Q4 2023 Aware Inc Earnings Call
Worse Encierro Craig Herman following their remarks, we will open the call for questions if you'd like to submit a question you can do so at any time using the built in ask a question feature in the webcast player.
Before we begin todays call I'd like to remind everyone that the presentation. Today contains forward looking statements that are based on the current expectations of a wheres management and involve inherent risks and uncertainties that could cause actual results to differ materially from those described.
Listeners should please take note of the Safe Harbor paragraph that is included at the end of today's press release.
Good afternoon, and welcome to <unk> fourth quarter, and full year 2023 conference call joining.
This paragraph emphasizes the major uncertainties and risks inherent in forward looking statements that management will be making today.
Joining us today is the company's CEO and President Robert Eckel Principal financial Officer, David Traverse Encierro Craig Herman.
Our wishes to caution you that there are factors that could cause actual results to differ materially from those.
Following their remarks, we will open the call for questions if you'd like to so my question you can do so at any time using the built in ask a question feature in the webcast player.
Indicated by such statements. These results and uncertainties are also outlined in the company's SEC filings, including its annual report on Form 10-K, and quarterly reports on Form 10-Q.
Before we begin todays call I'd like to remind everyone that the presentation. Today contains forward looking statements that are based on the current expectations of a waste management and involve inherent risks and uncertainties that could cause actual results to differ materially from those described.
Any forward looking statements should be considered in light of these factors.
You are cautioned not to place undue reliance upon any forward looking statements, which speak only as of the date made.
Although it may voluntarily do so from time to time are aware undertakes no commitment to update or revise the forward looking statements whether as a result of new information future events or otherwise, except as required by applicable securities laws.
Turner should please take note of the Safe Harbor paragraph that is included at the end of today's press release.
Graph emphasizes the major uncertainties and risks inherent in forward looking statements that management will be making today.
Our wishes to caution you that there are factors that could cause actual results to differ materially from those.
Additionally, this call references recurring revenue and recurring revenue and adjusted EBITDA, which are non-GAAP financial measures as that term is defined by the SEC regulation G. non-GAAP financial measures should be considered in isolation from or as a substitute for financial information presented in compliance with GAAP.
Indicated by such statements. These results and uncertainties are also outlined in the company's SEC filings, including its annual report on Form 10-K, and quarterly reports on Form 10-Q.
Forward looking statements should be considered in light of these factors.
You are cautioned not to place undue reliance upon any forward looking statements, which speak only as of the database.
Accordingly aware has provided a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP measures in the company's earnings release issued today.
Although it may voluntarily do so from time to time, well aware undertakes no commitment to update or revise the forward looking statements whether as a result of new information future events or otherwise, except as required by applicable securities laws.
I would like to remind everyone that this presentation will be recorded and made available for replay via link available in the Investor Relations section of the company's website.
Now I'd like to turn the call over where our CEO and president.
Additionally, this call references recurring revenue annual recurring revenue and adjusted EBITDA, which are non-GAAP financial measures as that term is defined by the SEC regulation G. non-GAAP financial measures should be considered in isolation from or as a substitute for financial information presented in compliance with GAAP.
Bob <unk> Bob.
Thanks, Matt Good afternoon, everyone and thank you for joining us today.
After the market close we reported our results for the fourth quarter and full year ended December 31 2023.
Copy of the press release is available in the Investor Relations section of our website.
Accordingly, or where it has provided a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP measures in the company's earnings release issued today.
2023 marked a record breaking year for where as we began to see the impact of our successful transformation to a recurring revenue and subscription first business model.
I would like to remind everyone that this presentation will be recorded and made available for replay via link available in the Investor Relations section of the company's website.
Our financial performance reflects our continued efforts to drive sustainable growth by prioritizing annual recurring revenue.
Now I'd like to turn the call, where our CEO and president.
Michael Bob.
Focusing our go to market strategy, enabling our partner ecosystem accelerating product market fit and optimizing our organizational structure.
Thanks, Matt Good afternoon, everyone and thank you for joining us today after the market close we reported our results for the fourth quarter and full year ended December 31, 2023, a copy of the press release is available in the Investor Relations section of our website.
Our strategic execution yielded markedly improved results in line with our expectations for 2023.
2023 marked a record breaking year for aware as we began to see the impact of our successful transformation to a recurring revenue and subscription first business model.
Headlining our success was the twenty-three strength growth in annual recurring revenue or <unk>.
Bringing our a R. R 212 million an impressive level, especially when you consider where was generating approximately $12 million in total revenue in my first year of this transformational journey 2020.
Our financial performance reflects our continued efforts to drive sustainable growth by prioritizing annual recurring revenue.
Focusing our go to market strategy, enabling our partner ecosystem accelerating product market fit and optimizing our organizational structure.
Our total revenue now after the 14% year over year growth.
$18 2 million marks the highest level since 2016.
Our strategic execution yielded markedly improved results in line with our expectations for 2023.
Furthermore, we have momentum.
In Q4, we generated $3 $7 million in recurring revenue, reflecting a 40% year over year growth.
Headlining our success was the twenty-three strength growth in annual recurring revenue or a or are bringing our a R. R 212 million an impressive level, especially when you consider where was generating approximately $12 million in total revenue in my first year of this transformational journey 2020.
These achievements propelled us to achieve the highest level of annual recurring revenue in the company's history and establish a strong recurring revenue base for 2024.
Moreover, our focus on cost optimization and operational efficiency is not only strengthen our financial position, but it also positions us for sustainable growth we.
Our total revenue now after the 14% year over year growth to $18 2 million marks the highest level since 2016.
We do still continue to see long sales cycles and did have net income negatively impacted in the quarter by $2 $7 million write off related to a March 2000 $22 million to $5 million investment in Armless limited.
Furthermore, we have momentum.
Q4, we generated $3 7 million in recurring revenue, reflecting a 40% year over year growth.
These achievements propelled us to achieve the highest level of annual recurring revenue in the company's history and establish a strong recurring revenue base for 2024.
Overall, we did see a significant reduction in cash burn in the year underscoring our commitment to financial Prudence and sustainable growth.
Moreover, our focus on cost optimization and operational efficiency is not only strengthen our financial position, but it also positions.
Greg and his team have demonstrated their ability this year and securing valuable clients and strategic partners.
<unk> solid foundation for future scalability.
I'll defer to Craig to dive deeper into our go to market strategy and key customer wins for Q4, and 2023 I'd like to highlight a few recent wins.
Notably in Q4, we on boarded several new clients in our core geographies, including a prominent technology provider in Argentina.
A leading tech company in Dubai, and a Turkish bank.
These successes emphasize our commitment to expanding our global footprint and forging impactful partnerships across diverse markets.
Furthermore, our dedication and focus on enhancing our partner program.
Which was officially launched in the third quarter remains unwavering in recent months, we have successfully integrated our bonds of solutions and services group into our partner ecosystem.
These strategic alliance are poised to bolster whereas market presence in our target verticals spanning North America, Latam Europe, Northern Africa, and the Middle East in fact, our collaboration with <unk> group is already yielding promising results with three potential opportunities emerging as a direct outcome there.
This underscores our commitment to fostering mutually beneficial partnerships that drive growth and expansion across our focus verticals and markets.
As previously noted in our quarterly updates it's important to acknowledge that we do not intend to announce every contract secured or currently in progress.
It's worth highlighting that <unk>, leading technology and resilient partnerships continue to identify additional opportunities in highly competitive markets.
Although there may be some fluctuations from quarter to quarter, we maintained a robust pipeline of opportunities in our backlog.
Moreover, our solid foundation of recurring revenue serves as a stabilizing force mitigating the impact of these fluctuations and providing a strong basis for future growth.
Before discussing 2024, I'll turn the call over to David to take us through our financial results for the fourth quarter and the full year and Craig to review our go to market.
David over to you.
Thank you Bob and good afternoon, everyone.
Turning to our financial results for the fourth quarter and full year ended December 31 2023.
Total revenue for the fourth quarter was $4 4 million compared to $4 1 million in the same year ago period the.
The year over year improvement was largely due to higher software maintenance revenue.
For the 12 months ended December 31, 2023, total revenue was $18 2 million, an increase compared to $16 million in 2022.
The increase in total revenue was primarily due to higher software license revenue.
Annual recurring revenue or <unk> as of December 31, 2023 increased to $12 million compared to $9 7 million.
December 31 2022.
For Q4, 2023 recurring revenue was $3 7 million or 82% of total revenue.
$3 7 million and recurring revenue represented a 40% year over year increase.
For the 12 months ended December 31, 2023 recurring revenue was $11 million, an increase of 13% compared to $9 7 million in 2022.
Looking at operating expenses and operating loss, which include one time actions in 2023, and 2022 related to the $2 $7 million write off of our investment in the Army is limited in the fourth quarter of 2023.
The 800000 onetime gain in Q3 of 2023 related to the closeout of our contingent consideration related to our <unk> acquisition as well as the $5 7 million onetime gain related to the company's building in July of 2022.
Our fourth quarter operating expenses were $8 9 million up from $6 1 million in Q4 of last year.
Operating expenses for the 12 months ended December 31, 2023, or $26 8 million up from $18 2 million in 2022, which as mentioned earlier includes the onetime actions in 2023 and 2022.
Operating loss for the fourth quarter of 2023.
It was $4 4 million compared to an operating loss of $2 million in the same year ago period.
Operating loss for the 12 months ended December 31, 2023 was $8 5 million compared to $2 2 million in 2022.
Now turning to GAAP net loss, which also includes the onetime transactions.
Mentioned earlier.
For the fourth quarter of 2023, GAAP net loss totaled $4 2 million or <unk> 20 per diluted share compared to GAAP net loss of $1 8 million or eight cents per diluted share in Q4 of last year.
For the full year of 2023, GAAP net loss totaled $7 3 million or <unk> 35 per diluted share compared to GAAP net loss of $1 7 million or <unk> <unk> per diluted share in the prior year.
Our adjusted EBITDA loss for the quarter totaled $1 3 million.
Which compares to a loss of $1 5 million in the same year ago period.
The year over year improvement in adjusted EBITDA was primarily due to higher revenue.
For the 12 months ended December 31, 2023, adjusted EBITDA loss totaled $4 6 million an improvement compared to an adjusted EBITDA loss of $5 2 million in the prior year ago period.
Looking at our balance sheet, we ended the quarter with $30 9 million in cash cash equivalents in marketable securities.
29 million at the end of the prior year.
As we were able to collect on our IRS carryback claim of $1 5 million and closeout of long term services project that was previously in Unbilled revenue.
As part of our previously announced share buyback program, which we extended to December 31, 2025, we repurchased 299780 common shares of stock at a cost of $500000 during the year.
Mainly due to higher revenue.
For the 12 months ended December 31, 2023, adjusted EBITDA loss totaled $4 6 million an improvement compared to an adjusted EBITDA loss of $5 2 million in the prior year ago period.
Entering 2024, we are backed by a strong cash position and balance sheet that offers us the flexibility to evaluate all our ROI opportunities with the potential to expedite our growth strategy.
Looking at our balance sheet, we ended the quarter with $39 million in cash cash equivalents in marketable securities.
<unk>.
That completes my financial summary, and now I would like to turn the call over to Craig to discuss the progress we've made on our go to market initiatives Greg.
At December 31, 2025, we repurchased 299780 common shares of stock at a cost of $500000 during the year.
Thanks, David.
Three proved to be an important year for aware as Bob highlighted earlier and as we expected it would be throughout the year, we remain steadfast in our commitment to scale through strategic partnerships expand and retain our core customer base and business segments and advance the product market fit of aware I'd.
Entering 2024, we are backed by a strong cash position and balance sheet that offers us the flexibility to evaluate all our ROI opportunities with the potential to expedite our growth strategy.
These concerted efforts contributed to our exceptional performance and set the stage for continued growth and success in the future.
That completes my financial summary, and now I'd like to turn the call over to Craig to discuss the progress we've made on our go to market initiatives Greg.
During 2023, we further advanced our go to market strategy by strategically investing in key areas of our business. We prioritized front end investments introducing a series of product enhancements across our portfolio in the latter part of the year guided by valuable feedback from our customers. Additionally, the form.
Thanks, David.
123 proved to be an important year for aware as Bob highlighted earlier and as we expected it would be throughout the year, we remain steadfast in our commitment to scale through strategic partnerships expand and retain our core customer base and business segments and advance the product market fit of aware I'd. These.
<unk> launch of our partner program in Q3, and the optimization of our organizational structure were pivotal and our ability to achieve our financial goals for 2023. These initiatives collectively strengthened our market position and propelled our success in the year.
These concerted efforts contributed to our exceptional performance and set the stage for continued growth and success in the future.
During 2023, we further advanced our go to market strategy by strategically investing in key areas of our business. We prioritized front end investments introducing a series of product enhancements across our portfolio in the latter part of the year guided by valuable feedback from our customers. Additionally, the form.
Since the launch of our formal partner program in the third quarter, we have been actively expanding and refining our partner ecosystem to maximize its impact central to this effort was the development of a dedicated partner portal, where partners can access enablement and co marketing materials to increase their knowledge and selling power of aware solutions.
<unk> launch of our partner program in Q3, and the optimization of our organizational structure were pivotal and our ability to achieve our financial goals for 2023. These initiatives collectively strengthened our market position and propelled our success in the year.
Presently our partner network is comprised of 65 active partners with two notable additions in Q4, namely serving group and our bonds are solutions among others.
These partnerships bolster our market reach and underscore our commitment to collaborative growth and success.
Since the launch of our formal partner program in the third quarter, we have been actively expanding and refining our partner ecosystem to maximize its impact central to this effort was the development of a dedicated partner portal, where partners can access enablement and co marketing materials to increase their knowledge and selling power of aware solutions.
In November we added serving group to our partner program, serving group as a leader in integrated digital technology business consulting and support and has deep connections with financial service firms governments and commercial enterprises across Latam and Europe, which we expect to leverage to amplify awareness presence in these high growth markets.
Presently our partner network is comprised of 65 active partners with two notable additions in Q4, namely serving group and <unk> solutions among others. This.
In fact, we already have three opportunities in conversation that stemmed from this new relationship.
Another recent addition to the partner program was a vons's solutions with their regionalized trusted and specialized expertise across the middle East our collaboration with <unk> solutions will be instrumental in helping us scale and maximize the opportunity in the middle East region in fact economic data points to the middle East become.
These partnerships bolster our market reach and underscore our commitment to collaborative growth and success.
In November we added serving group to our partner program, serving group as a leader in integrated digital technology business consulting and support and has deep connections with financial service firms governments and commercial enterprises across Latam and Europe, which we expect to leverage to amplify <unk> presence in these high growth markets.
The fastest growing region in the world for financial services and ecommerce this presents a tremendous opportunity for aware.
In fact, we already have three opportunities in conversation that stemmed from this new relationship.
In addition to expanding our partner network, we successfully on boarded several new customers this quarter across key regions, such as the Middle East Latin America and beyond.
Another recent addition to the partner program was a von <unk> solutions with their regionalized trusted and specialized expertise across the middle East our collaboration with <unk> solutions will be instrumental in helping us scale and maximize the opportunity in the middle East region in fact economic data points to the middle East becoming the.
Bob mentioned earlier notable additions include a technology provider in Argentina, a tech company in Dubai, and another Turkish bank to our portfolio here at home, we have partnered to be the foundational technology for ITI accompany deploying self serve DMV kiosks across the U S.
Fastest growing region in the world for financial services and ecommerce this presents a tremendous opportunity for aware.
Furthermore, our collaboration with people search has significantly enhanced our global online presence and expanded aware as use cases.
In addition to expanding our partner network, we successfully on boarded several new customers this quarter across key regions, such as the Middle East Latin America and beyond as Bob mentioned earlier. Notable additions include a technology provider in Argentina, a tech company in Dubai, and another Turkish bank to our portfolio here at home we are.
By partnering with people start to combat proxy testing fraud aware is tapping into a vast market opportunity.
<unk> administered millions of exams across more than 200 countries and territories offering us an extensive platform to increase our market share and drive growth in this burgeoning sector.
Partner to be the foundational technology for ITI accompany deploying self serve DMV kiosks across the U S.
With our partnerships and customer relationships continuing to generate increasing momentum in markets across the globe. We are confident we have built a strong foundation that we can leverage to drive future <unk>.
Furthermore, our collaboration with people search has significantly enhanced our global online presence and expanded aware as use cases.
As we entered 2024, our team's initiatives centered on continuing to sharpen the focus of the product market fit for our SaaS based platform driving incremental subscription based revenue and leveraging our partner ecosystem to capitalize on our increasing pipeline of opportunities in our core and target markets.
By partnering with people start to combat proxy testing fraud aware is tapping into a vast market opportunity.
People administers millions of exams across more than 200 countries and territories offering us an extensive platform to increase our market share and drive growth in this burgeoning sector.
Now I'd like to turn the call back to Bob for additional discussion on 2024.
With our partnerships and customer relationships continuing to generate increasing momentum in markets across the globe. We are confident we have built a strong foundation that we can leverage to drive future <unk>.
Bob.
Thanks, Greg.
We've entered 2024 with $12 million in annual recurring revenue, which is approximately the same amount of total revenue. The company generated when I began this transformational journey at the end of 2019.
As we entered 2024, our team's initiatives centered on continuing to sharpen the focus of the product market fit for our SaaS based platform driving incremental subscription based revenue and leveraging our partner ecosystem to capitalize on our increasing pipeline of opportunities in our core and target markets.
This shift from a short term book and ship company to a recurring revenue machine is now beginning to pay off.
And we will continue to pay off as evidenced by the positive cash flow achieved for the first time in years.
Our go to market strategy in 2024 will center around our enabled partner ecosystem and targeted use cases for a robust biometric identity platform.
I'd now like to turn the call back to Bob for additional discussion on 2024.
Bob.
Thanks, Greg.
We've entered 2024 with $12 million in annual recurring revenue.
We will focus on sustainable growth for scale, both in expanding in Upselling, our existing customer base and adding new logos will continue to prioritize quality over one time revenue and we'll still anticipate quarterly fluctuations due to specific timing of awards.
Which is approximately the same amount of total revenue the company generated when I began this transformational journey at the end of 2019.
This shift from a short term book and ship company to a recurring revenue machine is now beginning to pay off.
And we will continue to pay off as evidenced by the positive cash flow achieved for the first time in years.
Furthermore, we will be maintaining our commitment to business efficiency as we build towards profitability. In fact, we further reduce our annual operating costs by more than $1 million in Q1 of 2024.
Our go to market strategy in 2024 will center around our enabled partner ecosystem and targeted use cases for a robust biometric identity platform.
This was made possible by leveraging our engineering resources and our efforts to optimize our product lines go to market strategy and targeted product market fit.
We will focus on sustainable growth for scale.
With an expanding and upselling, our existing customer base, and adding new logos will continue to prioritize quality over one time revenue and we'll still anticipate quarterly fluctuations due to specific timing of awards.
Of course, if an opportunity arises that warrants additional investment we are ready and able to address it given our available cash resources.
Building upon our solid performance and the solid foundation established in Q4 and 2023, we're confident that aware is well positioned to sustained its momentum and drive additional recurring revenue paving.
Yeah.
Furthermore.
We will be maintaining our commitment to business efficiency as we build towards profitability. In fact, we further reduce our annual operating costs by more than $1 million in Q1 of 2024.
Paving the way for continued double digit growth and success in the coming year as we build towards profitability.
This was made possible by leveraging our engineering resources and our efforts to optimize our product lines go to market strategy and targeted product market fit.
We appreciate everyone's continued support and with that we'll now open the call to questions. Matt. Please provide the appropriate instructions.
Of course, if an opportunity arises that warrants additional investment we are ready and able to address it given our available cash resources.
Thank you Bob as a reminder, you can submit a question using the built in ask a question feature in the webcast player. Please hold while we populate the questions.
Building upon our solid performance and the solid foundation established in Q4 and 2023, we're confident that aware is well positioned to sustained its momentum and drive additional recurring revenue.
Our first question, Greg last quarter, you mentioned gaining momentum within the gaming space can you provide an update on the traction you were seeing.
<unk> the way for continued double digit growth and success in the coming year as we build towards profitability.
Yes, absolutely.
We've been working diligently to expand our presence in the gaming market, we've been working with strategic partners in this space.
We appreciate everyone's continued support and with that we'll now open the call to questions. Matt. Please provide the appropriate instructions.
Potential co marketing and integrated product opportunities and.
And we will not Q4 events, we started 2024 week with partners gaming events in January and our global gaming Tradeshow in February seven.
Thank you Bob as a reminder, you can submit a question using the built in ask a question feature in the webcast player. Please hold while we populate the questions.
Several additional events in the gaming space lineup for this year. We're also extremely excited by the launch of our Wordpress and will commerce integration.
Our first question, Greg last quarter, you mentioned gaining momentum within the gaming space can you provide an update on the traction you were seeing.
These are platforms that are used by a large number of gaming and retail companies globally. Wordpress is one of the leading website management platforms with tens of millions of websites worldwide.
Yes, absolutely yes.
We've been working diligently to expand our.
And in the gaming market, we've been working with strategic partners in this space.
No code Wordpress plug and set the stage to expanding the use cases with other sites in other industry verticals as well by leveraging Wordpress is all commerce technology integration opens the door for any sites in any vertical that use this market leading platform to process E Commerce transaction.
Potential co marketing and integrated product opportunities and.
I will not Q4 events, we started 2024 week with partners gaming events in January and our global gaming Tradeshow in February.
Several additional events in the gaming space lineup for this year. We're also extremely excited by the launch of our Wordpress and will commerce integration.
Texas specific question and an overall the response in the gaming space has been enthusiastic about our offerings.
These are platforms that are used by a large number of gaming and retail companies globally. Wordpress is one of the leading website management platforms with tens of millions of websites worldwide.
Thanks, Craig a couple of questions about an article from biometric update published in May 2021 about provider launching facial biometrics for health care through aware Anadenia partnerships first.
No code Wordpress plug and set the stage to expanding the use cases with other sites and.
In other industry verticals as well by leveraging Wordpress is all commerce technology integration opens the door for any sites in any vertical they use this market leading platform to process E Commerce transaction.
<unk> is still involved or is it just aware second why has the rollout taken so long and finally as a we're compensated on a per facial recognition transaction or is it a flat fee.
Sure we partnered our multiple multiple.
So back to the specific question in AML overall, the response in the gaming space has been enthusiastic about our offerings.
Multiple ways with different partners and it provided us an integrated reseller of our facial recognition product. The go to market and adoption is the responsibility of it provider and the consumers of the and provide a plateau.
Thanks, Craig a couple of questions about an article from biometric update published in May 2021 about to provider launching facial biometrics for health care through aware in academia partnerships first said.
Our focus on supporting our partners and the way they need to go to market. We are also partnering with them from a growth standpoint based on our usage based pricing.
<unk> is still involved or is it just aware second why has the rollout taken so long and finally as a we're compensated on a per facial recognition transaction or is it a flat fee.
We are excited by the initial partnership in the direction. It is yes.
Thanks, Greg.
David Thank you for the company generated $3 $7 million in recurring revenue how much of that was subscription versus maintenance.
Sure we partnered our multiple.
Multiple ways with different partners and in part it is an integrated reseller of our facial recognition product.
Thanks, Matt.
The go to market and adoption is the responsibility of it provide us and the consumers of the and provide a plateau.
The $3 7 million in the recurring revenue about.
About 40%, which was about a 40% growth from the prior year quarter.
Our focus on supporting our partners and the way they need to go to market. We are also partnered with them from a growth standpoint based on our usage based pricing.
Subscription based revenue contributed about $1 5 million, while the remaining $2 2 million came from both new and prior maintenance contracts.
We are excited by the initial partnership in the direction. It is.
And importantly, this included the conversion of a legacy customer to a multi year subscription contract during the quarter.
Thanks, Craig.
David Thank you for the company generated $3 $7 million in recurring revenue how much of that was subscription versus maintenance.
Thanks, David next.
Our next question the sale of the wires Nomi system to people search seems to be fully implemented.
Thanks, Matt.
The $3 7 million in the recurring revenue.
Was this brought online during the Q4 quarter.
About 40%, which was about a 40% growth from the prior year quarter.
Onetime sale with residual annual maintenance.
Recurring revenue stream is there a potential revenue growth with this relationship.
Base revenue contributed about $1 5 million, while the remaining $2 2 million came from both new and prior maintenance contracts.
Okay great.
John D will start did go live in Q4 this.
This is not a one time sale, but it's subscription based engagement that will grow as their business and the use of aware growth. We're very excited by the opportunity for future growth that we have with them and partners like this that are part of our recurring revenue growth model.
And importantly, this included the conversion of a legacy customer to a multi year subscription contract during the quarter.
Thanks, David.
The next question salable, whereas Gnome system to people search seems to be fully implemented was this brought online during the Q4 quarter.
Craig another one for you can you comment on the IP.
Onetime sale with residual annual maintenance recurring.
Application product where has provided to you in provider is this primarily where recurring revenue implementation. When do you expect revenue from the sale do you expect revenue from it can provide to become a significant revenue source.
Recurring revenue stream is there a potential revenue growth with this relationship.
Yes, yes.
People start did go live in Q4.
This is not a one time sale, but a subscription based engagement that will grow as their business and the use of of aware grows. We are very excited by the opportunity for future growth that we have with them and partners like this that are part of our recurring revenue growth model.
And lastly, as aware uniquely suited to enable DEA compliance or is this achievable with other authentication products also.
This is a recurring revenue stream.
Leveraging on where products, but not specifically aware of disappointment.
Craig another one for you can you comment on the IP.
Rates are aware is that our price can be configured for a wide range of use cases and specific industry engagements as well as this.
Application product, whereas provided and provider is this primarily where recurring revenue implementation. When do you expect revenue from the sale do you expect revenue from it can provide to become a significant revenue source.
Either SaaS or on Prem solutions.
The DAA compliance is the responsibility of <unk> and provider in this situation.
And lastly, as aware uniquely suited to enable DEA compliance or is this achievable with other authentication products also.
Thanks, Greg and then one how are you measuring performance in the partner channel.
This is a recurring revenue stream.
Yeah as we've discussed previously our ecosystem hub serves as a central resource for our partners to access co marketing sales enablement and training materials. In addition to the partner portal excuse me as a valuable resource for both new and established partners. The program itself also facilitates.
Leveraging on where products, but not specifically aware I E a disappointment.
Rates are aware is that our price can be configured for a wide range of use cases and specific industry engagements as well as this.
Either SaaS or on Prem solutions.
The DAA compliance is the responsibility of <unk> and provider in this situation.
Comprehensive metric tracking the meticulously track various metrics like the volume of active projects.
Thanks, Greg another one how are you measuring performance in the partner channel.
Pipeline level of each partner and the volume of new engagements to name a few these metro served as a key performance indicators, enabling us to assess the effectiveness of our ecosystem continually.
As we've discussed previously our ecosystem hub serves as a central resource for our partners to access co marketing sales enablement and training materials. In addition to the Parnell portal excuse me as a valuable resource for both new and established partners. The program itself also facilitates com.
As you know the Rev. Ops resource last year has helped us considerably on building out the reporting and process mechanics. We also began the search for a head of partnerships to oversee the strategic on our go to market.
I am extremely excited to announce that Todd Jarvis has joined us to lead our global partner efforts.
Prehensile metric tracking the meticulously track various metrics like the volume of active projects pipeline.
<unk> had extensive experience building and expanding global partner ecosystems with startups to enterprise Tech companies. He is engaged and started this week. We are looking forward to the impact you will have across our organization and partner ecosystem.
Pipeline level of each partner and the volume of new engagements to name a few these metro served as a key performance indicators, enabling us to assess the effectiveness of our ecosystem continually. The addition of a Rev. Ops resource last year has helped us considerably on building out the reporting and process mechanics. We also began to search for a head of partnerships to over.
Thanks, Craig and.
In 2023, the company exceeded expectations should grow by at least 15% how are you thinking about momentum in 2024.
The strategic arm our go to market.
I am extremely excited to announce that Todd Jarvis has joined us to lead our global partner efforts. Bob has had extensive experience building and expanding global partner ecosystems with startups to enterprise Tech companies. He is engaged and started this week. We are looking forward to the impact you will have across our organization and partner ecosystem.
Well, it's a great question and I figured somebody would ask.
So our strong performance in 2023, especially the 23% growth in <unk> really demonstrated the impact of our business model transformation and positions aware for even greater success in the years ahead.
So we've entered 2020 for $12 million of annual recurring revenue and this is about the same amount of total revenue were generated when I joined the company at the end of 2019 and.
Thanks, Craig.
2023 the company exceeded its expectations to grow <unk> by at least 15% how are you thinking about momentum in 2024.
And building upon the solid performance and solid foundation.
Well, it's a great question and I figured somebody would ask.
The baseline.
That was established in Q4 and 2023, we're confident Delaware is well positioned to sustained its momentum and drive additional recurring revenue and.
Our strong performance in 2023, especially the 23% growth in <unk> really demonstrated the impact of our business model transformation and positions aware for even greater success in the year.
And we're looking for this to pave the way for continued double digit growth and success in the coming year as we build towards profitability.
[noise] ahead.
So we've entered 2024 of the $12 million of annual recurring revenue and this is about the same amount of total revenue were generated when I joined the company at the end of 2019.
Thank you Bob Craig on the call you highlighted a recent partnership with ITI, which is expanding aware into the testing market can you share what other industries are you targeting in North America.
And building upon the solid performance and solid foundation.
The baseline.
Absolutely.
I'm happy to speak more generally regarding our approach to targeting our targeting is really twofold based on geography and industry vertical we have worked hard to establish.
That was established in Q4 and 2023, we're confident that aware is well positioned to sustain its momentum and drive additional recurring revenue.
And we're looking for this to pave the way for continued double digit growth and success in the coming year as we build towards profitability.
Footholds in Latam, North America, and the Middle East based on geography, we focus on relevant industry verticals for the region. For example, as you know financial services are targeted in Latam and the middle East we've shared gaining as a target across all our target geographies of course, we have our government targets to build on.
Thank you Bob Craig on the call you highlighted a recent partnership with ITI, which is expanding awareness of the testing market can you share what other industries are you targeting in North America.
Absolutely.
Strong foundations in North America, and Europe, as well, we continue to disrupt the law enforcement space in the U S with are aware avis offering through.
How do you speak more generally regarding our approach to targeting.
Targeting is really twofold based on geography and industry vertical we have worked hard to establish.
We are planning to maintain our position and look to grow in a number of other verticals here in North America and around the world through our partner ecosystem and direct.
It holds in Latam, North America, and the Middle East based on geography, we focus on relevant industry verticals for the region. For example, as you know financial services are targeted in Latam and the Middle East we've shared gaming as a target across all our target geographies of course, we have our government targets to build on.
David Bob.
Bob mentioned that you're further reduced annual operating costs by more than $1 million in Q1 2024, what can you tell us about the recurring operating costs you anticipate.
Thanks, Matt So we continue to be focused on revenue growth and really specifically the recurring revenue that Bob mentioned earlier.
<unk> foundations in North America, and Europe, as well, we continue to disrupt the law enforcement space in the U S with are aware abi's offering.
We are planning to maintain our position and look to grow in a number of other verticals here in North America and around the world through our partner ecosystem and direct.
But we also need we're also maintaining kind of the discipline in our spending.
So with the changes we made in the past few quarters will continue to drive towards profitability.
David.
Based on the timing of the actions over the past few quarters, including some that we made in the first quarter of 2024, which should begin to see the cost savings benefits.
Bob mentioned that you're further reduced annual operating costs by more than $1 million in Q1 2024, what can you tell us about the recurring operating costs you anticipate.
That million that Bob talked about in the second quarter of this year and that was in addition to some of the cost saving initiatives. We did in the second half of last year.
Thanks, Matt So we continue to be focused on revenue growth and really specifically the recurring revenue that Bob mentioned earlier.
Thanks, David Greg what can you share about legacy customer conversions.
But we also need we're also maintaining the discipline in our spending.
Sure.
So with the changes we made in the past few quarters will continue to drive towards profitability.
First let's start with me being really clear that we are actively looking to add new logos to our customer base and partner ecosystem that said as we <unk>.
Based on the timing of the actions over the past few quarters, including some that we made in the first quarter of 2024, we should begin to see the cost savings benefits.
Emphasized our subscription first business model, our primary focus was on expanding our recurring revenue stream. During 2023, we intensified our efforts in this regard by leveraging our newly formed customer success model. Our team is in perfect position to show our customers the advantage of a subscription based model versus license.
That million that Bob talked about in the second quarter of this year and that was in addition to some of the cost saving initiatives.
Second half of last year.
Thanks, David Greg what can you share about legacy customer conversions.
Sure.
The feedback has been positive on all sides and we are having increasing success converting legacy customers to subscription models. This brings more predictability for us as well as our customers.
First let's start with me being really clear that we are actively looking to add new logos to our customer base and partner ecosystem that said as we <unk>.
<unk>, our subscription first business model, our primary focus was on expanding our recurring revenue streams. During 2023, we intensified our efforts in this regard by leveraging our newly formed customer success model. Our team is in perfect position to show our customers the advantage of a subscription based model versus license.
An example, during the fourth quarter, we converted a significant legacy OEM to an annual subscription, which will continue to help minimize quarter to quarter fluctuations in 2024, we are incentivizing our teams to drive additional subscription revenue and take advantage of our cloud offerings.
Yeah.
Another one for you Craig last quarter, you broaden our revenue operations expert what changes has this had on the company sales process.
The feedback has been positive on all sides and we are having increasing success converting legacy customers to subscription models. This brings more predictability for us as well as our customers.
You bet.
A bit about.
Red Lobster earlier and in Q4, we brought on we brought her in to help focus on upgrading our sales technology and processes to give us a 360 degree view of our customers. The impact. So far has been tremendous the advantage is that all members of aware can now see what is happening with our customers and.
For example, during the fourth quarter, we converted a significant legacy OEM to an annual subscription, which will continue to help minimize quarter to quarter fluctuations in 2024, we are incentivizing our teams to drive additional subscription revenue and take advantage of our cloud offerings.
Yeah.
Another one for you Greg last quarter, you broaden our revenue operations expert what changes has this had on the company sales process.
Partners in near real time.
Also been focused on marketing to sales lead flow process and handoff was critical.
You bet.
For our growing business. This again is a combination of process and technology to ensure that we can track leads from first touch to closed one opportunities this visibility and the corresponding kpis give us the ability to invest and focus.
I talked a bit about.
Bob.
Earlier in Q4, we brought on we brought her into help focus on upgrading our sales technology and processes to give us a 360 degree view of our customers. The impact. So far has been tremendous advantages that all members of aware can now see what is happening with our customers and partners in near.
Specific areas of the funnel to improve our follow up messaging and overall impact through throughout our lead funnel.
Real time, we have also been focused on marketing to sales lead flow process and handoff was critical.
And Craig from a technology perspective, what areas are you focused on in 2024.
We continually advance awareness technology by adapting to and anticipating market demands following numerous product enhancements.
For our growing business. This again is a combination of process and technology to ensure that we can track leads from first touch to closed one opportunities this visibility and the corresponding kpis give us the ability to invest and focus in specific areas of the funnel to improve our follow up messaging and overall.
Enhancements. This year, we are confident in the robustness of our industry recognized biometric identity platform capable of effectively addressing current challenges, while maintaining top tier security and enhancing user experience. We are poised to further expand our reach and product adoption of our industry recognized.
Impact through throughout our lead funnel.
And Craig from a technology perspective, what areas are you focused on in 2024.
Biometric identity platform.
Family of offerings through the introduction of be spoke tools tailored to the unique requirements of our target sectors. These.
We continually advance awareness technology by adapting to and anticipating market demands.
Knowing numerous product enhancements this year.
These include financial services gaming access control and online certification and testing.
Confident in the robustness of our industry recognized biometric identity platform.
Thanks, Greg.
Capable of effectively addressing current challenges, while maintaining top tier security and enhancing user experience. We are poised to further expand our reach and product adoption of our industry recognized biometric identity platform.
Question could you see a positive impact to your business based on any of the proposed or potential solutions to the border and illegal immigration problem.
Absolutely.
This is where we've had global experience with this.
Family of offerings through the introduction of bespoke tools tailored to the unique requirements of our target sectors.
It is hitting home.
More right now, but we have worked with.
These include financial services gaming access control and online certification and testing.
Global.
Governments as well as the U S government and where we saw other.
Areas, where there was a large influx.
Thanks, Greg Our next question could you see a positive impact to your business based on any of the proposed or potential solutions to the border and illegal immigration problem.
Of.
Immigrants.
So we see transactions that spiked up so the need for additional services additional technology as well as our usage based pricing, which is based on transaction also goes up. So yes. This will have typically will have an impact on.
Absolutely.
This is where we've had global experience with this.
It is hitting home.
More right now, but we have worked with.
On our bottom line.
Global <unk>.
Thank you Craig at this time. This concludes our question and answer session. If your question wasn't answered. Please E mail <unk> IR team at AWS E at Gateway Dash <unk> Dot com.
Governments as well as the U S government and where we saw other.
Areas, where there was a large influx.
Of immigrants.
Now I'd like to turn the call back over to Bob for closing remarks.
We see transactions that spike up so the need for additional services additional technology as well as our usage based pricing, which is based on transaction also goes up. So yes. This will have typically will have an impact on.
I'd like to thank everybody for joining us on today's call I'd also like to thank our employees our partners our shareholders for their continued to support that they provide and.
And as a reminder, you may learn more about our strategy in the investor presentation, that's available on our website.
On our bottom line.
Thank you Craig at this time. This concludes our question and answer session. If your question wasn't answered. Please E mail <unk> IR team at AWS E at Gateway Dash <unk> ERP Dot Com I.
Look forward to updating you on the west progress on our next call.
Over to you Matt.
Thanks, Bob I'd like to remind everyone that a recording of today's call will be available for replay via a link in the investor section of the company's website. Thank you for joining us today for <unk> fourth quarter and full year 2023 conference call you may now disconnect.
I'd now like to turn the call back over to Bob for closing remarks.
I'd like to thank everybody for joining us on today's call I'd also like to thank our employees our partners our shareholders for their continued to support that they provide.
And as a reminder, amendment you may learn more about our strategy in the investor presentation, that's available on our website.
Look forward to updating you on the west progress on our next call.
Over to you Matt.
Thanks, Bob I'd like to remind everyone that a recording of today's call will be available for replay via a link in the investors section of the Companys website. Thank you for joining us today for <unk> fourth quarter and full year 2023 conference call you may now disconnect.