Aware Reports Third Quarter 2022 Financial Results

Successful Building Sale Fuels $2.6M of Net Income for Aware

Company Launches AwareID, its Multi-Modal SaaS-based Authentication Platform

BEDFORD, Mass., Oct. 27, 2022 (GLOBE NEWSWIRE) — Aware, Inc. (NASDAQ: AWRE), a number one authentication firm making use of confirmed and trusted adaptive authentication to resolve on a regular basis business challenges with biometrics, in the present day reported monetary outcomes for the third quarter ended September 30, 2022.

Third Quarter 2022 and Recent Operational Highlights

• Generated income of $3.0 million, with recurring income rising $0.3 million compared to the primary 9 months of final 12 months, to $7.1 million year-to-date.
• Launched AwareID, its modern multi-modal SaaS-based authentication platform, early within the fourth quarter on the Money2020 world fintech commerce present in Las Vegas.
• Appointed new Chief Revenue Officer Craig Herman, who will spearhead new revenue-generating efforts that concentrate on rising topline income and increasing partnership packages.
• Moved its firm headquarters to a state-of-the-art constructing in Burlington, MA that’s extra intently aligned with trendy hybrid working preparations.
• Presented Aware’s premier biometrics-based options at Identity Week America 2022, 2022 America Digital Conference, Febraban Tech 2022, and 2022 IAI Annual Educational Conference, highlighting the corporate’s unparalleled experience in biometrics.

Management Commentary
“Our revenue performance in the third quarter was impacted by the persistent macroeconomic headwinds that have elongated customer purchase decisions,” mentioned Robert Eckel, Aware’s Chief Executive Officer and President. “Some of our existing and prospective customers were eagerly awaiting the commercial launch of our new SaaS offering, AwareID, which combines lightning-fast identity verification with world-class authentication. The initial feedback and interest in AwareID are encouraging and we expect it to drive higher sales and recurring revenue in the future. Along that line, AwareID marks another important milestone in our SaaS transformation, which continues to drive higher recurring revenue for our business.

“Our top priority remains the strong execution of our multi-pronged growth strategy, which has solidified Aware’s foundation and positioned the company to drive scale and further expand into SaaS. Furthermore, as our transition to a subscription-based business model remains ongoing, we are supported by a strong balance sheet with more than $31 million in cash, cash equivalents, and marketable securities and a robust pipeline of new opportunities.”

“We are focused on accelerating our expansion into the commercial SaaS market and bolstering recurring revenue through organic growth and a more focused enterprise sales team. A key element of our go-to-market strategy is partnering with strategic value-added resellers and integrated product resellers that can broaden the global reach of our dynamic biometrics-based solutions. Our new Chief Revenue Officer, a proven leader with significant experience building effective enterprise sales teams, is implementing an enhanced go-to-market strategy, bolstered by new customer success initiatives. With his emphasis on swift execution, upselling, and the development of a strong partner program, we expect to drive accelerated adoption of our AwareID offering and maximize our revenue generating opportunities.”

Third Quarter 2022 Financial Results
Revenue for the third quarter of 2022 was $3.0 million, in comparison with $4.2 million within the second quarter of 2022 and $4.2 million in the identical year-ago interval. The sequential and year-over-year lower in income was primarily as a consequence of macroeconomic headwinds and buyer orders that have been postponed to the fourth quarter of 2022.

Net earnings for the third quarter of 2022 totaled $2.6 million, or $0.12 per diluted share, which compares to internet lack of $1.3 million, or $(0.06) per diluted share, within the second quarter of 2022 and internet lack of $1.6 million, or $(0.07) per diluted share, in the identical year-ago interval. Net earnings for the third quarter of 2022 included a $5.7 million one-time acquire associated to the sale of the corporate’s constructing positioned in Bedford, MA in July 2022.

Adjusted EBITDA loss for the third quarter of 2022 totaled $2.5 million, in comparison with adjusted EBITDA lack of $0.8 million within the second quarter of 2022 and adjusted EBITDA lack of $1.0 million in the identical year-ago interval. The lower in adjusted EBITDA was primarily as a consequence of decrease income.

Cash, money equivalents and marketable securities totaled $31.0 million as of September 30, 2022, in comparison with $25.0 million as of June 30, 2022 as we accomplished our sale of our firm headquarters for $8.5 million and repurchased 75,000 shares of the corporate’s inventory for $160,000, partially offset by money utilized in operations.

Nine Month 2022 Financial Results
Revenue for the 9 months ended September 30, 2022 was $11.9 million, in comparison with $12.9 million in the identical year-ago interval. The lower in income was primarily as a consequence of macroeconomic headwinds and buyer orders that have been postponed to the fourth quarter 2022.

Net earnings for the 9 months ended September 30, 2022 totaled $31 thousand, or $ 0.00 per diluted share, which compares to internet lack of $4.6 million, or $(0.21) per diluted share, in the identical year-ago interval.

Adjusted EBITDA loss for the 9 months ended September 30, 2022 totaled $3.9 million, in comparison with adjusted EBITDA lack of $3.0 million in the identical year-ago interval. The lower in adjusted EBITDA loss was primarily due decrease income.

Webcast
Aware administration will host a webcast in the present day, October 27, 2022, at 5:00 p.m. Eastern time to debate these outcomes and supply an replace on business situations. An issue-and-answer session will observe administration’s ready remarks.

Date: Thursday, October 27, 2022
Time: 5:00 p.m. Eastern time (2:00 p.m. Pacific time)
Webcast: Register Here

The presentation can be made accessible for replay within the investor relations part of the Company’s web site. The audio recording can be accessible for roughly 90 days following the dwell occasion.

About Aware
Aware is a world authentication firm that validates and secures identities utilizing confirmed and trusted adaptive biometrics. Aware’s software program and SaaS choices handle the rising challenges that authorities and industrial enterprises face in figuring out, authenticating and securing people via frictionless and extremely safe consumer experiences. Aware’s algorithms are primarily based on probably the most various information units on the planet and could be tailor-made to the distinctive safety and necessities of every buyer. The firm empowers customers to have management over identities via clear, intuitive opt-in/opt-out options, serving to them really feel safe and enhancing their lives. Aware is a publicly held firm (NASDAQ: AWRE) primarily based in Burlington, Massachusetts. To be taught extra, go to www.conscious.com or observe Aware on Twitter @AwareBiometrics.

Safe Harbor Warning
Portions of this launch comprise forward-looking statements relating to future occasions and are topic to dangers and uncertainties, resembling estimates or projections of future income, earnings and non-recurring fees, and the expansion of the biometrics markets. Aware needs to warning you that there are elements that would trigger precise outcomes to vary materially from the outcomes indicated by such statements.

Risk elements associated to our business embrace, however are usually not restricted to: i) our working outcomes could fluctuate considerably and are troublesome to foretell; ii) we derive a good portion of our income from authorities clients, and our business could also be adversely affected by modifications within the contracting or fiscal insurance policies of these governmental entities; iii) a major industrial marketplace for biometrics expertise could not develop, and if it does, we might not be profitable in that market; iv) we derive a good portion of our income from third occasion channel companions; v) the biometrics market could not expertise important progress or our merchandise could not obtain broad acceptance; vi) we face intense competitors from different biometrics answer suppliers; vii) our business is topic to fast technological change; viii) our software program merchandise could have errors, defects or bugs which might hurt our business; ix) our business could also be adversely affected by our use of open supply software program; x) we depend on third occasion software program to develop and supply our options and important defects in third occasion software program might hurt our business; xi) a part of our future business depends on market demand for, and acceptance of, the cloud-based mannequin for the usage of software program: xii) our operational programs and networks and merchandise could also be topic to an rising danger of regularly evolving cybersecurity or different technological dangers which might end result within the disclosure of firm or buyer confidential data, harm to our status, further prices, regulatory penalties and monetary losses; xiii) our mental property is topic to restricted safety; xiv) we could also be sued by third events for alleged infringement of their proprietary rights; xv) we should appeal to and retain key personnel; xvii) our business could also be affected by authorities laws and antagonistic financial situations; xviii) we could make acquisitions that would adversely have an effect on our outcomes, xix) we could have further tax liabilities; and xx) we imagine the results attributable to the COVID-19 pandemic will doubtless have an antagonistic affect on our income over the following a number of quarters.

We refer you to the paperwork Aware recordsdata every now and then with the Securities and Exchange Commission, particularly the part titled Risk Factors in our annual report on Form 10-Okay for the fiscal 12 months ended December 31, 2021 and different studies and filings made with the Securities and Exchange Commission.

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CONSOLIDATED STATEMENTS OF OPERATIONS
(In 1000’s, besides per share information)
(unaudited)

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CONDENSED CONSOLIDATED BALANCE SHEETS
(In 1000’s)
(unaudited)

Non-GAAP Measures

We outline adjusted EBITDA as U.S. GAAP internet loss plus depreciation of mounted property and amortization of intangible property, stock-based compensation bills, different (expense) earnings, internet, and earnings tax provision. We talk about adjusted EBITDA in our quarterly earnings releases and sure different communications, as we imagine adjusted EBITDA is a crucial measure. We use adjusted EBITDA in inner forecasts and fashions when establishing inner working budgets, supplementing the monetary outcomes and forecasts reported to our Board of Directors, and evaluating short-term and long-term working developments in our operations. We imagine that the adjusted EBITDA monetary measure assists in offering an enhanced understanding of our underlying operational measures to handle the business, to guage efficiency in comparison with prior durations and {the marketplace}, and to ascertain operational objectives. We imagine that the adjusted EBITDA changes are helpful to buyers as a result of they permit buyers to guage the effectiveness of the methodology and data utilized by administration in our monetary and operational decision-making.

We outline recurring income because the portion of Aware income that’s primarily based on an annual time period or shorter association and is more likely to proceed sooner or later, resembling annual upkeep or subscription contracts. We use recurring income as a metric to speak the portion of our income that has better stability and predictability. We imagine that recurring income assists in offering an enhanced understanding of effectiveness of our efforts to transition to a subscription-based business mannequin.

Adjusted EBITDA and recurring income are non-GAAP monetary measures and shouldn’t be thought of in isolation or as an alternative to monetary data offered in accordance with U.S. GAAP. These non-GAAP monetary measure might not be computed in the identical method as equally titled measures utilized by different corporations. We anticipate to proceed to incur bills just like the monetary changes described above in arriving at adjusted EBITDA and buyers shouldn’t infer from our presentation of this non-GAAP monetary measure that these prices are uncommon, rare or non-recurring. The following desk consists of the reconciliations of our U.S. GAAP internet earnings (loss), probably the most straight comparable U.S. GAAP monetary measure, to our adjusted EBITDA for the three and 9 months ended September 30, 2022 and 2021 and for the three months ended June 31, 2022 and (ii) our U.S. GAAP income, probably the most straight comparable U.S. GAAP monetary measure, to our recurring income for the three and 9 months ended September 30, 2022 and 2021.

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Reconciliation of GAAP Net earnings (loss) to Adjusted EBITDA
(In 1000’s)
(unaudited)

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Revenue Breakout
(In 1000’s)
(unaudited)

Aware is a registered trademark of Aware, Inc.

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