Q3 2025 Aware Inc Earnings Call
<unk> third quarter 2025 conference call.
Joining us today are the company's CEO and President AGM, Lonnie CFO, David <unk> and CFO, Brian Crouse.
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 rebuilt and ask a question feature in the webcast player.
Before we begin today's call I'd like to remind everyone that the presentation. Today 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.
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.
Aware wishes to caution you that there are factors that could cause actual results to differ materially from those results indicated by such statements.
Speaker #1: Another question for you has a where considered enabling interactions with smaller platforms .
Speaker #1: Or 1000 , an improvement compared to a loss of 1.1 million in the prior year quarter . Turning to our results . For the first nine months of 2025 , revenue was 12.6 million .
Speaker #1: Everyone that the presentation today contains forward looking statements that are based on the current expectations of our management and involve inherent risks and uncertainties that could cause actual results to differ materially from those described .
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-Q.
Speaker #2: That's a great question . I would love to have a little bit more color and a little bit more follow up with the asker specifically address , which smaller platforms that they're requesting and talking about .
Any forward looking statements should be considered in light of these factors.
Speaker #1: Listeners should please take note 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 .
Speaker #1: Similar to last year . Net loss was 4.4 million , or $0.21 per diluted share , compared to a net loss of 3.2 million , $0.15 per diluted share , in the same period last year .
You are cautioned not to place undue reliance on 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.
Speaker #2: But as we've learned through the years , smaller platforms can grow very quickly in this economy . And we've seen if you have the right team , the right investor base and the right customer relationships and the right product , pretty expansive scale .
Speaker #1: Adjusted EBITDA loss year to date was 3.8 million , compared to an adjusted EBITDA loss of 3 million in the prior year period .
Speaker #1: 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-q .
Additionally, this call contains certain non-GAAP financial measures is determined defined by the SEC regulation G.
Speaker #1: Any forward looking statements should be considered in light of these factors . You are cautioned not to place undue reliance on any forward looking statements , which speak only as of the date made .
non-GAAP financial measures should be considered in isolation from or a substitute for financial information presented in compliance with GAAP.
Speaker #2: So while most companies are only choosing to be work with the largest partners in the market , the ones that have raised the 200 to $400 million to deploy identity systems and identity verification capabilities , we are also paying attention to the smaller vendors in the market and the smaller partners in the market .
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.
Speaker #1: 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 .
I'd like to remind everyone that this presentation will be recorded and made available for replay via link available in the Investor Relations section of the company's web site.
Speaker #1: Additionally , this call contains certain non-GAAP financial measures , as the term is defined by the SEC and regulation G , non-GAAP financial measures should be considered in isolation from , or a substitute for , financial presented in compliance with GAAP .
Now I'd like to turn the call over to CEO and President J M. A J.
Thank you, Matt and good afternoon, everyone Q3 reflects disciplined execution and continued progress in <unk> transformation strategy. This quarter, we delivered 33% year over year revenue growth, while improving our bottom line. We recognize there is still important work ahead to build consistency and scale.
Speaker #2: But we're prioritizing the ones that we believe have the most opportunity for scale based on the management team , based on the customer contacts , based on the products that they have and the capabilities for scale .
Speaker #1: Accordingly , a Where has provided a reconciliation of these non-GAAP financial the most directly comparable GAAP measures in the company's earnings release issued today .
Speaker #1: I'd like to remind everyone that this presentation will be recorded and made available for replay via link available in the Investor Relations section of the company's website .
Will we expected near term quarterly results may vary based on timing of customer decisions and license mix.
Speaker #1: Now , I'd like to turn the call over to where CEO and president Ajay Amlani A.J. .
Speaker #2: Thank
Speaker #2: Thank you , measures to Matt , and good afternoon , everyone . Q3 reflects disciplined execution and continued progress in Aware's transformation strategy this quarter .
These results reinforce our three pronged transformation, which centers on first.
Dancing core biometric technology with a focus on license and the awareness platform.
Speaker #2: We delivered 33% year-over-year revenue growth while improving our bottom line. We recognize there's still important work ahead to build consistency and scale, and we expect near-term quarterly results may vary based on the timing of customer decisions and license mix.
Second strengthening our science forward customer obsessed and go to market model in.
And third deepening strategic relationships and partnerships and certifications that build trust and scale.
Speaker #2: These results reinforce our three pronged transformation , which centers on first advancing core biometric technology with a focus on liveness and the awareness platform .
Before diving into Q3 highlights let me set some market context.
As I shared.
At the Gateway conference in September customer perceptions around biometric fundamentally shifted everyday use of face I'd and biometric traveled checkpoints as made biometric both familiar and expected in the age of AI, it's not only getting harder to prove identity individuals must also prove their human in.
Speaker #2: Second , strengthening our science forward , customer obsessed go to market model . And third , deepening strategic relationships and partnerships and certifications that build trust scale .
Speaker #2: Before diving into Q3 highlights, let me set some market context. As I shared at the Gateway Conference in September, customer perceptions around biometrics have fundamentally shifted.
Our real time against increasingly sophisticated spoofing attempts.
This elevates liveliness detection from a nice to have into a critical control for product for fraud prevention and trust.
Speaker #2: Everyday face ID and biometric travel checkpoints has made biometrics both familiar and expected . In the age of AI , it's not only getting harder to prove identity .
Against this backdrop, our strategy is to meet customers where risk is rising most.
Delivering adaptive liveliness interoperable matching and a platform architecture that allows enterprises and agencies interoperable orchestration without vendor lock in where isn't just selling technology with delivering solutions that help customers maintain uptime, while solving their most pressing.
Speaker #2: Individuals must also prove they are human in real time against increasingly sophisticated spoofing attempts . This elevates liveness detection from a nice to have into a critical control for product , for fraud prevention and trust .
Speaker #2: Against this backdrop , our strategy is to meet customers where risk is rising . Most , delivering adaptive liveness , interoperable , matching and a platform architecture that allows enterprises and agencies interoperable orchestration without vendor lock in , where isn't just selling technology .
Trust and safety challenges.
Where the U S based company with three decades of biometric innovation and a blue chip customer base across government and enterprise that foundation of trust matters as buyers raise the bar unsecured privacy and interoperability and as governments increasingly emphasize domestic providers.
Speaker #2: We're delivering solutions that help customers maintain uptime while solving their most pressing trust and safety challenges . Where the US based company with three decades of biometric innovation and a blue chip customer base across government and enterprise that foundation of trust matters .
For critical identity infrastructure on.
On the government side, we see tailwind from broader funding for biometric modernization within DHS agencies, coupled with a strong buy American orientation, having helped to launch some of the earliest biometric programs at DHS.
Speaker #2: As buyers raise the bar on security , privacy and interoperability , and as governments increasingly emphasize domestic providers for critical identity infrastructure on the government side , we see tailwinds from broader funding for biometric modernization within DHS agencies , coupled with a strong Buy American orientation .
Seen firsthand, how federal adoption set the global standards and aware is uniquely positioned to lead as a U S based science led provider.
On the commercial side enterprises are moving to anchor digital identity.
The biometric backbone with strong privacy controls, replacing fragile combinations of passwords and device trust with biometric proof of presence and proof of person.
Speaker #2: Having helped launch some of the earliest biometric programs at DHS . I've seen firsthand how federal adoption sets global standards and aware is uniquely positioned to lead as a US based , science led provider .
Our platform is designed for choice speeds.
Speed to value and standards alignment, a differentiator that customers and partners increasingly value.
Speaker #2: On the commercial side , enterprises are moving to anchor digital identity on a biometric backbone with strong privacy controls replacing fragile combinations of passwords and device trust with biometric proof of presence and proof of person .
Our awareness platform integrates matching engine adaptive liveliness and anti spoofing.
And interoperability layers to deliver flexibility at scale.
Earlier this year, our passive liveliness achieved best in class performance in the department of Homeland security remote identity validation benchmark, providing clear third party validation that we're solving real world identity fraud with less friction.
Speaker #2: Our platform is designed for choice speed to value and standards alignment . A differentiator that customers and partners increasingly value . Our awareness platform integrates matching engines , adaptive liveness and anti-spoofing , and interoperability layers to deliver flexibility at scale .
In October our faith verification stack, combining advanced livelihoods with facial matching.
<unk> Fido Alliance certification. This is one of the most rigorous global benchmarks and biometric security.
Speaker #2: Earlier this year , our passive liveness achieved best in class performance in the Department of Homeland Security Remote identity validation benchmarks , providing clear third party validation that we're solving real world identity fraud with less friction .
Not only validates our approach, but also reduces complaints friction and enterprise procurements and accelerates integrations with major partners and identity ecosystems. It also complements our roadmap to build additional certifications that customers expect.
Speaker #2: In October , our face verification stack combining advanced liveness with facial matching earned Fido Alliance certification . This is one of the most rigorous global benchmarks in biometric security .
Over the past several quarters, we've upgraded leadership across revenue marketing and product aligning the organization to scale with discipline. We are focused on prioritizing and large durable opportunities in federal and the enterprise market that can translate into multi year recurring revenue and product lever.
Speaker #2: It not only validates our approach , but also reduces compliance friction in enterprise procurements and accelerates integrations with major partners and identity ecosystems .
Speaker #2: It also complements our roadmap to build additional certifications that customers expect . Over the past several quarters , we've upgraded leadership across revenue , and product , aligning the organization to scale with discipline .
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With this team in place we are executing across two core markets first government.
Building, a direct presence with agencies.
Mining to buy American requirements and modernization initiatives across the department of Homeland Security and the department of work and many other related programs and departments, where liveliness and interoperability are central growing demand for mobile identity and modernization of legacy systems placed.
Speaker #2: We are focused on prioritizing large, durable opportunities in the federal and enterprise market that can translate into multi-year, recurring revenue and product leverage.
Speaker #2: With this team in place , we are executing across two core markets . First , government building a direct presence with agencies aligning to buy American requirements and modernization initiatives across the Department of Homeland Security .
Directly to our Avis and mobile capture strengths.
Second commercial enterprises companies are adopting biometric anchored journeys for both workforce and customer use cases.
Speaker #2: The Department of War , and many other related programs and departments where liveness and interoperability are central . Growing demand for mobile identity and modernization of legacy systems plays directly to our Adas and
Emphasizing privacy standards and interoperability all well aligned with our awareness platform and aware SDK.
Our strategy is translating into both top line momentum and greater operating discipline.
I'll now hand, it over to David to review, our third quarter financial performance in more detail over to you David.
Thank you AJ.
Now I'll walk through our third quarter financial results.
Revenue in the third quarter is $5 1 million, an increase of 33% year over year.
The increase was primarily driven by $1 million of perpetual license expansion sale with an existing customer and a 600000 new term license contract.
Partially offset by typical fluctuations and perpetual license and lower services and other revenue.
Operating expenses for the quarter was $6 4 million to $5 4 million in the prior year quarter.
The increase reflects targeted investments in sales marketing and product development as we execute our go to market strategy.
Looking ahead, we do expect an increase in our operating expenses in the fourth quarter.
Reflecting the full quarter impact of investments made during the third quarter to support our growth strategy.
Net loss for the quarter was $1 1 million or <unk> <unk> per diluted share and a proven appear to a net loss of $1 2 million or <unk> <unk> per diluted share in the prior year quarter.
Adjusted EBITDA loss was 800000, and an improvement compared to a loss of $1 1 million in the prior year quarter.
Turning to our results for the first nine months of 2025.
Revenue was $12 6 million similar to last year.
Net loss was $4 4 million or 21 per diluted share compared to a net loss of $3 2 million or <unk> 15 per diluted share in the same period last year.
Adjusted EBITDA loss year to date was $3 8 million compared to an adjusted EBITDA loss of $3 million in the prior year period.
We ended the quarter with $22 5 million in cash cash equivalents in marketable securities and no debt to.
The change primarily reflects the operating loss for the period as well as normal fluctuations in working capital, including timing of accounts receivable collections.
Our balance sheet provides us with flexibility to continue investing in growth, while maintaining a disciplined approach to expenses.
Our Q3 results reflect progress towards sustainable growth.
We are executing with discipline scaling revenue and <unk>.
Positioning the company for operating leverage as our top line continues to expand.
With that I'll hand, it over to Brian to provide more color on our product customers and go to market progress.
Thank you David building on the strong financial results I'd like to provide more details on the customer and go to market side we.
We continue to see diverse demand for biometric solutions across both government and enterprise sectors organizations are under pressure to not only authenticate identities, but also to ensure that users are live and present without adding friction that combination security plus usability as we're aware has the opportunity to win we.
Our Q3 results. Reflect progress towards sustainable growth.
We are executing with discipline scaling revenue and positioning the company for operating leverage as our Top Line continues to expand.
We are also seeing growing demand in the local government sector with focus on modernizing biometric systems for civil and criminal investigations.
What's that? I'll hand it over to Brian to provide more color on our product customers, and go to market progress,
In the third quarter, we expanded our work with a major U S Federal agency by adding our intelligent <unk>.
Thank you, David. Building on the strong financial results, I'd like to provide more details on the customer and go-to-market side.
To our previously successful program. That's built on decades of Trust aware has established in government and underscores our ability to bring new technology into mission critical programs overall federal demand continues to grow as a result of the new priorities at the federal level that have created both new and expansion opportunities for biometric solutions within these programs.
We continue to see diverse demand for biometric Solutions across both government and Enterprise. Sectors organizations are under pressure to not only authenticate identities, but also to ensure that users are live and present without adding friction that combination Security Plus usability is where aware has the opportunity to win.
However, the federal shutdown has slowed these actual appropriations, which means that some of these programs will likely see delays until that is resolved on the commercial side, we secured new enterprise contracts in the financial services and workforce management sectors, where our customers are looking to reduce fraud and streamline onboarding.
We are also seeing growing demand in the local government sector with focus on modernizing, BI biometric systems for civil and criminal investigations.
In the third quarter, we expanded our work with a major US Federal agency by adding our intelligent liveness.
To a previously successful program, this builds on decades of trust Aware has established in government and underscores our ability to bring new technology into mission-critical programs.
Appointments highlights the flexibility of our platform to integrate into existing identity ecosystems support multiple modalities and deliver high performance biometric capabilities. These contracts also represent solid progress in our land and expand approach over the past six months.
Overall Federal demand continues to grow as a result of the new priorities at the federal level that have created both new and expansion opportunities for biometric Solutions Within These programs.
We continued to make progress in strengthening our pipeline and partner ecosystem as well.
Federal team has engaged across multiple U S and international government programs and our partner strategy is helping us scale without an overinvestment in a direct sales force.
However, the federal shutdown has slowed, these actual Appropriations, which means that some of these programs will likely see, delays until that is resolved on the commercial side, we secured new Enterprise contracts in the financial services and workforce management sectors, where customers are looking to reduce fraud and streamline onboarding.
These investments in expanding and establishing relationships with system integrators and technology partners not only validates our tech, but also extend our reach into larger enterprise and government opportunities, where interoperability certifications and contract vehicles are key buying criteria.
These deployments highlight the flexibility of our platform to integrate into existing identity, ecosystems support, multiple modalities and deliver high performance biometric capabilities.
These contracts also represent solid progress in our land-and-expand approach over the past six months.
We continue to see strong customer retention and growth opportunities.
We expect this to continue for the rest of this year.
Looking forward our go to market priorities are clear within the U S. Federal government deepen our direct engagement across all agencies, while aligning with the biomarin requirements.
We continue to make progress in our Pipeline and partner ecosystem as well. A direct Federal team is engaged across multiple us and international government programs. And our partnership strategy is helping us scale without an overinvestment in a direct sales force.
On the commercial side expand and fraud prone verticals and areas, where biometric adoption is growing such as financial services and travel.
These investments in expanding and establishing relationships with system, integrators and Technology Partners. Not only validates our Tech but also extends our reach into larger educations and contract, vehicles are key, buying criteria,
We continue to see strong, customer attention and growth opportunities.
On the partner side broaden our ecosystem of system integrators identity platforms and device partners to accelerate adoption and scale across the globe.
And expect this to continue for the rest of this year.
Aligned tightly with our customers' most importantly continue to deliver great products as they grow their use of biometrics to protect and automate their businesses.
Looking forward, our go to market priorities are clear within the US federal government deepen, our direct engagement across all agencies, while aligning with the bi American requirements.
Our customers and partners consistently tell us that aware stands out for combining science driven innovation with enterprise grade delivery. That's a differentiator that is working effectively and one we intend to continue building on with that I'll hand, it back to Jay for closing remarks, and the outlook before Q&A JJ.
On the commercial side, expand in fraud-prone, verticals in areas, where biometric adoption is growing such as financial services and travel.
On the partner side. Broaden. Our ecosystem of system. Integrators identity platforms and device Partners to accelerate adoption and scale across the globe.
Thanks, Brian.
As you've heard today, whereas executing on a clear strategy delivering trusted biometric solutions that combine adaptive liveliness best in class interoperability and enterprise grade performance. These capabilities are not just a differentiator they are becoming requirements in a world where fraud is accelerating and did.
Align tightly with our customers, most importantly continue to deliver great products as they grow their use of Biometrics to protect and automate their businesses.
Italy density is central to every interaction.
Our customers and partners consistently tell us that Aware stands out for combining science-driven innovation with enterprise-grade delivery. That's a differentiator that is working effectively, and we intend to continue building on that. I'll hand it back to AJ for closing remarks and the outlook before Q&A. AJ.
Looking forward, we are focused on prioritizing large durable opportunities in federal in enterprise that can translate into multi year recurring revenue and product leverage.
Thanks. Brian, as you've heard today. Where is executing on a clear, strategy? Delivering trusted biometric solutions. That combine adaptive liveness best-in-class, interoperability and enterprise-grade performance.
That means driving deeper adoption within DHS and other federal agencies.
Sometimes directly and sometimes through value partners.
As biometric modernization accelerates.
Expanding.
In enterprise verticals, where identity fraud, and compliance costs, our highest financial services travel workforce management.
And finally, continuing to build the certifications integrations and partnerships that reduce adoption friction and extend our reach.
Interaction looking forward, we are focused on prioritizing large durable opportunities in federal and Enterprise that can translate into multi-year, recurring revenue and product leverage. That means, driving deeper, adoption, within DHS and other federal agencies.
sometimes directly and sometimes through valued Partners as biometric modernization accelerates
We believe this strategy positions aware to deliver not just growth, but sustainable value creation as we scale you should expect to see increasing operating leverage stronger recurring revenue contributions.
expanding.
in Enterprise verticals, where identity fraud and compliance costs are highest
Speaker #4: factors for certain federal or enterprise contracts ?
Financial Services. Travel workforce management.
And a disciplined.
<unk> between innovation and profitability.
Speaker #6: ISO FedRAMP and other certifications such as the Fido certification that we most recently announced are incredibly important certifications for customers to pay attention to .
I am proud of the progress our team is making and the validation we're seeing from customers partners and industry benchmarks with three decades of biometric leadership, a strong foundation of trust and a clear strategy. We believe aware is positioned to lead in this next era of digital identity that.
And finally, continuing to build the certifications Integrations and Partnerships that reduce adoption for friction and extend our reach.
Speaker #6: To require in their RFP processes when they're looking for vendors to request vendors to adhere to and to continue to push the envelope with these certification organizations to protect their enterprises against the most modern threats that are in the market .
We believe the strategy positions Aware to deliver not just growth, but sustainable value creation. As we scale, you should expect to see increasing operating leverage.
Stronger, recurring Revenue contributions.
And a disciplined.
Concludes our prepared remarks, we'll now open the call for questions. Matt Please provide the instructions.
Balance between Innovation and profitability.
Speaker #6: And there are quite modern threats in the market . Cybersecurity attackers continue to get better . They continue to collaborate using commercial tools and a worldwide attack vector nation state actors are continuously trying to penetrate the most critical assets of our country .
Good afternoon, everybody before we move to Q&A I just want to note that a J is traveling back from the money 2020 conference. This return to flight was delayed and there may be some airport noise in the background as we answer your questions.
I'm proud of the progress. Our team is making and the validation we're seeing from customers partners and Industry benchmarks with 3 Decades of biometric leadership a strong Foundation of trust and a clear strategy. We Believe aware is positioned to lead in this next era of digital identity.
That concludes our prepared remarks.
Thanks, David as a reminder, you can submit a question at any time using the ask a question feature in the webcast player.
We'll now open the call for questions. Matt, please provide the instructions.
Speaker #6: And as a nation and as a globe , we need to come together to have a unified set of standards hold vendors accountable , to continue to be able to communicate the importance of protecting them against things like liveness or or generative AI .
I'll pause for a moment to a lot of questions.
Our first question is for David Q.
Q3 revenue grew 33% year over year, almost flat year to date.
Can you elaborate on the drivers of that variance and how investors should think about the sustainability of that topline growth.
Good afternoon, everybody. Before we move to Q&A, I just want to note that AJ's traveling back from the money 2020 conference. His return flight was delayed and there may be some airport noise in the background as we answer questions.
Yeah. Thanks, Matt.
Speaker #6: Deepfake attacks that basically can impersonate other people online through video calls , through voice calls , with very minimal , sophisticated tools . You can imagine with sophisticated tools in the hands of attackers , what they can do is quite dangerous .
So we're striving to build a more sustainable revenue model, but we saw a meaningful license component.
Thanks, David. As a reminder, you can submit a question at any time. Using the ask a question feature in the webcast player.
I'll pause for a moment to allow questions to populate.
Business.
First question is for David.
The timing is right some variability.
The strong year over year growth in Q3 shows that demand is there, but the flat year to date trend reflects the timing dynamic.
Q3 Revenue, grew 33% year-over-year. What was flat year to date?
Speaker #6: So pushing the envelope and staying ahead of the attackers with certifications that can push the vendors beyond what they have today to better protect our customer systems is what we actually here at Aware advocate for daily .
With the management changes that we made this year, we really are sharpening our focus on driving more recurring and predictable revenue. So over time, we can expect for the results and a more consistent growth.
When you elaborate on the drivers of that variance and how investors should think about the sustainability of that top-line growth?
Yeah, thanks Matt.
So, we are striving to build a more sustainable revenue model, but we still have a meaningful license component.
Thanks, David and then another one for you you mentioned that quarterly results may fluctuate based on the timing of customer decisions and license mix can you give more color to the pipeline conversion patterns, how much visibility you have in the near term deals and recurring revenue contribution.
Um business.
That's the timing can create some variability.
Speaker #6: We're talking to all the different testing organizations globally . We're pushing them to address better standards to understand how to protect against digital injection attacks and other extremely important vectors of attacks that need to be secured .
The strong year-over-year growth in Q3 shows that demand is there. But the flat year-to-date Trend reflects the timing dynamic
Okay.
Yes, Thanks, again, Matt kind of similar to the other question with the New management team have really put a stronger emphasis on building a disciplined go to market engine and improving how we able to forecast and manage the pipeline.
Speaker #6: But doing so in a standardized fashion . So customers know that if a vendor comes to you saying that they're the best in the market at something , they have proof to back it up .
With the man management changes that we made this year, we really are sharpening our focus on driving more recurring and predictable revenue. So, over time, we expect smoother results and more consistent growth.
Speaker #6: So we will continue to invest in these different standards . We'll continue to advocate to customers and to the actual certification organizations to push the envelope to become better , because we are aware , view ourselves as a premium provider of biometric systems , the best in the market , with the best depth of technology and expertise to protect against these next generative next generation generative AI attacks , where the only way to determine if somebody is a human and the right human in digital environments is through the utilization of biometrics .
Thanks, David. We got another 1 for you. You mentioned that quarterly results May fluctuate based on the timing of customer decisions.
But where you're really seeing is the health engagement and good visibility into opportunities.
So the timing on customer decisions can still affect the quarterly results.
And license mix, can you give more color to the pipeline conversion? Patterns how much visibility you have in the near term deals and recurring Revenue contribution?
As our process of mature matures and the team gains traction, we do expect to be able to see more consistency and better conversion across our pipeline.
Over time.
Okay.
Thanks, Dave.
Yes, thanks again, Matt. It's uh, kind of so much of the other question with the new management team or really putting a stronger emphasis on building. A disciplined, go to market, engine, and approving, how we able to forecast and manage the pipeline.
Next question is for a J.
Hey, Jay you called out the federal budget delays and shutdown impacts on appropriations, how significant has that been the near term bookings and are those revenue is expected to shift into FY 'twenty six.
What we're really seeing is a healthy engagement and good visibility into opportunities though, the timing on customer decisions, can still affect the quarterly results.
Speaker #4: Thanks , AJ . Our next question is for David . David . Operating expenses rose due to investments in sales , marketing , and products .
Okay.
Yes.
As a process of mature mature. As a teen gains traction, we do expect to be able to see more consistency and better conversion across the pipeline.
Yes.
Over time.
The government shutdown has impacted businesses across the board and I most.
Speaker #4: How should we think about expense levels and operating leverage in FY26 as revenue scales?
I feel sorry for obviously the people that are furloughed.
Those individuals are going through a very difficult time, right now trying to sustain their livelihoods and pay the rent.
Speaker #1: Yeah . Thanks , Matt . So yeah , so operating expenses as expected . And as we kind of mentioned last quarter did increase as we invested in the sales marketing and go to market and product positioning for the company .
For families.
Next question is for AJ, AJ, you called out the federal budget, delays and shut down. Impacts on Appropriations out, significant has that been the near-term. Bookings, and are those revenues expected to shift into FY 26.
Daily expenses for us.
There is an impact to near term bookings.
Speaker #1: Growth . And we will continue invest there when we see a clear line to driving top line revenue expansion . When the opportunity is there , we'll lean in and invest and accelerate growth .
However, most of the <unk>.
Conversations are still occurring.
And we would expect to see all of that money still flow.
Yes. The, the government shutdown is impacted, uh, businesses across the board. And I most, uh, I feel most sorry for obviously the people that are furloughed. Um,
And a higher urgency to be able to deploy that budget coming through in the near term.
Speaker #1: So also keeping a focus on efficiency .
So we anticipate significant volume.
Those individuals are going through a very difficult time right now, trying to sustain their livelihoods and and pay the rent, uh, pay for the families.
Speaker #4: Thanks , David . AJ , can you share any color on the national ID contract ?
Of deal flow and conversations once the shutdown is over.
The total amount of budget allocated is still going to remain the same.
Daily expenses for us. Um, there is an impact in the near term bookings, uh, however, most of the conversations are still occurring.
Speaker #6: Sorry , but at this point in time , we're not in a position to be able to share any color on the national ID contract other than what was already shared .
And the urgency to deploy the capital to <unk>.
Through the system.
The antiquated systems all of the federal government.
Speaker #6: We are still in a position where we want to be able to pursue global business through partners in such a way that we can make sure that we can cover the globe and the needs of all countries with their identity , needs .
Yes.
On the identity as a service is still going to have a very high sense of urgency.
so, we anticipate significant volume, um,
Great. Thanks, Hey, Jay.
Another one for you as enterprises move towards biometric anchor digital identity, who do you view as your primary competitors in this space.
Speaker #6: But focus our specifically towards direct conversations that we have here in the Americas So we're spending the majority of our resources here on the Americas , North America , in particular , given our domestic focus , given our large base of us citizen biometric scientists and given the desires and the demands here in the market , along with the large , the larger scale here in the market .
What differentiates <unk> awareness platform technically and commercially.
Sure from a competitive set.
Of deal flow and conversations once the shutdown is over, uh, the total amount of budget allocated is still going to remain the same and the urgency to deploy the capital to improve the systems, uh, the adequate systems of federal government. Um, on the identity systems is still going to have a very high sense of urgency.
On the awareness platform in particular I'll speak to the platform first.
Great. Thanks. AJ.
Sure.
This is very much a buy versus build.
Additives.
With regards to existing.
Another 1 for you as Enterprises move toward biometric, anchor digital identity. Who do you view as your primary competitors in the space? What differentiates a where is awareness platform technically and commercially.
Large enterprises looking to try to deploy biometric that scale.
Speaker #6: But we believe that national ID programs are not to be ignored ,
Largest competition is actually internal development.
And a desire to be able to have an own your own platform and continue to increase and modernize its capabilities.
Sure from a competitive set, you know, on the awareness platform in particular, I'll speak to the platform first.
Um,
This is very much a buy versus build.
We see is significant overlap between all of these different companies that are looking to try to build these types of platforms and that they return to a model where economies of scale will help them to save money and increase capacity and capabilities much faster through an outside vendor.
Competitive set. So with regards to existing
Large Enterprises looking to try to deploy Biometrics at scale.
Our largest competition is actually internal development.
Such as aware.
And a desire to be able to have and own your own platform and continue to increase and modernize its capabilities.
With regards to the individual components and the products that we actually serve and develop internally there are other competitors in the market that develops.
<unk> styles of biometric capabilities with different.
Strengths.
Those partners are those companies are in fact partners for us in the awareness platform.
What we see is significant overlap between all of these different companies that are looking to try to build these types of platforms. And that they would turn to a model where economies of scale will help them to save money and increase capacity and capability, much faster, through an outside vendor such as aware
While we still have an element of competition.
When it comes to proving who's best at which component of the technology overall.
With regards to the individual components, in the products that we actually serve and develop internally. There are other competitors in the market that develop different styles of biometric capabilities with different
What's most important for us is that customers get the best.
strengths.
Vendors in the market to serve their individual needs and their use cases, so that.
Those partners are those companies are in fact Partners For Us in the awareness platform.
They have.
While we still have an element of competition.
Pleasurable experiences for their consumers for their customers and secure experiences and that could be different in a physical environment as you can imagine <unk>.
When it comes to improving, who's best at which component of the technology overall?
What's most important for us, is that customers get the best.
Airport environment.
In our border.
Border environments.
No.
Files of biometric and types of biometric technologies that you would deploy in those environments will be very different than the silos.
Vendors in the market to serve their individual needs and their use cases. So that
They have.
Technology that you would deploy over people's mobile devices to be able to onboard into our financial services products.
Remotely.
Which would be very different than the style of product that you'd want to use on a desktop computer, allowing a workforce.
Pleasurable experiences for their consumers for their customers and secure experiences and that could be different in a physical environment as you can imagine in an airport environment in uh border environments.
Those.
An application to protect.
Let's say new hires for a password reset.
Styles of biometrics and types of biometric technologies that you would deploy in those environments would be very different than the style of.
To secure your enterprise against the largest vulnerability today and cyber security attacks, which is password compromises.
technology that you would deploy over people's mobile devices to be able to onboard into a financial services product.
Remotely.
So the different components of biometric technology, we go Intuit outerwear no way, we can see the best at everything so.
Which would be very different from the style of product that you'd want to use on a desktop computer, allowing a workforce.
Um, application to protect.
Let's say new hires.
So we select the specific components that we believe we'd like to be the best and.
Or a password resets.
The most important and also that we have the capability of being the best <unk> and <unk>.
We look to partner with others, who we feel in certain use cases are the best technologies for our customer base.
To secure your Enterprise against the largest vulnerability today in cyber security attacks, which is password compromises.
So the different components of biometric technology. We go into it out of where knowing we can't be the best at everything.
Thanks, Hey, Jay.
How do you prioritize new certifications like ISO or fed ramp and your roadmap and are there any gating factors for certain federal or enterprise contracts.
so we select the specific components that we believe we'd like to be the best in that are the most important and also that we have the capability of being the best in
Okay.
Okay.
and we look to partner with others who we feel in certain use cases are the best technology for our customer bits.
ISO fed ramp and other certifications.
Thanks AJ.
Such as the Fido certification that we most recently announced.
Our incredibly important certifications for customers to pay attention to.
Another 1 for you. How do you prioritize new certifications like ISO or fed ramp in your road map?
To require in their RFP processes, when theyre looking for vendors to request vendors to adhere to.
And to continue to push the envelope with the certification organizations.
To protect their enterprises against the most modern threats that are in the market.
And there are quite modern threats in the markets cyber.
Cyber security attackers continue to get better.
They continue to collaborate using commercial tools.
A worldwide attack vector.
Nation State actors are continuously trying to penetrate the most critical assets of our country.
And as a nation.
And as the globe.
We need to come together to have a unified set of standards.
Two.
Old vendors accountable.
We continue to.
You'd be able to communicate the importance of protecting them against.
Things like liveliness.
Or or generative AI.
<unk> attacks.
That basically can impersonate other people online through video calls through voice calls.
With very minimal.
Sophisticated tools you can imagine.
With sophisticated tools in the hands of attackers.
They can do with quite dangerous.
So pushing the envelope and staying ahead of the attackers with certifications that can push the vendors beyond.
What they have today.
To better protect our customer systems is what we actually hear it aware advocate for daily.
Talking to all the different testing organizations globally.
We're pushing them to address better standards.
Understand how to protect against digital injection attacks and other.
Extremely important vector of attacks.
It needs to be secured but doing so in a standardized fashion so customers know.
That is the vendor comes to you are saying that they are the best in the market, it's something they have proof to back it up.
So we will continue to invest in these different standards will continue to advocate for customers and to the actual certification organizations to push the envelope to become better because we had aware view ourselves as a premium provider of biometric systems. The best in the market with the best depth of technology and expertise.
Protect against these next generators next generation generative AI attacks.
The only way to determine.
If somebody is a human and the right healing.
And digital environments is through the utilization of biometric.
Thanks, a J. Our next question is for David David operating expenses rose due to investments in sales marketing and products.
Should we think about expense levels and operating leverage in FY 'twenty six as revenue scales.
Yeah. Thanks, Matt So, yes, so operating expenses as expected and as we mentioned last quarter. This increase as we invest in.
Sales marketing and go to market and product positioning for the company growth.
And we will continue to invest there with when we see a clear line of driving top line revenue expansion.
When the opportunity is there we will lean in and invest and accelerated growth. So while also.
Also keeping a disciplined focus on.
On efficiency.
Thanks, David Hey, Jay can you share any color on the national IV contract.
Sorry, but at this point in time, we're not in a position to be able to share any color on the national IV contract other than what was already shared.
We are still in a position, where we want to be able to pursue.
Global business through partners in.
In such a way that we can make sure that we can.
Cover the globe and the needs of all countries with their identity needs.
Focus our resources specifically.
Towards direct conversations that we have here in the Americas.
So we're spending the majority of our resources.
On the Americas.
North America in particular.
Given our domestic focus.
Given our large base of U S citizen biometric scientists.
And given the desire and the demand here in the market along with the larger the larger scale here in the market.
But we believe that national Andy programs are not to be ignored, but rather.
So we're constantly looking for the best partners in the markets.
And I would encourage any partners globally looking to work with countries. Okay.
They are national IV programs to better secure.
The needs of their citizens and residents.
To be able to increase their access to federal government benefits systems, whether it's the United States or globally.
To reach out to our partnership team here at aware.
And be able to encourage them to choose best in class technology with a partner they can trust.
That will have their backs.
Alright.
In the global fight against Nation State actors that are doing bad things.
Thanks, Sanjay we received another question for you is aware considered enabling interactions with smaller platforms.
Yes.
That's a great question.
I would love to have a little bit more color in a little bit more follow up with the Oscar.
To specifically address which smaller platforms that they're requesting I'm talking about.
But as we've learned through the years.
Smaller platforms can grow very quickly in this economy.
And we've seen.
You have the right team the right Investor base.
And the right customer relationships and the right product.
Pretty expansive scale.
So while most companies are only choosing to be able to work with the largest partners in the market. The ones that have raised the $200 million to $400 million to deploy identity systems and identity verification capabilities.
We are also paying attention to the smaller <unk>.
Anders and the market and the smaller partners in the market.
But we are prioritizing the ones that we believe have the most.
Opportunity for scale based on the management team based on the customer contacts based on the products that they have and the capabilities for scale.
Because we can't serve and be everything to everyone.
So our prioritization process and a vetting process ahead of time is extremely important for us. So that we can align resources effectively and better serve our partners and enable them for the kind of growth that they deserve.
Thank you AJ David at this time. This concludes our question and answer session. Your question wasn't answered. Please E mail the IR team at AWS Gateway Dash GOP Dot 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 <unk> website.
For joining us for <unk> third quarter 2025 conference call you may now disconnect.
So a prioritization process and a vetting process ahead of time is extremely important for us so that we can align resources, effectively and better.
Thank you, AJ David at this time, this concludes our question and answer session. Your question wasn't answered. Please email our team at awre at gateway-gresham.
Or we conclude I'd like our mind everyone that a replay of today's call will be available via Link in the investor relations section of where its website.
Thank you for joining us for the awards. Third quarter 2025 conference call. You may now disconnect.