loss from Continuing Operations to Adjusted EBITDA (Non-GAAP) | | Three Months Ended | | Six Months Ended | | :--------------------------------------- | :---------- | :---------- | :---------- | :---------- | | | June 30, 2025 ($) | June 30, 2024 ($) | June 30, 2025 ($) | June 30, 2024 ($) | | Loss from Continuing Operations | $ (4,384,779) | $ (3,261,241) | $ (8,724,246) | $ (6,318,818) | | Add-back items: | | | | | | Net interest expense | 171 | 10,369 | 12,883 | 23,507 | | Interest income | (86,846) | (73,957) | (138,390) | (182,877) | | Severance | - | 8,638 | - | 14,251 | | Depreciation and amortization | 30,249 | 44,004 | 60,441 | 87,412 | | Stock-based compensation | 1,078,201 | 725,704 | 1,532,540 | 1,448,675 | | Adjusted EBITDA from Continuing Operations (Non-GAAP) | $ (3,363,004) | $ (2,546,483) | $ (7,256,772) | $ (4,927,850) | Booked Annual Recurring Revenue (bARR) and Annual Recurring Revenue (ARR) bARR (Booked Annual Recurring Revenue) is defined as the annual recurring revenue the company expects to derive from signed orders within 18 months of contract signing, comprising Committed Annual Recurring Revenue (cARR) and estimated Usage Above Contract (UAC), while ARR (Annual Recurring Revenue) is defined as recurring revenue recognized under GAAP for the last three months of the relevant period multiplied by four, with both non-GAAP metrics indicating future revenue growth trends but not serving as predictions - bARR is defined as the annual recurring revenue the company expects to derive from signed orders within 18 months of contract signing, composed of Committed Annual Recurring Revenue (cARR) and estimated Usage Above Contract (UAC)[28] - ARR is defined as recurring revenue recognized under GAAP for the last three months of the relevant period multiplied by four[29] - bARR and ARR should not be considered forecasts of future revenue but rather indicators of revenue trend direction, as actual GAAP revenue may differ significantly from these metrics[31] Condensed Consolidated Financial Statements (Unaudited) Statements of Operations authID's condensed consolidated statements of operations show significant net revenue growth for both Q2 and the first half of 2025, but total operating expenses also increased substantially, leading to expanded losses from continuing operations and net losses across both periods Summary of Condensed Consolidated Statements of Operations | Metric | Q2 2025 ($) | Q2 2024 ($) | H1 2025 ($) | H1 2024 ($) | | :----------------------- | :---------- | :---------- | :---------- | :---------- | | Net Revenue | $1,444,599 | $280,438 | $1,740,855 | $437,816 | | Total Operating Expenses | $5,916,053 | $3,605,267 | $10,590,608 | $6,916,004 | | Loss from Continuing Operations | $(4,471,454) | $(3,324,829) | $(8,849,753) | $(6,478,188) | | Net Loss | $(4,384,779) | $(3,261,241) | $(8,724,246) | $(6,318,818) | | Net Loss Per Share | $(0.33) | $(0.34) | $(0.72) | $(0.67) | Balance Sheets As of June 30, 2025, authID's total assets increased to $15.8 million from $14.5 million at December 31, 2024, driven by higher cash, accounts receivable, and deferred contract costs, while total liabilities slightly decreased and total stockholders' equity rose to $13.0 million Summary of Condensed Consolidated Balance Sheets | Metric | June 30, 2025 ($) | December 31, 2024 ($) | | :----------------------- | :-------------- | :-------------- | | Total Assets | $15,813,514 | $14,471,377 | | Cash | $8,300,280 | $8,471,561 | | Accounts Receivable, Net | $1,079,776 | $97,897 | | Contract Assets | $564,070 | $426,859 | | Total Liabilities | $2,819,790 | $2,956,188 | | Total Stockholders' Equity | $12,993,724 | $11,515,189 | Statements of Cash Flows For the six months ended June 30, 2025, authID's net cash outflow from operating activities increased to $8.39 million from $5.75 million year-over-year, primarily due to expanded net loss and changes in working capital, with net cash outflow from investing activities at $1,700, and net cash inflow from financing activities at $8.22 million mainly from common stock sales, resulting in an ending cash balance of $8.30 million Summary of Condensed Consolidated Statements of Cash Flows | Metric | H1 2025 ($) | H1 2024 ($) | | :----------------------- | :---------- | :---------- | | Net Cash Outflow from Operating Activities | $(8,388,822) | $(5,749,651) | | Net Cash Outflow from Investing Activities | $(1,700) | $(15,582) | | Net Cash Inflow from Financing Activities | $8,219,327 | $10,001,398 | | Net Change in Cash | $(171,281) | $4,230,294 | | Cash at End of Period | $8,300,280 | $14,407,393 | - Increased cash outflow from operating activities was mainly due to an expanded net loss, higher accounts receivable, and increased deferred revenue[37] - Cash inflow from financing activities primarily resulted from net proceeds of $8.46 million from common stock sales, partially offset by $0.245 million in convertible note repayments[37]