Q1 2025 Aware Inc Earnings Call
Joining us today are the company's CEO and President Jay <unk>, CFO, David <unk> and CFO, Brian Crouse.
<unk> remarks, we will open the call to 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 to get his call I'd like to remind everyone that the presentation. Today contains forward looking statements that are based on current expectations of <unk> 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.
Paragraph emphasizes the major uncertainties and risks inherent in forward looking statements that management will be making today.
But we're wishes to caution you that there are factors that could cause actual results to differ materially from those results indicated by such statements.
These risks and uncertainties are also outlined in the company's SEC filings, including its annual report on Form 10-K quarterly reports on Form 10-Q.
Any forward looking statements should be considered in light of those 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, where undertakes no commitment to update or revise the forward looking statements.
As a result of new information future events or otherwise, except as required by applicable securities laws.
Additionally, this call contains certain non-GAAP financial measures that that term is defined by the SEC regulation G.
non-GAAP financial measures should not be considered in isolation from or a substitute for financial information presented in compliance with GAAP.
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.
I would like to remind everyone that this presentation will be recorded and made available for replay via a link in the Investor Relations section of the company's website.
J Bonney: Now I'd like to turn the call over to <unk>, CEO and President J Bonney Hey.
Hey, Jay.
Speaker Change: Thank you, Matt and good afternoon, everyone. This quarter marks the beginning of a strategic transformation with a renewed focus on durable scalable growth. We introduced a bold streamlined go to market strategy aimed at unlocking new and more substantial revenue streams in addressable market.
J Bonney: This transformation began in February and we are already seeing.
J Bonney: <unk> improvements in our pipeline and deal flow, we are speaking to the who's who of the technology industry about their intent to deploy biometrics at scale and the improvements we expect to receive by doing so we are well positioned with the right science forward solutions and the right customer obsessed associates to capture and grow these opportunities we've taken clear focus.
J Bonney: Steps to sharpen execution concentrated on high potential segments in strength.
J Bonney: <unk> for scalable growth.
Speaker Change: Since stepping into the CEO role at <unk> 90 days ago. Our focus has been building the foundation for durable sustainable growth on our last call I outlined three strategic priorities to guide that effort deepened strategic partnerships advance core technology scale, the business thoughtfully and sustainably.
J Bonney: Today I'd like to walk you through our progress on each front.
J Bonney: Deepening strategic partnerships in Q1, we realigned our go to market model to prioritize high impact customers in sectors, where biometric authentication admission critical that work is already bearing fruit. We're now in active conversations with several fortune 500 company relationship that simply didn't exist three.
J Bonney: <unk> ago.
J Bonney: The public sector side, we are preparing for several high impact opportunities tied to national security border modernization and digital identity initiatives. We continue to see strong interest in citizen services and public safety, where secure scalable biometric solutions are becoming increasingly essential.
J Bonney: We also significantly strengthened our leadership team, Brian Crowley joined US as Chief revenue officer, bringing over a decade of leadership experience across <unk> <unk> and any vision.
J Bonney: Brian has led high performing teams close multimillion dollar deals and built deep partnerships across government and enterprise.
J Bonney: And I have a long standing working relationship which allows for seamless coordination and execution.
Speaker Change: We also appointed Gary <unk> as chairman of the board.
Speaker Change: As a former IBM executive and cyber security expert with deep experience advising federal agencies and global enterprises.
He has already played a pivotal role in our strategic alignment.
Speaker Change: And bringing the kind of governance and strategic discipline that will serve us well in this next phase.
Speaker Change: These leadership changes reflected deliberate shift in how we intend to operate going forward. The board recognize the need for a major reset to install leadership capable of executing a disciplined commercialization strategy strengthening our sales process and then filling clear operational vigor our mandate is to.
Speaker Change: Move forward with transparency realistic goal setting and a clear focus on converting aware technological technological experience into sustained shareholder value.
Speaker Change: This strategic alignment with the board has enabled us to move quickly and decisively as we reposition the company for long term success.
Speaker Change: Second we're advancing our core technology, we've begun consolidating our efforts under the awareness platform a unified architecture that integrates our core biometric capabilities with best in class third party algorithms where needed.
Speaker Change: This enables us to deliver optimal outcomes to customers, while continuously strengthening our own models with data insight.
Speaker Change: We've also revitalize our brand presence the awareness is now at the center of our identity modern clean and focused we've rebuilt our demand generation engine increased our visibility at key industry events and elevated our presence in Washington, DC through new federal lobbying efforts.
Speaker Change: Third scaling thoughtfully and sustainable.
Speaker Change: We've instilled a culture of radical transparency and accountability, we redesigned the sales organization implemented consistent pricing and pipeline processes and refocused our customer service.
Speaker Change: Team on renewals and strategic expansion opportunities.
Speaker Change: So while our Q1 results reflect a business in transition the underlying transformation is real and accelerating we expect the first half of the year to remain foundational, but we are building momentum heading into the second half with a growing pipeline and stronger market engagement.
Speaker Change: With that foundation in place I'll turn it over to David for a closer look at our Q1 financials over to you David.
David: Thank you AJ.
David: Take a look at our financial results for the first quarter, which ended on March 31 2025.
David: Total revenue was $3 6 million compared to $4 4 million in Q1 of last year.
David: The year over year decrease was primarily driven by lower software license sales in our project driven and fluctuate from period to period.
David: Recurring revenue was $2 $7 million compared to $3 1 million in the prior year period. This.
David: This year over year difference was due to the timing of subscription term license renewals.
David: Moving down the income statement.
David: <unk> expenses were reduced to $5 $5 million down.
David: Down 5% from $5 7 million in Q1 of 2025.
David: Operating loss was $1 8 million compared to an operating loss of $1 3 million for the same prior year period.
David: GAAP net loss was $1 6 million or <unk> <unk> per diluted share compared to GAAP net loss of $1 million or <unk> <unk> per diluted share in Q1, 'twenty 'twenty four.
David: Our adjusted EBITDA loss for the quarter, which are reconciled to GAAP in our earnings release was $1 5 million compared to adjusted EBITDA loss of $1 million in the prior year period.
David: This decline was primarily due to a lower lower total revenue slightly offset by reduced lower operating expenses.
David: We continue to operate with discipline over the past few quarters.
David: <unk> operations to set up our new leadership to invest in the right areas for future growth.
David: That work has made us more efficient and put us in a stronger position to scale around our strategic priorities.
David: As we move through Q2 into the second half of 2025, we do expect expenses to rise.
David: Really just returning to levels more in line with where they were a few quarters ago.
David: These investments are deliberate and focused and we believe they are critical to driving long term sustainable growth.
David: Now finally, turning to the balance sheet as of March 31, 2025, we had cash cash equivalents in marketable securities totaling $24 8 million compared to $27 8 million at December 31, 2024.
David: Now I'll hand, the call over to our new CRO, Brian Crouse welcome Brian.
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Matt Glover: Joining us today are the company's CEO and president, Ajay Amlani, CFO David Traverse, and CRO Brian Krause. Following their remarks, we will open the call to 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 webinar.
It's just a rise, but really just returning to levels more in line with where they were a few quarters ago.
Brian Crouse: Thank you David.
Brian Crouse: Privilege to join aware at such a pivotal time in its transformation.
These investments are deliberate and focused and we believe they are critical to driving long term sustainable growth.
Speaker Change: Joined aware because of its unmatched pedigree and biometrics, a 30 year history of pioneering research deep technical expertise and a trusted presence in some of the most demanding environments, particularly across the U S. Federal agencies are solutions are relied upon by organizations such as department of Defense Department of Homeland Security and many others very few companies can say.
Now finally, turning to the balance sheet as of March 31, 2025, we had cash cash equivalents in marketable securities totaling $24 8 million compared to $27 8 million at December 31, 2024.
Matt Glover: Before we begin today's call, I'd like to remind everyone that the presentation today contains forelooking statements that are based on current expectations of awareness 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 This paragraph emphasizes the major uncertainties and risks inherent in forward-looking statements that management will be making today. Wishes to caution you that there are factors that could cause actual results to differ materially from those results indicated by such statements.
Bryan Crouse: Now I'll hand, the call over to our new CFO Bryan Crouse welcome Brian.
Speaker Change: This and it provides a strong foundation for durable sustainable growth as we expand into new commercial and international markets. Today, we're seeing unprecedented interest from fortune 500 companies actively exploring and testing biometric solutions.
Bryan Crouse: Thank you David.
Bryan Crouse: It really is to join aware at such a pivotal time in <unk>, a 30 year history of pioneering research deep technical expertise and a trusted presence in some of the most demanding environments, particularly across the U S federal agencies.
Speaker Change: This shift plays to aware strengths.
Speaker Change: Enterprises increasingly recognize the urgency of securing digital interactions with fast accurate scalable and science driven technologies.
Bryan Crouse: Our solutions are relied upon by organizations such as Department of Defense Department of Homeland Security and many others very few companies can say this and it provides a strong foundation for durable sustainable growth as we expand into new commercial and international markets. Today, we're seeing unprecedented interest from Fortune 500 companies Act.
Matt Glover: These risks 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-K. Any forelooking statements should be considered in light of those factors. Your caution not to place undue reliance upon any forward-looking statements which speak only as of the date.
Speaker Change: As fraud continues to rise across various sectors biometrics is becoming a critical layer of defense importantly, our conversations now extend beyond security teams, we're speaking directly with Ceos and boards focused on enterprise risk at the same time the U S. Federal government's commitment to biometric modernization remains strong further in <unk>.
Matt Glover: Although it may voluntarily do so from time to time, Aware undertakes no commitment to update or revise the forelooking statement. Whether as a result of new information, future events, or otherwise, except as required by applicable securities laws.
Bryan Crouse: Really exploring and testing biometric solutions. This shift plays to <unk> strengths large enterprises increasingly recognize the urgency of securing digital interactions with fast accurate scalable and science driven technologies.
Speaker Change: Forcing our market opportunity.
Speaker Change: To capture this momentum, we're evolving and expanding awareness go to market strategy. Our key priority is replicating our success in the U S federal sector across high growth commercial industries and international geographies, we're transforming our demand Gen model by embedding domain experts to lead each market vertical ensuring deeper engagement and <unk>.
Matt Glover: Additionally, this call contains certain non-GAAP financial measures that that term is defined by the SEC in Regulation G. Non-GAAP financial measures should not be considered in isolation from or a substitute for financial information presented in compliance with GAAP.
Bryan Crouse: As fraud continues to rise across various sectors biometrics is becoming a critical layer of defense importantly, our conversations now extend beyond security teams, we're speaking directly with Ceos and boards focused on enterprise risk at the same time the U S federal government's commitment to biometric modernization.
Matt Glover: Accordingly, Aware has provided a reconciliation of these non-gap financial measures to the most correctly comparable gap measures in the company's earnings release issued I would like to remind everyone that this presentation will be recorded and made available for replay via a link in the investor relations section of the company's website.
Speaker Change: <unk>, we are building a focused measurable and scalable commercial engine that aligns with our strategic priorities.
Bryan Crouse: Remaining strong further enforcing our market opportunity to.
Bryan Crouse: To capture this momentum, we're evolving and expanding awareness go to market strategy. Our key priority is replicating our success in the U S federal sector across high growth commercial industries and international geographies, we're transforming our demand Gen model by embedding domain experts to lead each market vertical ensuring deeper engagement and <unk>.
Speaker Change: At the core of this is a science forward approach to selling one that emphasizes aware its technical leadership solution orientation and problem solving capabilities rather than pushing product.
Ajay Amlani: Now I'd like to turn the call over to Aware's CEO and President, Ajay Amlani. Ajay? Thank you, Matt. And good afternoon, everyone.
Speaker Change: In parallel we've reoriented, our customer success organization to align with this expansion. Our team is now delivering specialized journeys tailored to each customer's specific use case and deployment needs. We're also prioritizing strategic accounts with high potential for long term growth reinforcing our land and expand strategy and building durable customer.
Ajay Amlani: This quarter marks the beginning of a strategic transformation. With a renewed focus on durable, scalable growth, we've introduced a bold, streamlined go-to-market strategy aimed at unlocking new and more substantial revenue streams and addressable markets. This transformation began in February, and we are already seeing meaningful improvements in our pipeline and deal flow. We are speaking to the who's who of the technology industry about their intent to deploy biometrics at scale and the improvements they expect to receive by doing so. We are well-positioned with the right science-forward solutions and the right customer-obsessed associates to capture and grow these opportunities.
Bryan Crouse: <unk>.
Bryan Crouse: We are building a focused measurable and scalable commercial engine that aligns with our strategic priorities.
Bryan Crouse: At the core of this is a science forward approach to selling one that emphasizes aware its technical leadership solution orientation and problem solving capabilities rather than pushing product in.
Speaker Change: <unk> relationships.
Speaker Change: We're also laying the foundation for our platform based future awareness platform will enable customers to orchestrate solutions across various partners and providers, giving them access to the best algorithms and capabilities for their needs.
Bryan Crouse: In parallel we've reoriented, our customer success organization to align with this expansion. Our team is now delivering specialized journeys tailored to each customer's specific use case and deployment needs. We're also prioritizing strategic accounts with high potential for long term growth reinforcing our land and expand strategy and building durable customer.
Speaker Change: Other than locking customers into a proprietary stack. We're building an open flexible and science led architecture. This represents a fundamentally new model for the biometrics industry, one that differentiates aware today and positions us for leadership into the future in short we're combining aware has proven legacy with a modern customer centric platform.
Ajay Amlani: We've taken clear, focused steps to sharpen execution, concentrate on high-potential segments, and strengthen the foundation for scalable growth.
Ajay Amlani: Then stepping into the CEO role 90 days ago, our focus has been building the foundation for durable, sustainable growth. On our last call, I outlined three strategic priorities to guide that effort. Deepened Strategic Partnerships, Advanced Core Technology, Scale the Business Thoughtfully and Sustainably. Today, I'd like to walk you through our progress on First, deepening strategic partnerships. In Q1, we realigned our go-to-market model to prioritize high-impact customers and sectors where biometric authentication is mission critical. That work is already bearing fruit. We're now in active conversations with several Fortune 500 companies, relationships that simply didn't exist three months On the public sector side, we're preparing for several high impact opportunities tied to national security, border modernization, and digital identity initiatives.
Bryan Crouse: <unk> relationships.
Bryan Crouse: We're also laying the foundation for our platform based future awareness platform will enable customers to orchestrate solutions across various partners and providers, giving them access to the best algorithms and capabilities.
Speaker Change: Strategy and our focus go to market unlocking significant new growth opportunities in the quarters and years ahead with that I'll turn the call back over to a J.
Bryan Crouse: Their needs rather than locking customers into a proprietary stack. We're building an open flexible and science led architecture. This represents a fundamentally new model for the biometrics industry, one that differentiates aware today and positions us for leadership into the future in short we're combining aware has proven legacy with a modern <unk>.
J Bonney: Thanks, Brian we are operating with clear priorities renewed leadership and a sharp focus on disciplined execution, we understand the foundational work required to reposition aware and we're leaning into it with urgency and discipline in Q1, we added key leadership talent ignited our commercial strategy and transformed our platform into a more.
Speaker Change: Customer centric platform strategy and our focus go to market unlocking significant new growth opportunities in the quarters and years ahead with that I'll turn the call back over to AJ.
J Bonney: Customer centric science driven offerings. We also took meaningful steps to modernize our brand and increase our visibility in the markets that matter. Most as we look ahead to the remainder of 2025 and into 2026, we are confident that the strategic groundwork we've laid crowded in market alignment operational rigor and differentiate.
AJ: Thanks, Brian we are operating with clear priorities renewed leadership and a sharp focus on disciplined execution, we understand the foundational work required to reposition aware and we're leaning into it with urgency and discipline in Q1, we added key leadership talent ignited our commercial strategy and transformed our platform into a more.
Ajay Amlani: We continue to see strong interest in citizen services and public safety, where secure, scalable biometric solutions are becoming increasingly important.
J Bonney: And technology positions aware to lead not just participate in the next wave of biometric innovation. Our goal is not only to return to growth, but also to define what best in class execution looks like in this evolving industry.
Ajay Amlani: We also significantly strengthened our leadership team. Brian Krause joined us as Chief Revenue Officer, bringing over a decade of leadership experience across ENCODE, Veris, and anything. Brian has led high-performing teams, closed multi-million dollar deals, and built deep partnerships across government and enterprise. He and I have a long-standing working relationship which allows for seamless coordination and We also appointed Gary Eby as chairman of the board. Gary is a former IBM executive and cybersecurity expert with deep experience advising federal agencies and global enterprise. He's already played a pivotal role in our strategic alignment. and brings the kind of governance and strategic discipline that will serve us well in this next phase.
AJ: Customer centric science driven offerings. We also took meaningful steps to modernize our brand and increase our visibility in the markets that matter. Most as we look ahead to the remainder of 2025 and into 2026, we are confident that the strategic groundwork we've laid grounded in market alignment operational rigor and differentiator.
J Bonney: Stepping back there are a few key takeaways that underscore the progress, we're making and where we're headed.
J Bonney: First we are executing.
J Bonney: Against a defined set of strategic priorities with a leadership team built for transformation.
AJ: Technology positions aware to lead not just participate in the next wave of biometric innovation. Our goal is not only to return to growth, but also to define what's best in class execution looks like in this evolving industry.
J Bonney: Our pipeline is growing, particularly with large long cycle opportunities across both government and enterprise markets.
J Bonney: We've rebuilt the foundation from brand and platform to sales execution and customer engagement and finally, while 2025 of the transitional year by design. We are building the momentum to exit the year stronger and position wherever durable sustainable growth.
AJ: Stepping back there are a few key takeaways that underscore the progress, we're making and where.
AJ: We are headed.
AJ: We're executing on.
Ajay Amlani: These leadership changes reflected deliberate shift in how we intend to operate going forward. The board recognized the need for a major reset to install leadership capable of executing a disciplined commercialization strategy, strengthening our sales process and instilling clear operational vigor. Our mandate is to move forward with transparency, realistic goal setting, and a clear focus on converting aware technological experience into sustained shareholder value.
AJ: Against a defined set of strategic priorities with a leadership team built for transformation.
J Bonney: We look forward to updating you on our continued progress during our Q2 call that concludes our prepared remarks, we'll now open the call for questions.
AJ: Our pipeline is growing, particularly with large long cycle opportunities across both government and enterprise market.
J Bonney: Matt Please provide the instructions.
AJ: Third we've rebuilt the foundation from brand and platform to sales execution and customer engagement and finally, while 2025 of the transitional year by design. We are building the momentum to exit the year stronger and position wherever durable sustainable growth.
Speaker Change: Thank you a J as a reminder, you can submit a question using the built in ask a question feature in the webcast player.
J Bonney: Please hold while we populate the questions.
J Bonney: Our first question will aware continue to pursue growth in annual recurring revenues via sales of the aware I'd product. If yes, what do you expect to change between the immediate future in the last three years, where no measurable revenue growth progress has been made.
Ajay Amlani: This strategic alignment with the board has enabled us to move quickly and decisively as we reposition the company for a long term Second, we're advancing our core technology. We've begun consolidating our efforts under the awareness platform, a unified architecture that integrates our core biometric capabilities with best in class third party algorithms where needed. This enables us to deliver optimal outcomes to customers while continuously strengthening our own models with data in We've also revitalized our brand presence. The Aware name is now at the center of our identity. Modern, clean, and focused. We've rebuilt our demand generation engine, increased our visibility at key industry events, and elevated our presence in Washington, D.C.
AJ: We look forward to updating you on our continued progress during our Q2 call that concludes our prepared remarks, we'll now open the call for questions. Matt. Please provide the instructions.
Matt: Thank you a J as a reminder, you can submit a question using the built in ask a question feature in the webcast player.
Speaker Change: 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 or biometrics are becoming mission critical we're now solution first engaging directly with senior decision makers on.
AJ: Please hold while we populate the questions.
AJ: Our first question will aware continue to pursue growth in annual recurring revenues via sales of the aware I'd product. If yes, what do you expect to change between the immediate future in the last three years, where no measurable revenue growth progress has been made.
J Bonney: Eyes wide risk mitigation fraud prevention and digital identity modernization.
J Bonney: We are aligning our technology across the full portfolio to deliver scalable high impact solutions, our customers need the most.
AJ: 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 versus engaging directly with senior decision makers on enterprise.
J Bonney: Sure.
Ajay Amlani: through new federal lobbying.
J Bonney: Our next question as it were.
Ajay Amlani: Third, scaling thoughtfully and sustainable. We've instilled a culture of radical transparency and accountability. We redesigned the sales organization, implemented consistent pricing and pipeline processes, and refocused our customer service. Team on Renewals and Strategic Expansion Opportunities. So while our Q1 results reflect a business in transition, the underlying transformation is real and accelerating. We expect the first half of the year to remain foundational, but we are building momentum heading into the second half with a growing pipeline and stronger market.
We made progress in adding customers or growing sales on the AWS marketplace or any of the other partner programs.
AJ: Good risk mitigation fraud prevention and digital identity modernization.
J Bonney: Hi.
J Bonney: Thank you.
J Bonney: Our top priority of direct engagement with customers.
AJ: We're aligning our technology across the full portfolio to deliver scalable high impact solutions, our customers need the most.
J Bonney: Delivering science forward customer obsessed solutions to solve their most critical identity challenges.
J Bonney: Partners like AWS and others can complement our efforts Sylvia.
AJ: Our next.
J Bonney: Still we are selective we will only work with partners, who share our mindset at real strategic value.
AJ: So we've made progress in adding customers or growing sales on the AWS marketplace or any of the other partner programs.
J Bonney: And help us deliver the scalable high impact outcomes that our customers demand.
Jay: Thanks, Hey, Jay you mentioned active conversations with several fortune 500 companies.
David Traverse: With that foundation in place, I'll turn it over to David for a closer look at our Q1 financials. Over to you, David. Thank you, Ajay.
AJ: Thank you.
AJ: Our top priority of direct engagement with customers.
AJ: Delivering science forward customer obsessed solutions to solve their most critical identity challenges.
Speaker Change: Would you provide more color on the types of industries or use cases. These companies are exploring with the wares biometric solutions.
David Traverse: Let's take a look at our financial results for the first quarter, which ended on March 31, 2025. Total revenue was $3.6 million compared to $4.4 million in Q1 of last year. The year over year decrease was primarily driven by lower software licensing sales and a project driven and fluctuating period of period. Recurring Revenue was $2.7 million compared to $3.1 million in the prior year period. This year-over-year difference was due to the timing of subscription term license renewals. Moving down the income statement, operating expenses were reduced to $5.5 million, down 5% for $5.7 million in Q1 of 2025.
AJ: Partners like AWS and others can complement our efforts.
AJ: So we are selective we will only work with partners, who share our mindset at real strategic value.
Speaker Change: Sure.
We're seeing strong engagement across several industries, where secure seamless identity verification is becoming mission critical.
AJ: And help us deliver the scalable high impact outcomes that our customers demand.
Speaker Change: That includes financial services trusted networks E Commerce, 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.
Thanks, Hey, Jay you mentioned active conversations with several fortune 500 companies could.
AJ: Could you provide more color on the types of industries or use cases. These companies are exploring with the wares biometric solutions.
Speaker Change: Biometric provide a faster more secure and frictionless experience.
AJ: Sure.
AJ: We're seeing strong engagement across several industries, where secure CS identity verification is becoming mission critical that includes financial services.
Speaker Change: We're speaking directly with Ceos boards, and senior security leaders about enterprise risk mitigation.
David Traverse: Operating loss was 1.8 million compared to an operating loss of 1.3 million in the same prior year period. Gap net loss of $1.6 million or $0.08 per diluted share compared to gap net loss of $1 million or $0.05 per diluted share in Q1 of 2024. Our adjusted EBITDA loss for the quarter, which we recognized as a gap in our earnings release, was $1.5 million, compared to our adjusted EBITDA loss of $1 million in the prior year period. The decline was primarily due to the lower total revenue, slightly offset by reduced lower operating expenses. We continue to operate with discipline.
AJ: The networks E Commerce <unk>.
Speaker Change: Fraud prevention, and improving customer trough at scale.
AJ: <unk> care 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.
Speaker Change: Its a great validation of the transformation, we are driving with our awareness platform.
Speaker Change: Thanks, Sanjay how should we think about the timing and potential revenue contribution from some of the new strategic opportunities youre developing in the second half of 2025 and into 2026.
AJ: Biometric provide a faster more secure and frictionless experience.
AJ: We're speaking directly with Ceos boards, and senior security leaders about enterprise risk mitigation fraud.
Sanjay: Thanks, Matt I can take that one.
Speaker Change: While we don't give specific guidance.
AJ: I'd prevention and improving customer trough at scale.
Sanjay: For 2025 on revenue.
Sanjay: We're viewing 2025 really is that this foundational year for where with the new leadership.
AJ: Its a great validation of the transformation, we are driving with our awareness platform.
David Traverse: Over the past few quarters, we streamlined operations to set up our new leadership to invest in the right areas for future growth. That work has made us more efficient and put us in a stronger position to scale around our strategic priority. As we move through Q2 into the second half of 2025, we do expect expenses to rise, but really just returning to levels more in line with where they were a few quarters ago. These investments are deliberate and focused, and we believe they are critical to driving long-term sustainable growth.
Sanjay: And as we discussed on our last call and as Jay kind of emphasize today, but we're really trying to do is strengthen our go to market model focusing on high impact customers.
Speaker Change: Thanks, Sanjay how should we think about the timing and potential revenue contribution from some of the new strategic opportunities youre developing in the second half of 2025 and into 2026.
Sanjay: And rebuilding the pipeline aligned with where we can win.
Sanjay: Thanks, Matt I can take that one.
Sanjay: With that the sales can vary it.
Sanjay: While we don't give specific guidance for 2025 on revenue.
Sanjay: Can be a few months to fill 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.
Sanjay: We're viewing 2025 really is that this foundational year for where with the new leadership.
Sanjay: And as we discussed on our last call and as Jay kind of emphasize today.
Sanjay: Really trying to do is strengthen our go to market model focusing on high impact customers.
David Traverse: Now, finally, turn to the balance sheet. As of March 31st, 2025, we had cash equivalents and marketable securities tolling $24.8 million compared to $27.8 million on December 31st, 2024.
Sanjay: So we do expect some early wins later this year before more contributions to really build over time.
Sanjay: And rebuilding the pipeline in line with where we can win.
David: Thanks, David could.
Sanjay: With that so the sales Ao, Ken Barry can.
David: Can you expand on the awareness platform how does the open architecture approach differentiate aware from competitors and create a competitive advantage.
Sanjay: It 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.
Brian Krause: Now I'll hand the call over to our new CRO, Brian Krause. Welcome, Brian. Thank you, David. It's a privilege to join Aware at such a pivotal time in its transformation. I joined Aware because of its unmatched pedigree and biometrics, a 30 year history of pioneering research, deep technical expertise, and a trusted presence in some of the most demanding environments, particularly across US federal agencies. Our solutions are relied upon by organizations such as Department of Defense, Department of Homeland Security, and many others. Very few companies can say this, and it provides a strong foundation for durable, sustainable growth as we expand into new commercial and international markets.
David: Absolutely.
David: The awareness platform is a fundamental shift for both aware and for the biometrics industry.
Sanjay: So we do expect some early wins later this year before more contributions to really build over time.
David: Rather than force customers into a closed back we're offering open modular architecture, where they can orchestrate best in class algorithms through a unified platform.
Thanks, David could.
Speaker Change: Could you expand on the awareness platform how does the open architecture approach differentiate aware from competitors and create a competitive advantage.
David: That flexibility is very attractive to large enterprises and governments.
David: Want choice, they want scalability and they want future proofing.
Sanjay: Absolutely.
Sanjay: The awareness platform is a fundamental shift for both aware and for the biometrics industry.
David: It also allows us to gather valuable insights to improve our models continuously.
David: It's a science forward customer obsessed approach.
Sanjay: Rather than force customers into a closed back we're offering open modular architecture, where they can orchestrate best in class algorithms through a unified platform.
Brian Krause: Today, we're seeing unprecedented interest from Fortune 500 companies actively exploring and testing biometric solutions. This shift plays to Aware's strengths. Large enterprises increasingly recognize the urgency of securing digital interactions with fast, accurate, scalable, and science-driven technology. As fraud continues to rise across various sectors, biometrics is becoming a critical layer of defense. Importantly, our conversations now extend beyond security teams. We're speaking directly with CEOs and boards focused on enterprise risk. At the same time, the US federal government's commitment to biometric modernization remains strong, further enforcing our market opportunity.
David: And it's how we intend to lead the next wave of biometrics adoption.
Speaker Change: You talked about federal government momentum remaining strong are there specific programs or initiatives such as border monetization.
Sanjay: That flexibility is very attractive to large enterprises and governments.
Sanjay: Want choice, they want scalability and they want future proofing.
Speaker Change: July Danny where you feel particularly well positioned today.
Sanjay: It also allows us to gather valuable insights to improve our models continuously.
Sanjay: It's a science forward customer obsessed approach.
Speaker Change: We feel well positioned across the full U S government portfolio of opportunities U.
Sanjay: And it's how we intend to lead the next wave of biometrics adoption.
Speaker Change: U S Federal government remains our largest investor and biometric technologies globally.
Speaker Change: You talked about federal government momentum remaining strong are there specific programs or initiatives such as border monetization.
Speaker Change: We are strategically aligned with its long term priorities around secure digital identity.
Brian Krause: To capture this momentum, we're evolving and expanding Aware's go to market strategy. A key priority is replicating our success in the US federal sector across high growth commercial industries and international geographies. We're transforming our demand gen model by embedding domain experts to lead each market vertical, ensuring deeper engagement and relevance. We're building a focused, measurable and scalable commercial engine that aligns with our strategic priorities. At the core of this is a science forward approach to selling one that emphasizes awareness, technical leadership, solution orientation and problem solving capabilities, rather than pushing products. In parallel, we've reoriented our customer success organization to align with this expansion.
Sanjay: Our digital Danny where you feel particularly well positioned today.
Speaker Change: Digital modernization.
Speaker Change: And border innovation.
Speaker Change: Rather than focus on any single program, we're actually positioning aware as a trusted partner across a broad set of initiatives.
Sanjay: We feel well positioned across the full U S government portfolio of opportunities.
Speaker Change: Our secure scalable biometric authentication is critical.
Sanjay: U S Federal government remains our largest investor and biometric technologies globally.
Speaker Change: Strength lies improving providing.
Speaker Change: Proven flexible solutions that meet rigorous government standards, while enabling future ready architectures.
Sanjay: We are strategically aligned with its long term priorities around secure digital identity.
Sanjay: Digital modernization and border innovation.
Speaker Change: With our deep domain expertise science, driven approach and commitment to operational excellence. We believe we are exceptionally well positioned to support the evolving needs.
Sanjay: Rather than focus on any single program, we're actually positioning aware as a trusted partner across a broad set of initiatives.
Speaker Change: Federal government agencies over the coming years, especially being one of the only biometrics providers headquartered here in the United States.
Sanjay: Our secure scalable biometric authentication is critical.
Speaker Change: Strength lies improving providing.
Brian Krause: Our team is now delivering specialized journeys tailored to each customer's specific use case and deployment needs. We're also prioritizing strategic accounts with high potential for long term growth, reinforcing our land and expand strategy, and building durable customer relationships.
Speaker Change: Proven flexible solutions that meet rigorous government standards, while enabling future ready architectures.
Speaker Change: In our headquarters in the Boston area.
Speaker Change: Thanks J J.
Speaker Change: With the new leadership team in place and the revamped go to market strategy.
Speaker Change: With our deep domain expertise science, driven approach and commitment to operational excellence. We believe we are exceptionally well positioned to support the evolving needs.
Speaker Change: But early indicators are you seeing that gives you confidence it whereas on the right trajectory for scalable sustainable growth.
Brian Krause: We're also laying the foundation for a platform-based future. The Awareness Platform will enable customers to orchestrate solutions across various partners and providers, giving them access to the best algorithms and capabilities for their needs. Rather than locking customers into a proprietary stack, we're building an open, flexible, and science-led architecture. This represents a fundamentally new model for the biometrics industry, one that differentiates Aware today and positions us for leadership into the future.
Speaker Change: Federal government agencies over the coming years, especially being one of the only biometric providers headquartered here in the United States and.
Speaker Change: We're actually seeing tangible progress on several fronts.
Speaker Change: First our pipeline is materially expanded over the last 90 days.
Speaker Change: In our headquarters in the Boston area.
Speaker Change: Including opportunities with Fortune 500 companies and also new federal programs.
Speaker Change: Thanks, a J.
Speaker Change: With the new leadership team in place and the revamped go to market strategy.
Speaker Change: We've installed the leadership team necessary to drive disciplined execution.
Speaker Change: But early indicators are you seeing that gives you confidence it whereas on the right trajectory for scalable sustainable growth.
Speaker Change: Brian joining as our CRO, our full sales and customer success realignment and a marketing reboot to modernize our brand and demand generation.
Brian Krause: In short, we're combining Aware's proven legacy with a modern, customer-centric platform strategy and a focused go-to-market, unlocking significant new growth opportunities in the quarters and years ahead.
Speaker Change: We're actually seeing tangible progress on several fronts.
Speaker Change: Third we're seeing growing inbound interest from customers, who recognize aware of technology leadership.
Speaker Change: Our pipeline is materially expanded over the last 90 days.
Speaker Change: A shift towards a science driven customer first model.
Speaker Change: Including opportunities with Fortune 500 companies and also new federal programs.
Ajay Amlani: With that, I'll turn the call back over to Ajay. Thanks, Brian. We are operating with clear priorities, renewed leadership and a sharp focus on disciplined execution. We understand the foundational work required to reposition aware, and we're leaning into it with urgency and discipline. In Q1, we added key leadership talent, ignited our commercial strategy, and transformed our platform into a more customer centric, science driven offering. We also took meaningful steps to modernize our brand and increase our markets that matter most. As we look ahead to the remainder of 2025 and into 2026, we are confident that the strategic groundwork we've laid grounded in market alignment, operational rigor, and differentiated technology positions aware to lead, not just participate in the next wave of biometrics innovation.
Speaker Change: While 2025 remains a transitional year the momentum we're building gives us strong confidence we'll exit this year in a significantly stronger position.
Speaker Change: We've installed the leadership team necessary to drive disciplined execution.
Speaker Change: Brian joining as our CRO, our full sales and customer success realignment and a marketing reboot to modernize our brand and demand generation.
J Bonney: Thanks, a J at this time. This concludes our question and answer session. If your question wasn't answered. Please E mail <unk> IR team at AWP R E Gateway Dash GOP Dot com.
Speaker Change: We're seeing growing inbound interest from customers, who recognize aware of technology leadership and our shift towards a science driven customer first model.
Jay: I'd now like to turn the call back over to Jay for closing remarks.
Speaker Change: While 2025 remains a transitional year the momentum we're building gives us strong confidence we'll exit this year in a significantly stronger position.
Jay: Thank you all for joining us today and for your interest in aware. We are excited about the foundation, we are building and remain committed to delivering durable sustainable value in the years ahead.
Speaker Change: Thanks, Hey, Jay at.
Speaker Change: This time. This concludes our question and answer session. If your question wasn't answered. Please E mail <unk> IR team at AWP RFP at Gateway Dash GOP Dot com.
Jay: We look forward to updating you further on our west progress during our next webcast.
Jay: Thank you.
Speaker Change: I'd now like to turn the call back over to Jay for closing remarks.
Jay: Thanks, Hey, Jay.
Jay: 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> first quarter 2025 conference call you may now disconnect.
Ajay Amlani: Our goal is not only to return to growth, but also to define what best in class execution looks like in this evolving industry.
Jay: Thank you all for joining us today and for your interest in aware. We are excited about the foundation, we are building and remain committed to delivering durable sustainable value in the years ahead.
Ajay Amlani: Stepping back, there are a few key takeaways that underscore the progress we're making and where we're headed. First, we're executing against a defined set of strategic priorities with a leadership team built for transformation. Second, our pipeline is growing, particularly with large, long cycle opportunities across both government and enterprise markets. Third, we've rebuilt the foundation from brand and platform to sales execution and customer engagement. And finally, while 2025 is a transitional year by design, we are building the momentum to exit the year stronger and position aware for durable, sustainable growth.
Jay: We look forward to updating you further on our worst progress during our next webcast.
Jay: Thank you.
Jay: Thanks, Hey, Jay.
Speaker Change: 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> first quarter 2025 conference call you may now disconnect.
Ajay Amlani: We look forward to updating you on our continued progress during our Q2 call.
Ajay Amlani: That concludes our prepared remarks.
Matt Glover: We'll now open the call for questions. Matt, please provide the instructions. Thank you, Ajay.
Matt Glover: 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 question.
Ajay Amlani: Our first question, will Aware continue to pursue growth in annual recurring revenues via sales of the Aware ID product?
Ajay Amlani: 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? 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.
Speaker Change: Okay.
Ajay Amlani: We're now solution first, engaging directly with senior decision makers on enterprise-wide risk mitigation, fraud prevention, and digital identity modernization. for aligning our technology across the full portfolio to deliver scalable, high-impact solutions where customers need them most.
Ajay Amlani: Our next question, has Aware made progress in adding customers or growing sales on the AWS Marketplace or any of the other partner programs? Thank you. Our top priority is direct engagement with customers.
Ajay Amlani: Delivering science-forward, customer-obsessed solutions to solve their most critical identity Partners like AWS and others can complement our Bill, we are selective. We will only work with partners who share our mindset, add real strategic and help us deliver the scalable high-impact outcomes that our customers Thanks, Ajay.
Ajay Amlani: You mentioned active conversations with several Fortune 500 companies.
Ajay Amlani: Could you provide more color on the types of industries or use cases these companies are exploring with Aware's biometric solutions? Sure. Today, we're seeing strong engagement across several industries where secure, seamless identity verification is becoming That includes financial services, trusted networks, e-commerce, healthcare, travel and hospitality, and many other. The common thread is that large enterprises increasingly recognize that passwords and traditional authentication are no longer sufficient. Biometrics provide a faster, more secure, and frictionless experience. We're speaking directly with CEOs, boards, and senior security leaders about enterprise risk mitigation, fraud prevention, and improving customer trust at scale.
Ajay Amlani: It's a great validation of the transformation we're driving with our awareness platform. Thanks, Ajay.
Ajay Amlani: 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? Thanks, Matt.
David Traverse: I can take that one. While we don't give specific guidance for 2025 on revenue, We're viewing 2025 really as that this foundational year for We Are 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 cycle can vary, 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.
David Traverse: So we do expect some early wins later this year for more contributions to really build over time.
David Traverse: Thanks, David.
Ajay Amlani: Can you expand on the awareness platform? How does the open architecture approach differentiate aware from competitors and create a competitive advantage? Absolutely. The Awareness Platform is a fundamental shift for both aware and for the Rather than force customers into a closed back, 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 performance. It also allows us to gather valuable insights to improve our models. It's a science-forward, customer-obsessed approach.
Ajay Amlani: And it's how we intend to lead the next wave of biometric You talked about federal government momentum remaining strong. Are there specific programs or initiatives such as border monetization? Digital Identity, where you feel particularly well positioned today. We feel well-positioned across the full U.S. government portfolio of The US federal government remains a large 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.
Ajay Amlani: Our Strength Lies in Proving, Providing Proven flexible solutions that meet rigorous government standards while enabling future-ready architecture.
Ajay Amlani: With our deep domain expertise, science driven approach, and commitment to operational excellence, we believe we're exceptionally well positioned to support the evolving needs of federal government agencies over the coming years, especially being one of the only biometrics providers headquartered here in the United States, in our headquarters in the Boston Thanks, Ajay.
Ajay Amlani: With the new leadership team in place and the revamped go to market strategy, what early indicators are you seeing that give you confidence awareness on the right trajectory for scalable, sustainable growth? We're actually seeing tangible progress on several. First, our pipeline has materially expanded over the last 90 days. Including opportunities with Fortune 500 companies and also new federal Second, we've installed the leadership team necessary to drive discipline. 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 towards a science-driven, customer-first model.
Ajay Amlani: While 2025 remains a transitional year, the momentum we're building gives us strong confidence. We'll exit this year and significantly stronger.
Ajay Amlani: Thanks, Ajay.
Matt Glover: At this time, this concludes our question and answer session.
Matt Glover: If your question wasn't answered, please email AWARE's IR team at awre-grp.com.
Ajay Amlani: And now I'd like to turn the call back over to Ajay for closing remarks. Thank you all for joining us today and for your interest in AWARE. We are excited about the foundations we are building and remain committed to delivering durable, sustainable value in the years ahead. We look forward to updating you further on AWARE's progress during our next webcast. Thank you. Thanks, Ajay.
Matt Glover: I'd like to remind everyone that a recording of today's call will be available for replay via link in the investor section of the company's website. Thank you for joining us today for AWARE's first quarter 2025 conference call.
Matt Glover: You may now disconnect.