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Aware Reports Third Quarter 2022 Financial Results
Company Launches AwareID, its Multi-Modal SaaS-based Authentication Platform
Third Quarter 2022 and Recent Operational Highlights
- Generated revenue of
$3.0 million , with recurring revenue increasing$0.3 million in comparison to the first nine months of last year, to$7.1 million year-to-date. - Launched AwareID, its leading-edge multi-modal SaaS-based authentication platform, early in the fourth quarter at the Money2020 global fintech trade show in
Las Vegas . - Appointed new Chief Revenue Officer
Craig Herman , who will spearhead new revenue-generating efforts that focus on growing topline revenue and expanding partnership programs. - Moved its company headquarters to a state-of-the-art building in
Burlington, MA that is more closely aligned with modern hybrid working arrangements. - Presented Aware’s premier biometrics-based solutions at Identity Week America 2022, 2022
America Digital Conference , Febraban Tech 2022, and 2022 IAI AnnualEducational Conference , highlighting the company’s unparalleled expertise in biometrics.
Management Commentary
“Our revenue performance in the third quarter was impacted by the persistent macroeconomic headwinds that have elongated customer purchase decisions,” said
“Our top priority remains the strong execution of our multi-pronged growth strategy, which has solidified Aware’s foundation and positioned the company to drive scale and further expand into SaaS. Furthermore, as our transition to a subscription-based business model remains ongoing, we are supported by a strong balance sheet with more than
“We are focused on accelerating our expansion into the commercial SaaS market and bolstering recurring revenue through organic growth and a more focused enterprise sales team. A key element of our go-to-market strategy is partnering with strategic value-added resellers and integrated product resellers that can broaden the global reach of our dynamic biometrics-based solutions. Our new Chief Revenue Officer, a proven leader with significant experience building effective enterprise sales teams, is implementing an enhanced go-to-market strategy, bolstered by new customer success initiatives. With his emphasis on swift execution, upselling, and the development of a strong partner program, we expect to drive accelerated adoption of our AwareID offering and maximize our revenue generating opportunities.”
Third Quarter 2022 Financial Results
Revenue for the third quarter of 2022 was
Net income for the third quarter of 2022 totaled
Adjusted EBITDA loss for the third quarter of 2022 totaled
Cash, cash equivalents and marketable securities totaled
Nine Month 2022 Financial Results
Revenue for the nine months ended
Net income for the nine months ended
Adjusted EBITDA loss for the nine months ended
Webcast
Aware management will host a webcast today,
Date:
Time:
Webcast: Register Here
The presentation will be made available for replay in the investor relations section of the Company’s website. The audio recording will be available for approximately 90 days following the live event.
About Aware
Aware is a global authentication company that validates and secures identities using proven and trusted adaptive biometrics. Aware’s software and SaaS offerings address the growing challenges that government and commercial enterprises face in knowing, authenticating and securing individuals through frictionless and highly secure user experiences. Aware’s algorithms are based on the most diverse data sets in the world and can be tailored to the unique security and requirements of each customer. The company empowers users to have control over identities through clear, intuitive opt-in/opt-out features, helping them feel secure and improving their lives. Aware is a publicly held company (NASDAQ: AWRE) based in
Safe Harbor Warning
Portions of this release contain forward-looking statements regarding future events and are subject to risks and uncertainties, such as estimates or projections of future revenue, earnings and non-recurring charges, and the growth of the biometrics markets. Aware wishes to caution you that there are factors that could cause actual results to differ materially from the results indicated by such statements.
Risk factors related to our business include, but are not limited to: i) our operating results may fluctuate significantly and are difficult to predict; ii) we derive a significant portion of our revenue from government customers, and our business may be adversely affected by changes in the contracting or fiscal policies of those governmental entities; iii) a significant commercial market for biometrics technology may not develop, and if it does, we may not be successful in that market; iv) we derive a significant portion of our revenue from third party channel partners; v) the biometrics market may not experience significant growth or our products may not achieve broad acceptance; vi) we face intense competition from other biometrics solution providers; vii) our business is subject to rapid technological change; viii) our software products may have errors, defects or bugs which could harm our business; ix) our business may be adversely affected by our use of open source software; x) we rely on third party software to develop and provide our solutions and significant defects in third party software could harm our business; xi) part of our future business is dependent on market demand for, and acceptance of, the cloud-based model for the use of software: xii) our operational systems and networks and products may be subject to an increasing risk of continually evolving cybersecurity or other technological risks which could result in the disclosure of company or customer confidential information, damage to our reputation, additional costs, regulatory penalties and financial losses; xiii) our intellectual property is subject to limited protection; xiv) we may be sued by third parties for alleged infringement of their proprietary rights; xv) we must attract and retain key personnel; xvii) our business may be affected by government regulations and adverse economic conditions; xviii) we may make acquisitions that could adversely affect our results, xix) we may have additional tax liabilities; and xx) we believe the effects caused by the COVID-19 pandemic will likely have an adverse impact on our revenue over the next several quarters.
We refer you to the documents Aware files from time to time with the
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(unaudited)
Three Months Ended |
Nine Months Ended |
||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||
Revenue: | |||||||||||||||
Software licenses | $ | 814 | $ | 2,197 | $ | 5,459 | $ | 6,287 | |||||||
Software maintenance | 1,786 | 1,526 | 5,267 | 4,831 | |||||||||||
Services and other | 415 | 452 | 1,219 | 1,739 | |||||||||||
Total revenue | 3,015 | 4,175 | 11,945 | 12,857 | |||||||||||
Costs and expenses: | |||||||||||||||
Cost of sales | 282 | 243 | 920 | 933 | |||||||||||
Research and development | 2,279 | 2,307 | 6,932 | 7,067 | |||||||||||
Selling and marketing | 1,874 | 1,631 | 5,067 | 4,785 | |||||||||||
General and administrative | 1,808 | 1,574 | 4,895 | 4,644 | |||||||||||
Gain on sale of fixed assets | (5,672 | ) | — | (5,672 | ) | — | |||||||||
Total costs and expenses | 571 | 5,755 | 12,142 | 17,429 | |||||||||||
Operating income (loss) | 2,444 | (1,580 | ) | (197 | ) | (4,572 | ) | ||||||||
Interest income | 155 | 1 | 228 | 3 | |||||||||||
Net income (loss) | $ | 2,599 | $ | (1,579 | ) | $ | 31 | $ | (4,569 | ) | |||||
Net income (loss) per share – basic | $ | 0.12 | $ | (0.07 | ) | $ | 0.00 | $ | (0.21 | ) | |||||
Net income (loss) per share – diluted | $ | 0.12 | $ | (0.07 | ) | $ | 0.00 | $ | (0.21 | ) | |||||
Weighted-average shares – basic | 21,725 | 21,532 | 21,674 | 21,508 | |||||||||||
Weighted-average shares – diluted | 21,798 | 21,532 | 21,733 | 21,508 | |||||||||||
Other comprehensive loss, net of tax: | |||||||||||||||
Unrealized loss on available-for-sale securities | (170 | ) | — | (170 | ) | — | |||||||||
Comprehensive income (loss) | $ | 2,429 | $ | (1,579 | ) | $ | (139 | ) | $ | (4,569 | ) |
AWARE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(unaudited)
2022 |
2021 |
||||||
ASSETS | |||||||
Cash and cash equivalents | $ | 12,657 | $ | 29,963 | |||
Marketable securities | 18,315 | — | |||||
Accounts and unbilled receivables, net | 7,420 | 6,850 | |||||
Tax receivable | 1,411 | 1,411 | |||||
Property and equipment, net | 208 | 3,216 | |||||
6,030 | 6,342 | ||||||
Note receivable | 2,570 | — | |||||
All other assets, net | 1,438 | 591 | |||||
Total assets | $ | 50,049 | $ | 48,373 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Accounts payable and accrued expense | $ | 2,676 | $ | 2,192 | |||
Deferred revenue | 3,806 | 3,740 | |||||
Contingent acquisition payment | 919 | 919 | |||||
Total stockholders’ equity | 42,648 | 41,522 | |||||
Total liabilities and stockholders’ equity | $ | 50,049 | $ | 48,373 |
Non-GAAP Measures
We define adjusted EBITDA as
We define recurring revenue as the portion of Aware revenue that is based on an annual term or shorter arrangement and is likely to continue in the future, such as annual maintenance or subscription contracts. We use recurring revenue as a metric to communicate the portion of our revenue that has greater stability and predictability. We believe that recurring revenue assists in providing an enhanced understanding of effectiveness of our efforts to transition to a subscription-based business model.
Adjusted EBITDA and recurring revenue are non-GAAP financial measures and should not be considered in isolation or as a substitute for financial information provided in accordance with
AWARE, INC.
Reconciliation of GAAP Net income (loss) to Adjusted EBITDA
(In thousands)
(unaudited)
Three Months Ended |
Nine Months Ended |
||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||
Net income (loss) | $ | 2,599 | $ | (1,579 | ) | $ | 31 | $ | (4,569 | ) | |||||
Depreciation and Amortization | 141 | 171 | 587 | 520 | |||||||||||
Stock based compensation | 548 | 441 | 1,356 | 1,077 | |||||||||||
Gain on sale of fixed assets | (5,672 | ) | — | (5,672 | ) | — | |||||||||
Interest Income | (155 | ) | (1 | ) | (228 | ) | (3 | ) | |||||||
Adjusted EBITDA | $ | (2,539 | ) | $ | (968 | ) | $ | (3,926 | ) | $ | (2,975 | ) |
Three Months Ended | |||||||
2022 | 2022 | ||||||
Net income (loss) | $ | 2,599 | $ | (1,289 | ) | ||
Depreciation and Amortization | 141 | 221 | |||||
Stock based compensation | 548 | 379 | |||||
Gain on sale of fixed assets | (5,672 | ) | — | ||||
Interest Income | (155 | ) | (64 | ) | |||
Adjusted EBITDA | $ | (2,539 | ) | $ | (753 | ) |
AWARE, INC.
Revenue Breakout
(In thousands)
(unaudited)
Three Months Ended |
Nine Months Ended |
||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||
Recurring revenue: | |||||||||||||||
Software subscriptions | 444 | 1,062 | 2,159 | 2,183 | |||||||||||
Software maintenance | 1,646 | 1,441 | 4,957 | 4,634 | |||||||||||
Total recurring revenue | 2,090 | 2,503 | 7,116 | 6,817 | |||||||||||
Non-recurring revenue: | |||||||||||||||
Software licenses | 510 | 1,220 | 3,610 | 4,301 | |||||||||||
Services and other | 415 | 452 | 1,219 | 1,739 | |||||||||||
Total non-recurring revenue | 925 | 1,672 | 4,829 | 6,040 | |||||||||||
Total revenue | $ | 3,015 | $ | 4,175 | $ | 11,945 | $ | 12,857 |
Aware is a registered trademark of
Flutter and the related logo are trademarks of
Company Contact | Investor Contact |
781-687-0300 | 949-574-3860 |
grodrigues@aware.com | AWRE@gatewayir.com |
Source: Aware, Inc.