AWARE INC /MA/ Q1 FY2025 earnings call

Deepening Strategic Partnerships

• Realigned go-to-market model to prioritize high impact customers and sectors where biometric authentication is mission critical.
• In active conversations with several Fortune 500 companies and have public sector opportunities tied to national security, border modernization, etc.
• Strengthened leadership team with Brian Krause as CRO and Gary Evee as Chairman.

Advancing Core Technology

• Began consolidating efforts under the awareness platform, a unified architecture integrating core biometric capabilities with third-party algorithms.
• Revitalized brand presence, rebuilt demand generation engine, and increased visibility in key industry events and Washington DC.

Scaling Thoughtfully and Sustainably

• Instilled culture of radical transparency and accountability.
• Redesigned sales organization, implemented consistent pricing and pipeline processes, and refocused customer service on renewals and strategic expansion.

Total revenue for the first quarter ended March 31, 2025 was $3.6 million, down from $4.4 million in Q1 of the prior year. Recurring revenue was $2.7 million compared to $3.1 million in the prior year period. Operating expenses were $5.5 million, down 5% from $5.7 million in Q1 2025. Operating loss was $1.8 million vs. $1.3 million in the prior year period. GAAP net loss was $1.6 million or $0.08 per diluted share vs. $1 million or $0.05 per diluted share in Q1 2024. Adjusted EBITDA loss was $1.5 million compared to $1 million in the prior year period. Cash, cash equivalents and marketable securities totaled $24.8 million as of March 31, 2025, down from $27.8 million on December 31, 2024.

Forward-Looking Statements

• Expect expenses to rise in Q2 and into the second half of 2025 but return to levels more in-line with a few quarters ago.
• 2025 is a transitional year, but building momentum with growing pipeline and strong market engagement, expecting early wins later in 2025 and long-term sustainable growth.

Risks

• Forward-looking statements involve inherent risks and uncertainties that could cause actual results to differ materially from those described.
• Factors in SEC filings could cause actual results to differ from forward-looking statements.

Q: Will Aware continue to pursue growth in annual recurring revenues via sales of the Aware ID product? If yes, what do you expect to change between the immediate future and the last three years where no measurable revenue growth progress has been made?

A: Our focus is not on driving growth through any single product. It’s on solving large scale identity challenges for Fortune 500 enterprises and government agencies where biometrics are becoming mission critical. We’re now solution first, engaging directly with senior decision makers on enterprise-wide risk mitigation, fraud prevention, and digital identity modernization.

Q: Has Aware made progress in adding customers or growing sales on the AWS marketplace or any of the other partner programs?

A: Our top priority is direct engagement with customers, delivering science-forward customer obsessed solutions to solve their most critical identity challenges. Partners like AWS and others can complement our efforts. Still, we are selective. We will only work with partners who share our mindset, add real strategic value, and help us deliver the scalable high impact outcomes that our customers demand.

Q: Could you provide more color on the types of industries or use cases these companies are exploring with Aware’s biometric solutions?

A: Today, we’re seeing strong engagement across several industries where securities identity verification is becoming mission critical. That includes financial services, trusted networks, ecommerce, healthcare, travel and hospitality, and many other markets. The common thread is that large enterprises increasingly recognize that passwords and traditional authentication are no longer sufficient. Biometrics provides a faster, more secure, and frictionless experience.

Q: How should we think about the timing and potential revenue contribution from some of the new strategic opportunities you’re developing in the second half of 2025 and into 2026?

A: While we don’t give specific guidance for 2025 on revenue, we’re viewing 2025 really as that this foundational year for Aware with the new leadership. And, as we discussed on our last call and as Ajay kind of emphasized today, what we’re really trying to do is strengthen our go-to-market model, focusing on high impact customers, and rebuilding the pipeline aligned with where we can win. With that, so the sales, [Ken Berry] (ph), can be a few months to a longer sales cycle. So, what we’re doing is we’re taking a focus on quality, making sure that the customers we bring in are aligned with our strategy, our platform vision, and our growth objectives. So, we do expect some early wins later this year and for more contributions to really build over time.

Q: How does the open architecture approach differentiate Aware from competitors and create a competitive advantage?

A: Absolutely. The awareness platform is a fundamental shift for both Aware and for the biometrics industry. Rather than force customers into a closed stack, we’re offering open modular architecture where they can orchestrate best-in-class algorithms through a unified platform. That flexibility is very attractive to large enterprises and governments who want choice, they want scalability, and they want future proofing. It also allows us to gather valuable insights to improve our models continuously.

Q: Are there specific programs or initiatives such as border monetization or digital identity where you feel particularly well-positioned today?

A: We feel well-positioned across the full U.S. government portfolio of opportunities. The U.S. federal government remains the largest investor in biometric technologies globally. We are strategically aligned with its long-term priorities around secure digital identity, digital modernization, and border innovation. Rather than focus on any single program, we’re actually positioning Aware as a trusted partner across a broad set of initiatives where secure, scalable biometric authentication is critical.

Q: What early indicators are you seeing that give you confidence awareness on the right trajectory for scalable, sustainable growth?

A: We’re actually seeing tangible progress on several fronts. First, our pipeline has materially expanded over the last 90 days, including opportunities with Fortune 500 companies and also new federal programs. Second, we’ve installed the leadership team necessary to drive disciplined execution. Brian joining as our CRO, a full sales and customer success realignment, and a marketing reboot to modernize our brand and demand generation. Third, we’re seeing growing inbound interest from customers who recognize Aware’s technology leadership and our shift toward the science-driven customer-first model.