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]

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]

Core Insights - Aware, Inc. reported a 33% year-over-year revenue growth in Q3 2025, reaching $5.1 million, driven by new customer activity and expansion within existing accounts [3][5][9] - The company is focused on a three-pronged transformation strategy that includes advancing biometric technology, enhancing customer engagement, and building strategic partnerships [3][4] - Aware achieved FIDO Alliance Certification for Face Verification, reinforcing its position in biometric security solutions [9] Financial Performance - Revenue for Q3 2025 increased to $5.1 million from $3.8 million in Q3 2024, reflecting a 33% growth [5][9] - Operating expenses rose to $6.4 million in Q3 2025 from $5.3 million in the same quarter of 2024, attributed to investments in sales, marketing, and product development [6] - The 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][9] Operational Highlights - Adjusted EBITDA loss for Q3 2025 was $0.8 million, an improvement from $1.1 million in Q3 2024, primarily due to increased revenue [7][9] - Cash, cash equivalents, and marketable securities totaled $22.5 million as of September 30, 2025, down from $27.8 million at the end of 2024, mainly due to operating losses [8] - The company launched Intelligent Liveness, a next-generation biometric liveness-detection capability, which significantly reduces false-negative rates [9] Nine-Month Financial Results - For the nine months ended September 30, 2025, revenue was $12.6 million, compared to $12.6 million in the same period of 2024 [10] - Operating expenses for the nine months increased to $17.7 million from $16.7 million year-over-year [10] - The net loss for the nine months was $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 prior year [10]

Core Viewpoint - Aware, Inc. will hold a webcast on October 29, 2025, to discuss its financial results for Q3 2025, which ended on September 30, 2025 [1] Group 1: Webcast Details - The webcast is scheduled for 5:00 p.m. Eastern time (2:00 p.m. Pacific time) [2] - Interested parties can submit questions in advance via email [2] - The presentation will be available for replay in the investor relations section of the company's website for approximately 90 days [2] Group 2: Company Overview - Aware, Inc. is a global leader in biometric identity and authentication solutions [3] - The Awareness Platform transforms biometric data into actionable intelligence, enabling organizations to verify identities and prevent fraud [3] - The platform is designed for mission-critical enterprise environments, providing intelligent, scalable architecture and real-time insights [3]

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]