Q2 2025 Aware Inc Earnings Call
Yeah.
Good afternoon, and welcome to where second quarter 2025 conference call.
Today are the company's CEO and President J M Larney, CFO, David <unk> and CFO, Brian Crouse.
Matt Glover: Good afternoon, and welcome to Aware's Q2 2025 conference call. Joining us today are the company's CEO and President, Ajay Amlani, CFO, David Traverse, and CRO, Brian Krause. Following their remarks, we'll 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 today's call, I'd like to remind everyone that the presentation contains forward-looking statements that are based on the current expectations of Aware's 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. This paragraph emphasizes the major uncertainties and risks inherent in forward-looking statements that management will be making today.
Our in our remarks, we will open the call to questions.
Would like to submit a question you can do so at any time using the built in ask a question feature cast player.
Before we begin todays call I'd like to remind everyone that the presentation contains forward looking statements that are based on the current expectations of <unk> management and involve inherent risks and uncertainties that could cause actual results to differ materially from those described.
This trend should please take note of the Safe Harbor paragraph that is included at the end of today's press release.
This paragraph emphasizes the major uncertainties and risks inherent in forward looking statements that management will be making today.
Or wishes to caution you that there are factors that could cause actual results to differ materially from those results 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.
Matt Glover: Aware wishes to caution you that there are factors that could cause actual results to differ materially from those results 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, quarterly reports on Form 10-Q. 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, 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. Additionally, this call contains certain non-GAAP financial measures as the term is defined by the SEC in Regulation G.
Quarterly reports on Form 10-Q.
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 aware and it takes 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.
Additionally, this call contains certain non-GAAP financial measures as the term is defined by the SEC regulation G.
non-GAAP financial measures should not be considered in isolation from or as a substitute for financial information presented in compliance with GAAP.
Accordingly, or where 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.
Matt Glover: Non-GAAP financial measures should not be considered in isolation from or as a substitute for financial information presented in compliance with GAAP. 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'd like to remind everyone that the presentation will be recorded and made available for replay via a link available in the investor relations section of the company's website. I'd like to turn the call over to Aware's CEO and President, Ajay Amlani. Ajay.
I would like to remind everyone that the 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 to our CEO and President AGM money.
Hey, Jay.
Thank you, Matt and good afternoon, everyone. This quarter marked another step forward in our strategic transformation. We began earlier. This year. We are building a durable scalable business grounded in operational rigor market alignment and differentiated technology. Since February we've laid the foundation for future growth through deeper customer engagement enhancements to our industry leading technology.
Ajay Amlani: Thank you, Matt, and good afternoon, everyone. This quarter marked another step forward in the strategic transformation we began earlier this year. We're building a durable, scalable business grounded in operational rigor, market alignment, and differentiated technology. Since February, we've laid the foundation for future growth through deeper customer engagement, enhancements to our industry-leading technology, and strategic hires that reinforce our science-forward, customer-obsessed approach to go-to-market execution. At the core of our transformation is Aware's deep-rooted expertise and three decades of innovation in biometric technology. From pioneering fingerprint and facial recognition to leading in passive liveness and multimodal identity platforms, we've consistently earned the trust of some of the world's most security-conscious institutions. Our proven track record across both public and private sectors gives us a unique advantage in today's market, where trust, performance, and interoperability are paramount.
And strategic hires that reinforce our science forward customer obsessed approach to garner go to market execution.
At the core of our transformation is aware is deep rooted expertise and three decades of innovation and biometric technology from pioneering fingerprint and facial recognition to leading in passive liveliness and multimodal identity platforms. We've consistently earn the trust of some of the world's most security conscious institutions are pre.
<unk> track record across both public and private sectors gives us a unique advantage in today's market, where trust performance and interoperability are paramount.
As we've engaged with customers, we have identified new opportunities to be their trusted technology partner and biometric, helping transform data into actionable intelligence.
Ajay Amlani: As we've engaged with customers, we have identified new opportunities to be their trusted technology partner in biometrics, helping transform data into actionable intelligence. To meet a growing market need, we've harnessed the power of our core technology and repositioned our product suite as the Awareness Platform. This evolution allows us to deploy our capabilities in new and innovative ways, including strategic partnerships with customers and best-in-class providers. The result for customers is greater flexibility to deliver fast, accurate verification to help fight fraud, prove humanity, and protect revenue with confidence. In Q2, we achieved best-in-class performance in the Department of Homeland Security's Remote Identity Validation technology demonstration for passive liveness detection. This is one of the most rigorous biometric benchmarks in the world, and Aware excelled. Our solution stood out for its strength in combating identity fraud and reducing friction.
To meet a growing market need we've harnessed the power of our core technology and repositioned our product suite as the awareness platform.
This evolution allows us to deploy our capabilities in new and innovative ways, including strategic partnerships with customers and best in class providers. The result for customers with greater flexibility to deliver fast accurate verification to help fight fraud proved humanity and protect revenue with confidence.
In Q2, we achieved best in class performance and the department of Homeland Security's remote identity validation technology demonstration for passive liveliness detection. This is one of the most rigorous biometric benchmarks in the world and aware itself our solutions stood out for its strength in combating identity fraud and reducing friction.
These results validate not only our evolving technology, but also our ability to meet real world performance requirements for secure seamless identity verification in the ever changing identity fraud landscape. We also received strong third party validation of our technology technological prowess, we were recognized as a luminaire.
Ajay Amlani: These results validate not only our evolving technology, but also our ability to meet real-world performance requirements for secure, seamless identity verification in the ever-changing identity fraud landscape. We also received strong third-party validation of our technological prowess. We were recognized as a luminary in core identity technology in the Prism Project's Deepfake and Synthetic Identity Report, an independent evaluation of over 200 organizations. Aware was specifically recognized for standout capabilities in deepfake detection, injection detection, and both active and passive liveness, highlighting the depth of our science and the sophistication of our Awareness Platform. These validations underscore that we're not just keeping pace with the market, but rather helping shape it. Through continuous product innovation and independent validation, Aware is becoming the trusted biometric infrastructure partner for governments and global enterprises alike. As we outlined last quarter, advancing our core technology remains a central focus for our transformation strategy.
<unk> and core identity technology in the prism projects deep fake and synthetic identity report and independent evaluation of over 200 organizations.
Wherewith, specifically recognized for standout capabilities and defect detection injection detection in both active and passive liveliness highlighting the depth of our science and the sophistication of our awareness platform. These validation underscore that we're not just keeping pace with the market, but rather helping shape it.
Though continuous through continuous product innovation and independent validation, where is becoming the trusted biometric infrastructure partner for government and global enterprises alike. As we outlined last quarter advancing our core technology remains a central focus for our transformation strategy.
In Q2, we continued to focus on our first pillar of transformation to enhance our awareness platform our system agnostic infrastructure that integrates the best in class biometric algorithms into a single interoperable rapidly deployable solution.
Ajay Amlani: In Q2, we continued to focus on our first pillar of transformation to enhance our Awareness Platform, our system-agnostic infrastructure that integrates the best-in-class biometric algorithms into a single interoperable, rapidly deployable solution. We improved both facial matching speed and mobile face capture reliability, allowing for a more frictionless user experience. These improvements reflect our science-forward approach, our focus on scalability, and our decades of experience. With large commercial enterprises struggling to build this internally, our platform will give the market a plug-and-play biometric security solution that can be deployed in weeks. To support and accelerate this market opportunity, we further strengthened our leadership team. This quarter, we welcomed Lona Terian as Chief Marketing Officer.
We improved both facial matching speed in mobile face capture reliability, allowing for a more frictionless user experience. These improvements reflect our science forward approach, our focus on scalability and our decades of experience.
With large enterprises struggling to build this internally our platform will give the market a plug and play biometric security solution that can be that can be deployed in a week.
Support and accelerate this market opportunity. We further strengthened strengthened our leadership team this quarter, we welcomed lona terrien as chief marketing officer.
With over 15 years of cyber security and marketing experience Lona has a proven track record of building high performing teams driving demand and strengthening brand visibility her leadership. The company has like extra hub cyber reason main cast RSA and symantec, reflecting deep industry expertise and a data driven.
Ajay Amlani: With over 15 years of cybersecurity marketing experience, Lona has a proven track record of building high-performing teams, driving demand, and strengthening brand visibility. Her leadership at companies like ExtraHop, Cybereason, Mimecast, RSA, and Symantec reflects deep industry expertise and a data-driven customer-first approach. Her expertise is already helping amplify our voice and drive stronger engagement across both the enterprise and government sectors. We anticipate that Lona's leadership will be instrumental in increasing brand visibility, accelerating pipeline velocity, and generating more consistent marketing source demand in H2. The second pillar of our transformation is continuing to strengthen our go-to-market strategy to scale the business thoughtfully and sustainably. We're executing effectively against our 2025 plan, with strong momentum across both the pipeline and our strategic accounts. To improve win rates and accelerate the onboarding of key customers, we're making targeted investments in critical areas.
Customer first approach.
Our expertise is already helping amplify our voice and drive stronger engagement across both the enterprise and government sectors. We anticipate that loan his leadership will be instrumental in increasing brand visibility accelerating pipeline velocity and generating more consistent marketing source demand in the second half of the year.
The second pillar of our transformation is continuing to strengthen our go to market strategy to scale the business thoughtfully and sustainably, we're executing effectively against our 2025 plan with strong momentum across both the pipeline and our strategic accounts to improve win rates and accelerated onboarding of key customers, we're making targeted investments in.
Critical areas.
It's intentional and disciplined approach to spending as designed to derisk long cycle opportunities and position us for accelerated revenue growth in the latter half of 2025.
Ajay Amlani: This intentional and disciplined approach to spending is designed to de-risk long cycle opportunities and position us for accelerated revenue growth in the latter half of 2025. The final pillar of our strategy is deepening our strategic partnerships across both the public and commercial sectors. This quarter, we expanded our presence in the federal space by engaging external experts to support our strategic positioning and drive opportunity development within key US government agencies. These efforts are aimed at increasing our visibility and alignment with government priorities, ultimately strengthening our public sector opportunity pipeline. In addition, we expanded our federal footprint internationally. In Q2, we secured national ID programs for two Middle Eastern governments. These contracts were secured through a new partner, highlighting the strength of our growing network and customer success team.
The final pillar of our strategy is deepening our strategic partnerships across both the public and commercial sectors.
This quarter, we expanded our presence in the federal space by engaging external experts to support our strategic positioning and drive opportunity development within key U S government agencies.
These efforts are aimed at increasing our visibility and in alignment with government priorities ultimately strengthening our public sector opportunity pipeline.
In addition, we extended our federal footprint internationally and.
In Q2, we secured nationally D programs for two middle Eastern governments. These contracts were secured through our new partner highlighting the strength of our growing network and customer success team a.
A key customer secured this quarter with a top 15 global financial institution, marking the.
Expansion of aware in the commercial sector.
Ajay Amlani: A key customer secured this quarter was a top 15 global financial institution, marking the continued expansion of Aware in the commercial sector. Our customer-obsessed go-to-market execution is translating into real wins and a growing pipeline of meaningful opportunities across our target markets. We're building real momentum and doing it with customers that understand the strategic value of what we're offering, and in particular, the uniqueness of our Awareness Platform. With that, I'll turn it over to David for a closer look at our Q2 financials. Over to you, David.
Our customer obsessed and go to market execution is translating into real wins and a growing pipeline of meaningful opportunities across our target markets. We're building real momentum and doing it with customers that understand the strategic value of what we're offering and in particular, the uniqueness of our awareness platform.
With that I'll turn it over to David for a closer look at our Q2 financials.
Over to you David.
Thank you a J.
I'll walk you through our financial results for the second quarter that ends on June 30 of 2025.
Total revenue for the quarter was $3 9 million.
David Traverse: Thank you, Ajay. I'll walk you through our financial results for Q2 that ended on 30 June 2025. Total revenue for Q2 is $3.9 million, compared to $4.3 million in the prior year period. The year-over-year decrease was largely the result of timing of perpetual licensed sales. We mentioned in our last call, we expect revenue to fluctuate as we execute Aware strategic transformation, all of which is building a foundation for sustainable future growth. Recurring revenue increased 2% year over year to $2.7 million for Q2. The slight increase was primarily due to increased software maintenance. Moving down the income statement, operating expenses were $5.9 million, compared to $5.7 million in Q2 2024. The increase is the result of expanding the Aware team, particularly the key executive leaders we've hired throughout the year to accelerate growth.
<unk> $4 3 million in the prior year period.
The year over year decrease was largely the result of timing of perpetual license sales.
As we mentioned in our last call. We expect revenue will fluctuate actually execute aware strategic transformation all of which is building a foundation for sustainable future growth.
Recurring revenue increased 2% and year over year to $2 7 million for the second quarter, a slight increase was primarily due to increased software maintenance.
Moving down the income statement operating expenses were $5 9 million compared to $5 7 million in Q2 of 2024.
The increase was a result of expanding aware team, particularly the key executive leaders, we've hired throughout the year to accelerate growth.
Operating loss was $2 million compared to an operating loss of $1 3 million in the prior year period.
GAAP net loss was $1 8 million or <unk> <unk> per diluted share compared to GAAP net loss of $1 1 million or <unk> <unk> per diluted share in the same year ago period.
David Traverse: Operating loss was $2 million, compared to an operating loss of $1.3 million in the prior year period. GAAP net loss was $1.8 million, or $0.08 per diluted share, compared to GAAP net loss of $1.1 million or $0.05 per diluted share in the same year-ago period. Adjusted EBITDA loss for Q2, which will reconcile the GAAP net income in our earnings release, was $1.4 million, compared to an adjusted EBITDA loss of $1 million in Q2 2024. The year-over-year increase in adjusted EBITDA loss was attributed to lower revenue, as discussed above. Turning to our financial results for the 6 months ended 30 June 2025, total revenue was $7.5 million, compared to $8.7 million in H1 2024, and recurring revenue was $5.4 million, compared to $5.9 million in H1 2024.
Adjusted EBITDA loss for Q2 were direct.
While the GAAP net income in our earnings release was $1 4 million.
From an adjusted EBITDA loss of $1 million second quarter of 2024.
The year over year increase in adjusted EBITDA loss was attributed to lower revenue as discussed above.
Turning to our financial results for the six months ended June 32025.
Total revenue was $7 5 million compared to $8 $7 million of price half of 2024.
And our recurring revenue was $5 4 million compared to $5 9 million in the first six months of 2024.
The year over year decrease in revenue was the result of timing of perpetual license sales as well as the impact to recurring revenue of some customers right sizing their transaction prepayments.
David Traverse: The year-over-year decrease in revenue was the result of timing of perpetual license sales, as well as the impact to recurring revenue of some customers rightsizing their transaction prepayments based on prior year usage. Our operating expenses were flat year over year at $11.3 million. Operating loss of $3.8 million, compared to an operating loss of $2.6 million in the prior year period. Net loss was $3.4 million, or $0.16 per diluted share, compared to a net loss of $2.1 million or $0.10 per diluted share at the same year-ago period. Adjusted EBITDA loss was $3 million, compared to adjusted EBITDA loss of $1.9 million in H1 2024. Transitioning now to the balance sheet. As of 30 June 2025, we had cash equivalent, and marketable securities totaling $23.7 million, compared to $27.8 million as of 31 December 2024.
Just on prior year usage.
Our operating expenses were flat year over year or $11 3 million.
Operating loss of $3 8 million compared to an operating loss of $2 6 million in the prior year period.
Net loss was $3 4 million or <unk> 16 per diluted share return net loss of $2 1 million or <unk> 10 per diluted share the same year ago period.
Adjusted EBITDA loss was $3 million compared to adjusted EBITDA loss of $1 9 million in the first half of 2024.
Transitioning now to the balance sheet as of June 32025, we had cash cash equivalents and marketable securities totaling $23 7 million to $27 8 million as of December 31st 2024.
We remain well capitalized and our strong balance sheet provides the flexibility to continue investing with purpose.
In the months ahead, we will focus on spending on areas that directly support growth.
David Traverse: We remain well capitalized, and our strong balance sheet provides the flexibility to continue investing with purpose. In the months ahead, we will focus on spending on areas that directly support growth, including customer success and commercial execution. These investments are designed to accelerate pipeline conversion, improve onboard readiness, and create long-term value. We are monitoring progress closely to ensure spending stays disciplined and aligned with revenue opportunities. While the H1 reflected a transitional phase of our business, we're beginning to see early traction from the foundational work completed across our go-to-market strategy, leadership additions, and platform enhancements. These efforts are starting to generate signs of momentum that we believe will translate into improved revenue performance as we exit 2025. With that, I'll turn our call over to our Chief Revenue Officer, Brian Krause. Brian?
Including customer success and commercial execution.
These investments are designed to accelerate.
Klein conversion improve onboard readiness and create long term value.
We are monitoring progress closely to ensure our spending stays disciplined and aligned with revenue opportunities.
Although first half reflected a transitional phase our business arguably as the early traction from our foundational work completed across our go to market strategy.
Leadership additions and platform enhancements.
These efforts are starting to generate some momentum that we believe will translate into improved revenue performance as we exit 2025.
With that I'll turn our call over to our Chief revenue Officer, Bryan Krug Bryan.
Thank you David.
When I joined aware, we set out to bring discipline accountability and scalability to our go to market plan and we're already making great progress on this front, our pipeline value and potential opportunities have increased significantly last quarter. We introduced the awareness platform and have already made meaningful technical progress are garnering strong interest from the commercial sector.
Brian Krause: Thank you, David. When I joined Aware, we set out to bring discipline, accountability, and scalability to our go-to-market plan. We're already making great progress on this front. Our pipeline value and potential opportunities have increased significantly. Last Q, we introduced the Awareness Platform. We have already made meaningful technical progress while garnering strong interest from the commercial sector. Our Awareness Platform serves as a system-agnostic biometric infrastructure that delivers fast, flexible, and secure identity capabilities at scale. In Q2, we introduced a series of performance and usability enhancements that further strengthen its position as an enterprise-grade solution. Key updates included a 14 times improvement in face matching speed through optimization of our one-to-N search algorithm, significantly reducing response times for high-volume identity checks.
Our awareness platform serves as a system agnostic biometric infrastructure that delivers fast flexible and secure identity capabilities at scale in the second quarter, we introduced a series of performance and usability enhancements that further strengthened its position as an enterprise grade solution.
Key updates included a 14 times improvement in face matching speed through optimization of our one to end search algorithm significantly reducing response times for high volume identity checks, but mobile face capture function was also enhanced with improved <unk> and motion detection dynamic positioning guidance and refine liveliness prompts leading to high.
Brian Krause: The mobile face capture function was also enhanced with improved blur and motion detection, dynamic positioning guidance, and refined liveness prompts, leading to higher first-time capture rates and lower user drop-off across a range of devices and conditions. These upgrades are already being deployed in customer pilots and delivering measurable gains in throughput, reliability, and user experience. By improving both web and mobile performance, the Awareness Platform is becoming even more deployable and resilient, a clear differentiator for enterprise and government customers building identity systems that must perform at scale. The innovativeness of the Awareness Platform, in conjunction with our marketing, sales, and customer success initiatives, has intensified customer engagement. This quarter, our sales team advanced enterprise deals with several Fortune 500 companies across a range of sectors.
Here first time capture rate, a lower user drop off across a range of devices and conditions.
These upgrades are already being deployed and customer pilots and delivering measurable gains in throughput reliability and user experience by improving both web and mobile performance. The awareness platform is becoming even more deployable and resilient a clear differentiator for enterprise and government customers building identity systems that must perform at scale.
Innovative newness of the awareness platform in conjunction with our marketing sales and customer success initiatives has intensified customer engagement. This quarter, our sales team advanced enterprise deals with several fortune 500 companies across a range of sectors, notably we're nearing contract finalization with a digital identity wallet provider and are actively engaged.
With one of the worlds largest and most influential financial institutions with whom we expect to begin testing in the third quarter. Additionally, we initiated conversations with a global digital marketplace that serves the consumer services sector and our first major U S Airport.
Brian Krause: Notably, we're nearing contract finalization with a digital identity wallet provider and are actively engaged with one of the world's largest and most influential financial institutions with whom we expect to begin testing in Q3. Additionally, we initiated conversations with a global digital marketplace that serves the consumer services sector and our first major US airport. Momentum is also building across our federal government relationships. Agencies are ramping up their use of biometrics and modernizing legacy systems, creating new opportunities for our core offerings, including Awareness Platform. Separately, we're seeing continued traction within the law enforcement market, where our ABIS product is being used to support large-scale multi-agency identity workflows. These parallel efforts highlight the expanding demand for both secure identity management and scalable biometric infrastructure across different segments of the public sector.
Momentum is also building across our federal government relationships agencies.
Agencies are ramping up their use of biometrics and modernizing legacy systems, creating new opportunities for our core offerings, including awareness platform.
Separately, we're seeing continued traction within the law enforcement market, where our avis product is being used to support large scale multi agency identity workflows. These parallel efforts highlight the expanding demand for both secure identity management and scalable biometric infrastructure across different segments of the public sector.
Our late stage pipeline is growing in both value and quality with many opportunities progressing beyond discussion and into well structured buying processes that include clear budgets and timelines. This includes deals moving through pricing contracting and proof of value testing stages, our confidence has reinforced that the second half of 2025.
Brian Krause: Our late-stage pipeline is growing in both value and quality, with many opportunities progressing beyond discussion and into well-structured buying processes that include clear budgets and timelines. This includes deals moving through pricing, contracting, and proof-of-value testing stages. Our confidence is reinforced that H2 2025 and 2026 will deliver meaningful revenue acceleration as these opportunities convert into production deployments. To support this growth, we continue to refine and professionalize our go-to-market strategy guided by two core principles, science-forward solutions and customer-obsessed execution. Our plug-and-play platform now incorporates best-in-class third-party technologies, allowing for more flexible and tailored deployments in a system-agnostic infrastructure with interoperability. Simultaneously, our customer success team is empowered to manage end-to-end solution delivery with greater speed and precision. This combination strengthens customer relationships, accelerates time to value, and drives expansion opportunities for Aware.
In 2026 will deliver meaningful revenue acceleration as these opportunities convert into production deployments.
To support this growth we continue to refine and.
Professionalize, our go to market strategy guided by two core principles.
Since forward solutions and customer obsessed execution, our plug and play platform now incorporates best in class third party technologies, allowing for more flexible and tailored deployments in our system agnostic infrastructure with interoperability.
Simultaneously our customer success team is empowered to manage end to end solution delivery with greater speed and precision. This combination strengthens customer relationships accelerate time to value and drives expansion opportunities for <unk>.
As I mentioned earlier, we are also seeing steady progress with several key accounts moving into testing and evaluation stages.
Brian Krause: As I mentioned earlier, we are also seeing steady progress with several key accounts moving into testing and evaluation stages. Engagement is deepening across both commercial and government sectors as we broaden our footprint across multiple verticals. Our ongoing focus on execution and onboarding is critical to maximizing pipeline conversion and ensuring long-term value creation. Both our sales and customer success teams have been strengthened, helping us to deeply understand each client's unique environment, enabling us to tailor and deploy solutions rapidly and effectively. This expertise allows us to offer an alternative to organizations trying to build these capabilities internally. By focusing on speed, interoperability, and reduced time to value, we are building stronger, more durable customer relationships, increasing expansion opportunities, and positioning Aware as the trusted partner for enterprise and government customers seeking scalable biometric solutions.
Engagement is deepening across both commercial and government sectors as we broadened our footprint across multiple verticals, our ongoing focus on execution and on boarding is critical to maximizing pipeline conversion and ensuring long term value creation.
Both our sales and customer success teams have been strengthened helping us to deeply understand each client's unique environment, enabling us to tailor and deploy solutions rapidly and effectively this expertise allows us to offer an alternative to organization trying to build these capabilities internally by focusing on speed interoperability and.
Time to value, we are building stronger more durable customer relationships, increasing expansion opportunities and positioning aware as the trusted partner for enterprise and government customers seeking scalable biometric solutions.
Disciplined approach to solution delivery and customer engagement will continue to drive momentum as we convert our growing pipeline into long term high impact deployments with meaningful revenue in the months ahead.
Brian Krause: This disciplined approach to solution delivery and customer engagement will continue to drive momentum as we convert our growing pipeline into long-term, high-impact deployments with meaningful revenue in the months ahead. Now I'll hand the call back to Ajay for his closing remarks.
Now I'll hand, the call back to Ajay for his closing remarks.
Thanks, Brian Q2 demonstrated clear progress against the strategic plan, we put into motion, we're gaining credibility with enterprise and federal customers validating our platform through independent benchmark and real world deployments and taking disciplined steps to convert our pipeline into revenue and future opportunities as we enter the second half of 2025.
Ajay Amlani: Thanks, Brian. Q2 demonstrated clear progress against the strategic plan we put into motion. We are gaining credibility with enterprise and federal customers, validating our platform through independent benchmarks and real-world deployments, and taking disciplined steps to convert our pipeline into revenue and future opportunities. As we enter H2 2025, our strategy remains focused. Build the most flexible, trusted, and science-forward biometric infrastructure in the market and scale it with discipline. We are laying the groundwork for sustainable growth by aligning to market needs, tightening operational focus, and leveraging our unique technology. We are executing against a clear roadmap driven by a leadership team purpose built for transformation. We are expanding our pipeline through strategic partnerships that unlock long-cycle opportunities across both government and enterprise markets while sharpening our go-to-market strategy through a customer-obsessed, science-forward approach.
Our strategy remains focused build the most flexible trusted and science forward biometric infrastructure in the market and scale. It with discipline, we are laying the groundwork for sustainable growth by aligning to market needs tightening operational focus and leveraging our unique technology, we are executing against a clear roadmap driven by a <unk>.
Leadership team purpose built for transformation.
We are expanding our pipeline through strategic partnerships that unlocked long cycle opportunities across both government and enterprise markets, while sharpening our go to market strategy through a customer obsessed science forward approach.
With purposeful investments aimed accelerating deployments strengthening customer experience.
And deepening our presence in high value markets. We believe aware is well positioned to lead the next generation of biometric innovation and deliver sustainable growth in 2026.
Ajay Amlani: With purposeful investments aimed at accelerating deployments, strengthening customer experience, and deepening our presence in high-value markets, we believe Aware is well-positioned to lead the next generation of biometric innovation and deliver sustainable growth in 2026.
I look forward to sharing more about our progress during our Q3 call that concludes our prepared remarks, we'll now open the call for questions. Matt. Please provide the instructions.
Ajay Amlani: I look forward to sharing more about our progress during our Q3 call. That concludes our prepared remarks. We'll now open the call for questions. Matt, please provide the instructions.
Thank you a J as a reminder, you can submit a question at any time using the ask a question feature in the webcast player.
Matt Glover: Thank you, AJ. As a reminder, you can submit a question at any time using the Ask a Question feature in the webcast player. We'll begin with questions submitted by investors ahead of today's webcast. Our first question is for AJ. Leidos has been a longstanding partner of Aware's. Today they announced a significant task order awarded by the FBI. Can you provide some insight into the press release and what this means for Aware's partnership with Leidos?
We'll begin with questions submitted by investors ahead of today's webcast.
Our first question is for a J.
<unk> has been a longstanding partner of wears today, they announced significant task order awarded by the FBI can you provide some insight into the press release and what this means for where its partnership with Idose.
Yes.
Yes. Thank you very much for the question.
Very excited about the ongoing investments by the U S federal government into the biometric industry and into identity.
Ajay Amlani: Yes. Thank you very much for the question. We're very excited about the ongoing investments by the U.S. federal government into the biometric industry and into identity. While we don't comment on any specific customers or partners, we encourage the ability for ongoing investments and growth, we look forward to being able to be a part of all of the investments within the federal government as they continue to recognize the importance of identity and biometrics.
While we don't comment on any specific customers or partners.
We encourage the ability for ongoing investments in growth and we look forward to being able to be a part of all of the investments within.
The federal government.
They continue to recognize the importance of identity and biometrics.
Thanks, J J the.
The next question is for David.
Based on your current visibility what do you expect for revenue in the second half of 2025, and what are the key factors that could influence that performance.
Matt Glover: Thanks, AJ. The next question is for David. Based on your current visibility, what do you expect for revenue in H2 2025, and what are the key factors that could influence that performance?
Yeah.
Thanks, Matt.
So we continue.
To view the second half of 2025.
David Traverse: Thanks, Matt. We continue to view H2 2025 as an important period of progress for the company, particularly in terms of pipeline advancement and as well as customer onboarding. However, we're still being thoughtful about how that translates into revenue timing, as that can be very different on each specific deal, and we really don't have line of sight to that yet. Our focus really remains on execution and bringing new customers into production, which will set us up for multi-year contracts and contribute meaningful revenue over time.
Important period of progress for the company, particularly in terms of pipeline advancement as well as top customer onboarding.
However, we're still being thoughtful about how that translate into revenue timing of that can be very different on each specific deal and we really do have line of sight to that yet.
Our focus our focus really remains on execution and bringing new customers into production.
Which will set us up for multi year contracts and contributing meaningful revenue over time.
Thanks, David.
The next question is for a J.
Looking into 2026 and beyond what are the key revenue growth levers you're focused on now.
Matt Glover: Thanks, David. The next question is for AJ. Looking into 2026 and beyond, what are the key revenue growth levers you're focused on now?
Our key growth levers today.
Federal government work that we continue to be able to pursue the law enforcement market that we've always had a legacy and history within.
Ajay Amlani: Our key growth levers today are the federal government work that we continue to be able to pursue, the law enforcement market that we've always had a legacy and a history within, and also the commercial market, which have been showing a significant amount of interest and expansion within the utilization of biometric technology. Historically, the biometric industry has really been formed around federal government work with national ID programs and border security work. Within that, there has been significant increases within the US federal government budget, to the tune of about $165 billion that has been added to the Department of Homeland Security budget over the next 10 years. They have made plans to spend about $44 billion of it in fiscal year 2026, much of which is going to be done and spent on border security work and other related initiatives that involve technology.
And also the commercial market.
Which had been showing a significant amount of interest on expansion within the utilization of biometric technology.
Historically, the biometric industry has really been formed around federal government work with national programs and border security work within that there's been significant increases within the U S Federal government budget.
To the tune of about $165 billion has been added to the department of Homeland security budget over the next 10 years.
Plans to spend about $44 billion of it in fiscal year 2026.
Each of which is going to be done.
Our border security work and other related initiatives that involve technology.
Interested and excited to be able to participate in some of that growth given that the baseline budget for department of Homeland security.
Ajay Amlani: We're very interested and excited to be able to participate in some of that growth, given that the baseline budget for the Department of Homeland Security to begin with is really just $116 billion to begin with. Within the law enforcement community, there's been added emphasis on the law enforcement community to be able to deploy better technology, upgrade, and refresh some of their investments, and continue to look for better vendors that will respond quicker to their needs. We have a very strong reputation embedded within this industry, and we look forward to be able to grow within it. Within the commercial market, there are three levers to identity, three factors of identity. That is what you know, what you carry, and who you are.
Begin with it was really just $115 billion to begin with.
Within the law enforcement community are then added emphasis.
On the law enforcement community to be able to be able to deploy better technology upgrades.
And refresh some of our investments.
We continue to look for lenders.
Vendors that will respond quicker.
We have a very strong reputation for that.
Within this industry and we look forward to be able to grow within it.
The commercial market.
So identity.
The fact that I believe that is what you know what you carry into the New York piece has always been biometrics.
Sure.
<unk> pushed down the line.
A few years with concerns of surveillance and other concerns.
Ajay Amlani: The who you are piece has always been biometrics, but that has been pushed down over the last few years for concerns of surveillance and other concerns that people have always had, not recognizing that biometrics actually enhances privacy. What we found is that with Face ID and other technologies now being the go-to capability for consumers to be able to identify themselves on their mobile devices, the customer reaction to biometrics is now at an all-time positive. The utilization of the technology will continue to be increased as other factors of identity, namely what you know as in user ID and passwords and Social Security numbers and phone numbers, continue to be openly available on the dark web and now even on the open web. Ongoing AI capabilities from fraudsters continue to infiltrate factor number two.
That people have always had.
Now recognizing that biometric is actually enhances privacy.
What we found is that.
Thanks, Heidi and other technologies now being the goto and capability for consumers.
Putting themselves on their mobile devices.
The customer reaction to biometrics is now at an all time positive.
And the utilization of the technology will continue to be increased.
Other factors like identity normally what you know at the new guidance upwards for security numbers.
Number.
Beginning with the opening of the available on the dark web and now even.
On the open web.
Yes.
Ongoing AI capabilities from Fob search continued to infiltrate.
Number two.
And number three with regard to the biometric.
Is the obvious utilization and opportunity of choice.
Ajay Amlani: Factor number 3 with regards to biometrics is the obvious utilization and opportunity of choice for technology that allows humans to be able to prove that they are a human online and prove that they are the right human online at that time. Thank you.
Technology allows us.
To be able to.
There are human online and prove that they are the right unit online at that time.
Thank you.
Thanks, Greg we have a question for Brian given that recurring revenue grew modestly.
Taken to accelerate your subscription base business.
Matt Glover: Thanks, AJ. We have a question for Brian. Given that recurring revenue grew modestly, what steps are you taking to accelerate your subscription-based business?
Okay.
Thank you for the question. So we continue to invest in our go to market process.
With a focus on.
Brian Krause: Thank you for the question. We continue to invest in our go-to-market process and teams with a focus on scalable biometric projects and solutions. As we continue to focus around the markets and the segments that support the core products we've talked about on this call, the Awareness Platform, the digital biometrics, the AwareABIS solutions for law enforcement. Our focus is generally on the larger end of the market where our software solutions are deployed as enterprise infrastructure. The commercial models for most of those deployments are generally recurring, long-term, sticky, durable relationships, and we expect the continued focus on these segments and these products to help our transformation continue and accelerate into the future.
Scalable biometric projects and solutions.
Yes.
Continue to focus around the market segments.
The core products, we've talked about on this call the awareness platform with digital biometric behavior.
Solutions for law enforcement.
Generally on larger end of the market, where our software is our.
Software solutions are deployed as enterprise infrastructure.
The commercial model for most of those deployments.
Generally recurring long term sticky durable relationship to we expect to continue to focus on these segments in these products.
Okay formation continue and accelerate into the future.
Thanks, Brian maybe another one for you.
How are you improving sales cycle velocity and what are the bottlenecks today.
Matt Glover: Thanks, Brian. We have another one for you. How are you improving sales cycle velocity, and what are the bottlenecks today?
Sure. Thanks again for the question.
So I won't highlight any specific bottleneck today, but I will say that we have.
Brian Krause: Sure. Thanks again for the question. I won't highlight any specific bottlenecks today, but I will say that we have focused, as I mentioned in my comments, on really strengthening our end-to-end sales process and our teams to really focus on customer requirements and being customer obsessed. As a result of this, what we see generally is a closer alignment to customer requirements and understanding those needs. This often manifests and translates into shorter proof of value testing, as well as higher success rates with proof of value testing. Again, our focus is really on aligning closely with these big enterprise customers across a multitude of sectors, deeply understanding requirements and goals and being able to execute on value delivery in a short time to value for these customers.
As I mentioned in my comments on really strengthening.
Sales process and our team to really focus on the customer requirements and it can be.
Correct.
As a result of this what we see generally is a closer alignment to customer requirements and other needs.
This also manifest will translate into shorter proof of value testing.
As well.
Higher success rates with proof of value testing. So again, our focus is really on aligning closely with it.
Enterprise customers.
Across a multitude of sectors.
Deeply understanding requirements.
And being able to.
Execute.
On value delivery and shorten time to value for these customers.
Okay.
Thank you Brian.
What trends are you seeing globally in government biometric deployments that were well positioned to capitalize on.
Matt Glover: Thank you, Brian. Ajay, what trends are you seeing globally in government biometric deployments that Aware is well-positioned to capitalize on?
Thank you I'm very excited about those questions because there is a lot of interesting trends happening globally.
Ajay Amlani: Thank you. I'm very excited about this question because there is a lot of interesting trends happening globally that we are looking to try to advance on. Now, we are a US-based company. We have a history going back 35 years to really the foundations of the company in Boston by MIT graduates who responded back to a request by the FBI to really create a common standard for fingerprint technology so that they can have open vendor-agnostic solutions and the capabilities for the market to be able to grow in the biometric realm. What we've understood and accepted from the beginning is that our focus on the North American market doesn't preclude us from being able to operate internationally.
We are looking to try to add on now we are a U S based customer USA company.
History going back 35 years to really the foundation of this company in Boston.
Graduates, who responded back to a request by the FBI to really create a common standard for fingerprint technology.
They can have open vendor agnostic solutions and the capability for the market to be able to grow in the biometric.
Well.
What we have.
Understood and accepted.
In the beginning it's a focus on the North American market doesn't preclude us from being able to operate internationally.
We select.
Very carefully.
<unk> to be able to work with internationally and we grow those partners and we look for their success and we stay hyper focused on being able to make sure that we can deliver the things that we promised on our end.
Ajay Amlani: We select very carefully our partners to be able to work with internationally. We grow those partners, and we look for their success, and we stay hyper-focused on being able to make sure that we can deliver the things that we promise on our end. Those partners that we have internationally and the work that we're doing here domestically is very focused on a few different fundamental components and opportunities around the biometric industry, and especially as it relates to the federal government work that we have done for the last 30 years and continue to do and will grow. Much of that involves both federal uses of issued identities, whether that's for federal government employees or for individual residents of the country. mobile driver's licenses continue to roll out.
Those partners that we have internationally.
That we're doing here domestically.
Very focused on.
Few different fundamental components and opportunities around the biometric industry.
Especially as it relates to the federal government work that we have done.
Last 30 years and continue to do and will grow.
On much of that involves both federal leases.
If your identity.
Whether thats for our federal government employees or for individual resident albacore.
All the countries.
Our drivers' licenses continue to rollout.
Companies that have.
Large digital wallets are looking at growing the utilization of those both within the United States as the issuers are <unk> and other organizations and then the issuers globally. We will also have national Achy programs that was where that represents a very large opportunity for us as basically in any I'd verification.
Ajay Amlani: Companies that have large digital wallets are looking at growing the utilization of those, both within the United States as the issuers are DMVs and other organizations, and then the issuers globally who also have national ID programs. That represents a very large opportunity for us as basically in any ID verification flow, there is first the presentation of a credential, and then the recognition that the face matches the live face of the human, matches the face that's on the credential. As that transitions into a digital world, which is very important because the digital world now far exceeds the number of transactions that we see in the physical world.
Hello.
There is first the presentation of a credential.
And then the recognition that the six matches the last phase of the human matches the status on the credential.
Transitions into a digital world.
Which is very important.
The digital World now far exceeds the number of transactions that you see in the world.
Digital identity Global government issued digital identity globally.
To protect the internet and protect consumers.
Ajay Amlani: Digital identity globally, government-issued digital identity globally, can help serve to protect the internet and protect consumers and help to recognize what is a bot, what is not a bot, recognize the difference between AI-enabled capabilities and who is a human, and whether or not the human has in fact authorized the bot on their behalf. There's a large growth in federal government-issued digital identities, as there are also in global travel. Global travel has expanded dramatically. Here in the United States, we're expecting huge leaps in global travel going into the FIFA World Cup in 2026 and the 2028 Summer Olympics. The way to be able to accommodate for all of that growth with very limited resources and the inability to be able to hire or expand footprints is through the utilization of technologies such as biometrics.
And hope to recognize one of them, but it's not about.
Difference between.
Enabled capabilities.
And whether or not the cumulative effect.
Or is the bias on their behalf.
So there is a large growth in federal government issued digitally.
As there are also in the global travel.
Global travel.
Has expanded dramatically.
Here in the United States, reflecting huge leaps and global travel going into the World Cup in 2026, and the Olympics in 2028.
And we need to be able to accommodate all of that growth with very limited resources and the inability to be able to hire or expand footprint.
Utilization of technologies, such as biometrics.
The utilization.
Metrics across.
The globe in the travel sector.
Ajay Amlani: The utilization of biometrics across the globe in the travel sector presents a unique opportunity for Aware to be able to capitalize on its legacy and its presence that it established post 9/11 as one of the vendors of choice for most of the major travel organizations to be able to secure travel. Those are two of the opportunities that we're looking at within the federal government sector globally.
A unique opportunity for aware and be able to capitalize on its legacy.
But thats established with 911 as well as the vendor of choice for most of that interest capitalization to be able to secure travel.
So those are two of the opportunities that we're looking at within the federal government sector globally.
Thank you a J.
We received several questions from Bachelor from Bachelor Capital. This first question is for David <unk>.
Matt Glover: Thank you, Ajay. You received several questions from John Butler from Butler Capital. This first question is for David. Why is the Q2 G&A up more than the sum of R&D and selling and marketing on a year-over-year basis?
Second quarter, G&A up more than the sum of R&D and selling and marketing on a year over year basis.
Thanks for the question.
It's easy to break those down into two parts I'll start first with the R&D and sales and marketing combining those both of those areas with the changes we've made the executive team have gone over.
David Traverse: Thanks for the question. I think it's easier to break those down into two parts. I'll start first with R&D and sales and marketing, combining those. Both of those areas, with the changes we made to the executive team, have gone over really a purposeful transformation over the past year.
Purposeful transformation over the past year.
And what we've got to rely on these teams to focus on execution.
You see as driving strategic priorities, and we're making investments to those groups. So we do expect these costs to increase in the second half of the year as we make those investments.
David Traverse: What we've been doing, we've been realigning these teams to focus on execution, efficiency, and strategic priorities and we're making investments in those groups. We do expect these costs to increase in H2 as we make those investments. On the G&A side, it's really worth noting it can really fluctuate from Q to Q depending on timing of one-time events, and also some other actions. Nothing really of note there, just one thing was there was a performance-based stock option expense in there for when we brought AJ on. That's happening on a quarterly basis. That wasn't there last year. It's really just an up and down expense that can happen, so just natural fluctuations that we expect G&A to hold pretty steady in H2.
On the G&A side.
It's really worth noting it can really fluctuate from quarter to quarter, depending on timing.
Timing of kind of one time events.
And also kind of some other kind of.
This actions, but nothing really of note there just.
One thing it was the worst performance based stock option expense and therefore, when we brought AJ on that that's.
That's happening on a quarterly basis, if that wasn't there last year, but it's really just kind of.
And up and down.
Expense that can happen such as natural natural fluctuations that we expect G&A to hold pretty steady kind of in the second half of the year.
Thank you David John It's three questions for Brian first question is how does your current pipeline and volume of deal flow compared to the first quarter.
Matt Glover: Thank you, David. John has three questions for Brian. His first question is: how does your current pipeline and volume of deal flow compare to Q1?
Okay.
Thank you guys good job. Thank you.
Okay.
Without providing specifics.
Brian Krause: Thank you, John. Thank you. Without providing sort of specifics on our internal KPIs, I can say that the acceleration of our pipeline, both from a volume and value size, has accelerated significantly. Q2 was an investment quarter in go-to-market, and I think most of the growth in pipeline exceeded our internal expectations in terms of acceleration. We feel very confident from my comments that H2 will start to see some of that revenue acceleration and into 2026.
P J.
I can say.
The acceleration of our pipeline both from a volume.
And value side.
I have accelerated significantly Q.
Q2 was.
Going back a quarter and go to market and I think.
Most of the growth in pipeline.
Our internal expectations in terms of acceleration, we feel very confident for my comments.
Secondly.
We will start to see some of that revenue acceleration in 2026.
Brian what are your customer and revenue pension rates.
So our customer and revenue retention rates are without getting into specifics.
Matt Glover: Brian, what are your customer and revenue retention rates?
Very consistent with previous years.
Brian Krause: Our current customer revenue and retention rates are, without getting into specifics, are very consistent with previous years. Our efforts to continue to focus on end-to-end customer relationship management and investments in our customer success team, that's an area of focus that we hope to actually continue to improve upon as well as in the future, of course. So far, both gross dollar retention, net dollar retention are consistent with previous years.
Our efforts to continue okay.
Customer relationship management.
Customer success team.
That's an area of focus that we hope to actually continue to improve upon as well as in future quarters.
So far.
Both prostate are expected in that to your attention are consistent with previous years.
Brian can you speak any notable recent RFP wins or losses.
Okay.
Matt Glover: Brian, can you speak to any notable recent RFP wins or losses?
Yes, we don't comment on specific projects for customers.
The market is very active.
And government should be correct today throughout the call.
Brian Krause: Yeah. We don't comment on specific projects or customers. I will say that the market is very active, both in commercial and government, as you've heard today throughout the call. We have been very active in pursuing a lot of competing projects, some of which will take some time, of course. We are very excited by the validation that provides from the market, that there is a lot of interest in our technology, and there is a lot of formal process being undertaken by customers, both public and private, to thoroughly evaluate their technology providers. As you heard in some of the comments, and as you can see in some of the reports, our product is performing very well, is being validated very highly.
We haven't been very active.
A lot of projects.
Some of which will take some time of course, but we are very excited by the validation that that provides us from the market that there is a lot of interest in our technology.
And there's a lot of formal process.
Being undertaken by customers, both public and private.
So thoroughly evaluated our technology providers.
<unk> heard from some of the comments and you can see in some of our cost of product.
Performing very well is being allocated very highly.
We feel confident in that.
Both projects that we are competing it will do well in.
And we are competing in a fair number of them on a quarterly basis at this point.
Brian Krause: We feel confident that those projects that we are competing in, will do well in, and we are competing in a fair number of them on a quarterly basis at this point.
Final question for Jay can you give some color on where the M&A pipeline.
Matt Glover: John's final question is for AJ. Can you give some color on Aware's M&A pipeline?
Sure absolutely.
At this point in time.
We're focused on.
And of course execution internally.
Ajay Amlani: Sure, absolutely. At this point in time, we're focused on tenacious execution internally and making sure that our phenomenal team that we have within the company continues to stay and understand the corporate strategy, has a part in developing the corporate strategy, and continues to also work with that level of intensity to be able to serve customers with white glove service, go over and above what we need to do to be able to deliver a great experience for the new customers that we bring on board of Aware, making sure that we can under promise and over deliver, and then continue to grow within them. Very much a manage expand strategy for the company.
Ensure that our nominal team that we have within the company.
Continues to stay.
I understand the corporate strategy.
It has a part in developing a corporate strategy.
And continues to also work with that level of intensity to be able to serve customers.
Service over and above what we need to do to be able to deliver.
So a great experience.
The new customers that we bring onboard.
Sure that we can under promise and over deliver.
And then continue to grow within them very much.
On land and expand strategy for the company.
Much of that is tied into investments and certainly within the company.
Make sure that we have.
The best software engineers that we can add within the company to complement our existing amazing team.
Ajay Amlani: Much of that is tied into investments internally within the company to make sure that we have the best software engineers that we can have within the company to complement our existing amazing team of developers and engineering leaders. We continue to invest in internal go-to-market function and capability, as evidenced with the hiring of Lona Terian, who has built multiple multibillion-dollar companies with her marketing prowess and capabilities, and with Brian Krause leading up our revenue organization and the individuals underneath those teams. As we continue to invest in our customer success function, our sales function, our engineering function, we take a look at new customers coming on board, and we look at Aware's platform, the Awareness Platform, which in itself has many of the capabilities and components that are necessary to be able to serve today's demand and market need for biometrics globally.
Developers.
Leaders.
We continue to invest in internal market is awesome.
And so the ability as evidenced with the hiring of Clarion.
Has built multiple.
Multibillion dollar companies.
Marketing pallets and durability.
With Bryan Krug cleaning up our revenue organization as the individual's underneath those teams.
Continue to invest in our <unk>.
Mr. Stefan <unk>, our sales function, our engineering function will.
We'll take a look at new customers coming on board.
Whereas platform.
Sure.
Which in itself has.
Many of the capabilities in components that are necessary to be able to serve today's demand and market needs providing metrics globally.
So from a technology perspective, a product perspective.
There are not that necessarily in our product suite that we need to be filled with ethanol.
Ajay Amlani: From a technology perspective, a product perspective, there are no gaps necessarily in our product suite that would need to be filled with M&A. From a customer standpoint and a growth standpoint, we look towards internal execution as opposed to external M&A to be able to drive that growth. Thank you.
And from a customer standpoint.
And our growth standpoint, we look towards the total.
Execution as opposed to external.
To be able to drive that growth.
Thank you.
Thank you a J next question is from Nat Stewart from <unk> capital.
It's good to hear that the pipeline is growing and substantial entities such as the federal government and Fortune 500, what does the revenue model for the sale of its onetime licensing fees multiyear contracts or pad.
Matt Glover: Thank you, AJ. Our next question is from Matt Stewart from NAS Capital. It's good to hear that the pipeline is growing in substantial entities such as federal government and Fortune 500. What is the revenue model for these sales? One-time licensing fees, multi-year contracts, or pay as used?
This is Kevin.
All right Brian.
Sure Yes.
David Traverse: This is David. Matt. I can take that one. Go ahead, Brian.
Thank you.
With my comments earlier.
Where our focus is right now.
Brian Krause: Sure. Yeah. I think it's consistent with my comments earlier about where our focus is right now. The pipeline is obviously a byproduct of where our go-to-market focus is in our process and our program, more, actually. Most of this newer pipeline that we've been able to successfully develop is in large-scale biometric projects that align more closely to sales models of enterprise software and infrastructure licensing. We expect to see, as I mentioned earlier, sort of continued transformation of our overall revenue as more of these projects are successful and start to move towards more of an enterprise licensing model. Not across the board, of course, but we still have a very strong component business across the world, and we will continue to service that and continue to support that.
The pipeline is.
Obviously byproduct of go to market.
This is in our processes.
Our program works.
Most of these most of these newer pipeline that we've been able to successfully develop it.
Large scale biometric projects that align more closer to.
Sales models of enterprise software.
In infrastructure licensing.
No.
We expect to see as I mentioned earlier sort of continued transformation of our overall revenue as more of these.
Projects are successful.
Thanks, Scott to Dr move towards more of an enterprise licensing model.
The board of course, but.
We still have a very strong.
Commodities business across the World and we will continue to service.
To support that.
But our focus right now is on being a true enterprise infrastructure provider to large scale biometric projects and those projects are typically sold as a product licenses.
Brian Krause: Our focus right now is on being a true enterprise infrastructure provider to large-scale biometrics projects, and those projects are typically sold as enterprise licenses.
Thanks, Brian at this time. This concludes our question and answer session. Your question wasn't answered. Please E mail <unk> IR team at kw already gateway dashed ERP Dot com.
Matt Glover: Thanks, Brian. This concludes our question and answer session. If your question wasn't answered, please email Aware's IR team at awre@gatewayir.com. Before we conclude, I'd like to remind everyone that a replay of today's call will be available via a link in the investor relations section of Aware's website. Thank you for joining us for Aware's Q2 2025 conference call. You may now disconnect.
Before we conclude I'd like to remind everyone.
A replay of today's call will be available Lincoln the Investor Relations section of website.
Thank you for joining us for the second quarter of 2025 conference call you may now disconnect.