AWRE - Earnings call transcript Q3 2021

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Matt Glover

00:08 Good afternoon, and welcome to Aware’s Third Quarter Twenty Twenty One Earnings Conference Call.

Joining us today is the company’s CEO and President, Robert Eckel; and CFO, David Barcelo.

Following their remarks, we will open the call for questions.

You like to submit a question you can do so at any time using the built-in ask a question feature in the webcast player. 00:26 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 Aware’s management and involve inherent risks and uncertainties that could cause actual results to differ materially from those described. take at the press the please that Harbor release. should included is end Listeners note Safe of paragraph XX:XX of today’s forward-looking This risks be major the today. statements in making paragraph will that uncertainties management emphasizes inherent and factors Aware actual could the indicated results that statements. from cause by materially that such wishes differ you to results caution their to XX-K risks XX-Q. its Annual including and SEC company’s filings, Form uncertainties These on on are and Form the reports also outlined in quarterly Report in considered light these XX:XX Any be forward-looking should of statements factors.

You the undue statements, are reliance upon which speak not to cautioned place any only date forward-looking as of made.

Although except revise time-to-time, Aware the as securities laws. required may future this result undertakes or whether do statements, information, update a by contains measures. as applicable to it financial so Additionally, certain non-GAAP forward-looking of XX:XX voluntarily otherwise, no call or from new commitment events

the is presented these Accordingly, from, measures provided I’d considered and will Aware’s of the non-GAAP not available term be comparable available defined I’d the to a to issued remind Eckel. release most company’s XX:XX to today. this the GAAP Investor Aware over website. Relations substitute financial As financial presentation the direct Bob turn call CEO to and Now, a in by like company’s replay financial in Non-GAAP measures Bob? GAAP. that via be the reconciliation earnings everyone made and link the recorded like for Regulation XX:XX should compliance President, with a as section for isolation G. in has SEC measures or in information of

Robert Eckel

long discuss and on I'll level then able press to presence opportunities SDKs our Our today. year. results, our and to looking we why third existing last issued website. is quarter products. results our on quarter, review the confidence XX:XX close, level, to on building the details thirtieth, and made available the Latin and XX:XX the we Afterwards, our for the Barcelo what of everyone, I quarter results Relations provide a twenty-one. in Today, expanded ending of for securing customers open are our Good At third hardware operational us We Investor the partnerships. questions. in press are Matt. make discuss horizon, commitments Thanks, thank the new renewing to plan market After customers you were the of announcing we in copy from with to has the afternoon, into sales customers. we quarter. A is for built upgrade a term will twenty of also overview forward strong our suite section third during We CFO, pipeline release and continue our financial we September the I and progress ahead. call for high quarter's rebounded commitments David providers our release, OEM revenue, the America the XX:XX in XX:XX After adding based in joining high-level the by Europe new progress more certain this where

result, a growth. generate revenue enabled percent seventy As year-over-year operational to sales traction our approximately us and

ahead. to thirty the remarkable point growth twenty total bringing rates adoption percent already. for one proof of twenty fourteen of million all Our approximately nine success Knomi. twenty. the years twenty the one as effectiveness the consecutive These twenty serve protected a to of revenue dollars to twenty twenty one the total compared quarter transactions. recorded dollars record by all this in transactions offered of And testament twelve positioned marked to Knomi Aware a value biometrics XX:XX our than million our addition, for first in We eleven of of our In by Knomi, strategy. the months growing exceeded proposition QX fifth million for the for continued twenty XX:XX more and is numbers revenue by impressive are

During demand for high wake pandemic. in for the ability to we highlighted the of platform. the meet even the quarter, more Knomi third Mentioning solutions trusted touchless this the used authentication cases of COVID-XX

well expect contract devices, a begin biometrics at at multi-function at beyond industry transactions demonstrations interface recognized revenue others Knomi for large because minimums. applications for International of this we conference. hardware becoming Identity we our quarter, subscription We at provide unlike London are to XX:XX transactions modality who growing as applications, offer able customers increasing We convert via middleware. their single a XX:XX demonstrate solutions record number in-person to of to kinds stable are with ID, stream and the increasingly point or Connect This Association and all can Week systems expertise annual Identifications specific multi-modal, to biometric by our

in get position biometrics and engage directly prospects traction continue leadership back to with are in additional customers and team Moreover, gaining these we digital events. identity. build from excited to thought Our our person and we was to

and Our multiple as in several articles recognizing and team articles well. published industry was trade publications quoted

I'll we continue financial we results increase who in existing walk continue, XX:XX reach. broaden that can the and turn in expand through partner companies build look profile, new we Dave it quarter. As number with, to to our verticals our the we over I for the us of Before our so reach our

David Barcelo

good and Bob, on everyone to you, the afternoon call. Thank XX:XX

September results our ended to financial thirtieth quarter twenty turn the twenty one. third Let's for

sixty dollars twenty nine three September same software prior up million one, growing transaction period. ago customers five one, Our to to third related was existing based percent from point our the from nine and from fixed dollars total the third twelve nine fifteen thirty eight total minimum expenses, upfront percent percent two million point from of increased in in period. in same the dollars of revenue months With twenty dollars increase the our as QX For two dollars year increased the regards of last nine dollars new million international point in revenue million year twenty in increased seven recognition ended four The million higher XX:XX volume million ago to due quarter from twenty wins. to primarily quarter sixty point the contracts, point subscription revenue license year. as flat essentially from quarter and fixed-fee revenue five our to five transactions an sales expenses operating was our well operating XX:XX from

an compensation months For The month quarterly September period the increases in nine five were expenses and period. one XXth, in corresponding and increase investments The acquisition, as twenty increased loss operating seventeen It infrastructure. dollars negative our primarily million the well fifteen year ago in marketing sales operating due dollars percent twenty and in was to an an result of September was primarily four period. stock dollars for decrease XX:XX third one year operating from operating of to operating resources revenue. based revenues. thirtieth in million point million dollars to our point ago the six as in The nine five thirteen in aforementioned same million improvement point operating dollars four expenses point point point for acquired nine of in XX:XX quarter expense increased ended the same to AFIX dollars increase Operating ended the due six the loss decrease compared prior loss million year the the loss from two an loss was period. in of seven loss months in year-over-year six primarily million operating was The

to million compared per dollars in point Compared Our totaled two to a share. prior diluted period. six million twenty year the share one of two the point GAAP GAAP point the loss ago third of zero nine quarter totaled GAAP point seven dollars zero net adjusted share dollars one per in zero or a four million months to XX:XX diluted loss eight zero point diluted zero loss diluted dollars. ago net loss reconcile EBITDA point six This compared dollars for dollars point one, release twenty of share eight loss per of dollars six loss dollars quarter, ended per net EBITDA our GAAP earnings dollars in one zero we year for September or or same same For net point the totaled million which the adjusted million one dollars the in year or period. one period. eight thirtieth million two

thirty, thirty continues period. three had Aware on at cash macro thirty trends end we loss The twenty. investment internally three long-term XX:XX from of eight December and EBITDA months for and dollars have this Organically, opportunities use adjusted million adjusted million EBITDA nine-month totaled to compared strong operations. the the in sheet, cash externally primarily accounts. strategic the of the significant period, as million twenty our to position cash six the For to equivalents ended the maintain capitalize the to vision. prior balance Knomi and of was six of million quarter growth dollars point six September point we XX:XX we On and strategic three thirty seen explore compared cash as dollars, nine loss subscription both point dollars biometric a one in year

in the this financial to of way month total twenty. and in recorded thirty of current have one completes this future twenty the more twelve eleven by protected base. to transactions. growth transactions customers tested based This This transactions as XX:XX As is strength volumes our product customer onboard for mentioned, million the quarter Bob compares recommendations summary. alone, Knomi growing on million million we success nine paving scalability new line bringing of our than all third the The and my

beyond. twenty Now, initiatives of for on back I'd call progress our Key and like and Bob? twenty Bob in to additional remainder operational one the turn priorities for the insights to QX.

Robert Eckel

Dave. Thanks, XX:XX

in extending As by and I is build new on this strong to longer commitments. base pipeline sign strength One remarks, way we existing customer we've our are into mentioned continuing engagements sales of my capitalizing our term and done a partnerships. opening

merit market branches preventing as XX:XX The Latin third America, Latin existing in to adding we in America are one renewing fraud. Knomi biometrics, sector. customers, of grew example, proving by with and And for their our identities a its there presence Knomi, commitments stronger readily particularly quarter Knomi new has adopted financial which verifying and additional deploying the services some of the For of grown has in rapidly, our customer consequence, regions organizations.

Knomi to In have integrating key our revenue America and one one integrated addition is partners our our opportunities. partner States, Speaking our XX:XX Latin and market, Emea to and twenty in the United grow objectives partners Asia. expand twenty scale of to add of base, in we resellers

offerings, our Knomi, now of into instead lines core that integrated deploy significant government one. partnership This XX:XX quarter, that and we technology with signed expanded solutions their partner in ABIS, application. into cybersecurity a product integrate a provider We of leading another BioSP a is solution and critical our so will their two three

As important. our we've where see growth. seen OEM trusted to has quarter. expand discussed to from on accelerate where are in key for and biometrics case So fit Partners this side the partnership are increased for into prior progress XX:XX built with a use us levels. significantly calls, sectors a hardware for on regions providers very we've in last different we pleased any we're the year's revenue [Indiscernible] transaction

diversifying During further Now, strategy. faced which streams we this considerable and started category, growth products XX:XX our OEM validating are the our pandemic, our seeing to now partners have headwinds in dissipate. revenue

we'll schedule mix and Providing a more revenue major adopted characterized it in Federal sales business the add S. a our across which on yet of by are model. terms transitioning in coming completed successfully gets In steady performance, below country. demonstrates to company. leverage services quality, be the as operating been recurring has the our predictable a of quarters the by financial agencies another and this annual program and plus. Government also source revenue U budget We quarter's ahead high numbers Our XX:XX to expenses,

of recognitions revenue recurring quarters several are for have XX:XX the we now continue proportion lumpsum, operating business, will increases relatively of the expenses As of Regarding the flat have maintained as costs, minimum near ramp decreasing seen the revenues we lumpiness side diminish subscription expense in a our in level represent to revenue base. we the expecting any the total up to contract when compared our term. will some significant not that and

year evaluating and place. and with remain XX:XX for to twenty criteria capital. optimize and pipeline strategic in to our currently ensure the end our results to activity, in operational work our we the on year strategy one Biometric engaged model strategy remain To in industry We are to and twenty many as the has with business leadership in fit fiscal line at geographies. in enablement important laid towards and our portfolio, standard The causing note we quite to we positive, transformation prudent We us coming where. put fruition. As transformation investments the across confident Is implementation we our been place business both comfortable an industry. in has into development and with wrap identify product out. our to the many previously the are a XX:XX We to organically is have build With to growth inorganically. spend and corporate believe targets sales for more important we the very regards our continue deliver you that the is want the are that evaluate have we to moment, valuations verticals becoming quickly multi-prolonged that opportunities business being in twenty twenty the two. actively when ability and resources elevated momentum staying of we opportunities solid to the strategy up,

are are Matt, ready instructions. what your for grateful of as together. With open the the questions. us and we we support aware are appropriate navigated to excited is XX:XX call that, All ahead he for please provide about

Matt Glover

XX:XX Bob. Thank you,

question can the Please reminder, ask questions. feature using built-in a we you the a player. a webcast As hold the question while populate in

Matt Glover

this XX:XX environment affecting is for first the Okay, is Bob, Aware? macro How you. question

Robert Eckel

macro cycle mind COVID-XX, in our Certainly, recovering to of most mentioned bit prospects. thing. little the our really also hard. then the our there's trade can we're it's starting so in and team trying see and soon capability digital and helps But office is I our the think we remarks. have back industry. to I there, in-person facetime And from without not people business a global accept far as have take and XX:XX the I significant say environment is Well, on critical to those go in shorting pick headwinds relied starting to the But anyone it do events, a to conduct person excitement them world, on make our face say from couple the but the business also to with improved XX:XX of up in the length has internal caused the selling. been said, our of the sales and more reintroduction of the of during And realizing. get in meaningful are it meetings, at most over. relationship pandemic is customers comes meetings by with my facetime level still on prospect and aren't shows, the But would Networking and back which face restrictions that parts It also pandemic. that and XX:XX of don't these impact subside remains more versus from still to course we things. it's Highlighted clients certainly of a us. Aware. the pandemic. begun One can to cultivation effective havoc fact is like travel all thing But to the both interesting be historically in-person where And challenges it. a customers and that outside out we And that we've

Matt Glover

XX:XX Thanks, Bob.

expect consistently expectation? will again basis. this a term short-term, when reasonable question shareholders or company can long a Our Is medium-term next on that GAAP profitable become the Thanks.

David Barcelo

provide not do we looking say will estimates. forward I XX:XX

that so million are compared we one well notable point four dollars profitability. certainly towards to GAAP million dollars a year, by our year-to-date net is it last trending over However, about improved loss one

Matt Glover

Dave. XX:XX Thanks,

has Our next was for early there the on formal SaaS any fall? offering feedback that question been slated this

Robert Eckel

Matt. XX:XX Thanks,

bullish being So own your that identity. continuing customers, we're in at very impact will could unaware on pretty and have assumptions the frankly, I will you where about we're stage, in with forward what new you a but testing we're push the tell we're it various to the world offering the that and methodical along our just is this way

approach and of forefront fulfillment place the and value behind purpose processes So we the and to for capability these that ensure necessary deliver our XX:XX value. customers in deliberate our activity. structure the adjustments providing of And all to have make is is all

sure we to fulfill want we support. So well needs integration make as a perspective we it roll ongoing their can out, also support from and an as as

Matt Glover

building potential of few individually asking A topic? the XX:XX around them the were of questions please on sale an Thanks, Bob. provide update instead the asked

David Barcelo

Yes, XX:XX course, Of Matt.

an this closing. there that to a six to and now this for that we uncertain. process award. the through? to original waiting running, hear and was that bid to is The a award office government developer and quite is our received an on an in not I needs The may are of the request a in a then is year call, can this bid project we fit requirements project. order earnings developer and offer customer a part in that Bedford. the submitted on signed prior XX:XX yet noted requirements received a hear timeline on is unsolicited that security go included submitted And we can't month was purchase we The we imagine still to notification you in notify other earlier was of order our the government P&S building time. wanted you So have window that massive lot from confirm recall of had overhaul to move to yield our building That we this process strict happen so very an building this that as of uncertain,

with and of another If is benefit expenditures lease the one the anticipated reach sales proceed guarantees that process operating the way we'll our in evaluating mind we do been the closing – along set expect Nevertheless window we leasing forth expect to we signed. P&S to the our building. SEC. have we cost on important way extra with new extended year. this regulation no that there's capital before to all We expenses be with has aging do compared XX:XX and disclosed that It end the neutral that keep will we to and certainly from will with government XX:XX hear out building our compared remain since by in a details to options we line that drawn as regards we've the or

Matt Glover

Thanks, Dave. XX:XX

is company's the question some Next are of who competitors? key

Robert Eckel

XX:XX You you or ask, I So think answer that want did me to answer that Matt. I Dave? should

think our what we and base about fingerprint biometric companies for I and [Indiscernible] our [Indiscernible]. providers providers NEC like harder talked component clearly like then components that and offer our So software and

Matt Glover

What revenue in Thanks, of subscription and how that quarter was of was minimums? recognition XX:XX Bob. the annual the upfront much

David Barcelo

was We'll Bob those count spoke specifically, QX, also believe but transactions we minimum quarter transaction rather about We there the they XX:XX if to signing, But not dollars to Good you to occur. incur largely volumes, look contracts represents extend the transactions. the quarter in the and new increase of note we wins. point count as this that delta little with that have we time from do will regards revenue anytime. third the we increase continue committed hit to at At subscription asked the bit or And quarter. our question. I in over QX section. one his contractual million minimums a one the

our comparisons business So timing, lead this have of off good of revenue misleading revenue in the is measures. based transaction. kind which our shift per And of we continued the measure a transaction volumes of therefore, to are could accounting and

Matt Glover

Dave. Thanks, XX:XX

this a for for transaction on drove over next in you Knomi quarter, a clarification. the quarter quarter significantly basis prior slowing think to transactions? deceleration I Knomi what

David Barcelo

deceleration I'm me we dollars dollars, first no increase one, XX:XX really Matt, to our Well, We've that twenty the in Knomi roughly twenty quarter million a happy worth third ten but eclipse eight quarter a seen had nice little a the bit of quarter-over-quarter. actually clarify second quarter, so eight we've transactions transaction we and here the seeing report there we was let of and counts. nice rose dollars more increase million as been dollars steady million progress than million twelve to

Matt Glover

Great, thanks. XX:XX

would what is success question next as view you few Next years? the over

Robert Eckel

portfolio success to Well well as our total offering. and next years over launch in as continue onboard expand XX:XX expand SaaS is new customers, few the Knomi our platform

revenue. very and that So recurring creating we're increasing base steady a of

mentioned our So that's getting also, the getting license? versus that the XX:XX mean, shorter mentioned just up term periods for I perpetual or it's lumpy, but less recurring. and to to I stage sign Dave customers think longer I we're

Matt Glover

Thanks, Bob. XX:XX

rebounded this? You around mentioned from year. you last OEM any significantly revenue detail provide has Can additional

David Barcelo

Yeah, XX:XX Sure.

me… Let

Robert Eckel

take XX:XX that? Do you to want

David Barcelo

XX:XX Yeah, yeah. Bob. Thanks,

the of and can and publicly, I revenue fingerprint. revenue efforts stream don't were and revenues makes ten so seen we it agreements revenue and our exceeded with embed growth case significant we into So up our well and excess that hardware vendors that these this into scans ten live talk mean, said for our that partners impacts OEM we're OEM And significant their percent this about or cultivate while that expand direction our to for our rebound, reach our products, partnerships OEM a very when share criminal is I to in our Aware market. percent detail highlights what I by and or the in the often level this anytime software I leverage stream. of breakout which of here, the our pleased typically That we and ten civil those of kind growth software percent of mean area is our about

Matt Glover

at I'd to IR to if was Thanks, At please for over email Bob this AWRE@gatewayir.com. like this our closing turn remarks. it question XX:XX now question-and-answer concludes Dave. time, answered, session your where's

Robert Eckel

you downloaded, us everyone our to investors on on overall our support, to you And investor employees, about available do continued we you, our again presentation thank thank learn partners, Matt. our call Thank today's like for haven't XX:XX invite I'd for I'd forward to to already call. once also I you like website, our I to look strategy, updating so and the the our remind next on want more you joining and Matt? about if

Matt Glover

XX:XX Recording conference Investor company's today the earnings Thank for available twenty one you call via link website. section in of call. Thanks, Aware’s Relations third Bob. twenty today's replay for be for joining the of quarter

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Aware (AWRE) 26 Oct 212021 Q3 Earnings call transcript