AWRE - Earnings call transcript Q1 2022

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Operator

00:05 Good afternoon And welcome to Aware's First Quarter 2022 Conference Call.

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

Following their remarks, we'll open the call for questions. [Operator Instructions] 00:22 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. Listeners should please take note of the safe harbor paragraph that is included at the end of today's press release. major will risk be the statements in emphasizes management that making paragraph uncertainties inherent and forward-looking This today. from results XX:XX that Aware differ actual there you indicated materially to are factors such wishes that could to statements. those results caution by cause and Form outlined in uncertainties XX-Q. including SEC the and XX-K also on report annual Form are quarterly risks company's filings, These its reports on be statements should considered forward-looking of factors. in Any these light

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

financial CEO with provided Although that so measures Aware to Aware the it the XX:XX time undertakes by everyone a of future like from earnings comparable the available President, no via will by for directly Aware's measures be whether website. recorded presentation or required is measures release and securities Bob made section reconciliation link as has laws. Investor presented available Eckel. of revise Additionally, as information, measures result company's GAAP I'd isolation considered a Now, Accordingly, the most financial would and issued financial XX:XX that applicable to information remind the non-GAAP today. these this statements, voluntarily replay compliance GAAP. call in like to or the events Non-GAAP over financial may do in and in except I to Relations Bob? XX:XX company's the to or of turn new non-GAAP defined Regulation commitment should G. be substitute for from time, to forward-looking in otherwise, as update this call a certain SEC term contains

Robert Eckel

XX, we the of joining our A you copy March the in everyone and quarter our release market After XX:XX the press Investors of release announcing results Thanks, Matt. Relations press a available website. the thank ended us first is for XXXX. issued today. for afternoon, Good close, section

the will for the discuss call, how today strategic predictable you the paved for made term on on long our results. After during Dave the our focus business XX:XX to review pleased financial provide Barcelo our roadmap way are quarter Then of we've continued operational drivers progress, Aware. and our and XXXX has additional I'll level We progress details I who first today's growth and our outlook. CFO, high join quarter first on will overview

base questions. Lastly, solid XX:XX Aware a progress we transition financial the Our company. demonstrate quarter as subscription to base for recurring results we'll call platform the have first open continue made SaaS towards revenue we continued a into building

Anonybit’s XX% the over expanding Several revenue XX% reflects all a As full driven world. revenue to foundation about and increased increasing as anticipation sequentially year-over-year, addition of our call talked new are to allows aligns end ongoing. level platform of data over recurring combined, million, capabilities enable specifically technology QX integration year. revenue and in The encouraging, subscription XX% XX% the of and last data new by two of year-over-year network growth These the line mentioned X% is $X.X partnerships which revenue March, accelerate partnerships, in grew The to marking increase expansion other the existing seamlessly in since a top launch the and to into enhanced privacy Even Our partners highest the strategic with addresses on Fortress XXXX. create quarterly February quarters. more our subscription It ID, reach we identity parts priority in the for top which at in with December thwart In currently MIRACL. this the adding with expect to in market. we new in these for us When briefly anonymized storage three year. solution I strategic services data financial coming we in our distributed as integrated concerns. costs, first partners announced and XX:XX partnership breaches aimed a call and March, Anonybit, a geographies uses and the XX:XX customers without solutions ramping privacy. early data approach in with is we growth us to QX acquired into decentralized biometric of their on markets. our of the data development XX:XX well us who announced our Anonybit partners

of our allows customers' easily passwords, biometric secure, confident of beyond single will best-in-class authentication. protect to from Anonybit two partnership benefits enhanced use MIRACL flexibility users. to the the software Aware's enhances their cases, the individual partnership solution of deliver solutions more highly biometric XX:XX to In while us of factor visitor are across MFA and access functionality deployed ransomware. authentication, adding XX:XX range we be and anticipate attendance offering greater services customers will and We and customers utilize our risk biometrics combined to The including team announced cyber-security to cloud-based company increase Aware's We data and be and a the This allow management. and strategic biometric layers MIRACL’s our time remaining it. a protected with working onetime technology in authentication less March deliver specializes passwords, to multi-factor step our By best control, a management that authentication and platform our MIRACL, SaaS-based cloud value all security secured password needs to adaptive integrated the privacy with and data technology, breaches added to to closely bring authentication can customers biometric to requirements. that The number variety others. fit against we

are significantly they supports carefully layers complexity threats. adapts note that sign-on add and technologies is security of regulatory emerging consumer and cyber better compliance. easily combined and integrates growing orchestrated it It better the security The solution enhances these to or addition, identity important In solutions XX:XX single not to friction. SSL while with or are to

Dave, support biometric integrate issued base. boarding focus The financial product key the the Dave in speed structured experience. is the their in the biometrics. you. executing frictionless that products XX:XX strong revenue strategic to effectively, authentication are to to by we parent of our I'll company growth. customized strategy, adoption walk by through multi-factor state each applications a foundation them cost now Knomi’s mobile and into within convertible quickly in application incorporates a investment of Knomi end, build maintain recurring our Limited thereby and so the revenue our to of integrate To results such, market. growth. version a more made across million we market note discussing customers' market empowering X.X, base the Facilitating partnership a on accelerating growing long-term call multiple Now, desktop continuing able time framework developers We quarter, a process to progress build also advanced for applications and authentication and application and with reach, code art partner its MIRACL, lines, support biometric Knomi recurring Omlis capabilities accelerating deploy while each As a our password quarter. sell is XX:XX development XX:XX over over before base. MIRACL that XXXX, tremendous first transforming advanced environments the expanding can to single now the a Flutter to of the turn made for first with aspect for advanced of less authentication own Overall, Knomi for us still and $X.X company Developers setting web, as availability reseller arrangement, mutual continued to other's we and

David Barcelo

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

year-ago Turning $X financial to of million $X.X of an XXXX in XX, for to an million period. the of our in compared ended was XX% million, to compared the fourth first XXXX. the and results increase increase March $X.X X% quarter Revenue quarter same

in the revenue of XXXX diluted due to of primarily same Bob from first share of was primarily the mentioned, expenses increase GAAP in of The or to loss per period. the well $X.X from operating first as costs. million our an to The $X.X $X.XX million XX:XX share, quarter year-ago year-ago operating XX:XX GAAP quarter XXXX, the million X% quarter revenue. loss XXXX, million per the of result of increased revenues. for for operating corresponding net marketing sales $X.X of same Looking As net expenses, our in improvement was was totaled the a in or loss higher million, $X.X due revenue, as $X.XX an The QX was the in primarily first higher based For higher to compared million at loss maintenance year-over-year operating period. loss improvement higher-subscription diluted expenses in year. $XXX,XXX and $X year-over-year last operating increase $X.X

this end to quarter, sheet, quarter, the $XX adjusted loss Our GAAP $XX.X same an our release net loss $X.X Looking $X.X compared cash reconcile at year-ago to adjusted the our in EBITDA of period. XX:XX million, improvement of prior had EBITDA million the earnings is the at in end cash equivalents we quarter. million of loss in the at for and million from balance the we which totaled

period, cash to Aware opportunities. us and MIRACL allocate we million capital used position for a strategic $X.X enables For three month strong that million ROI operations. the in and strategic $X.X investment for maintains to our high

organization. strategic from XX:XX drive was disclosed growth growth also volumes, evaluate Knomi We continue opportunities there because Knomi an We early actively transaction continue to accounts. to indicator of our adoption. significant as and subscription scale Historically we see to an

revenue and XX:XX adoption users, the and a transactions of a of SaaS number summary. my completes off recurring subscription-based platform continued However, is off growth number of mix the continued revenue contracts the financial in believe with of of or indicator we Knomi based subscription company's reflective into our the more company. recurring based This transition a of of

the for call like Bob initiatives to back insights beyond. turn and Bob? I'd key for Now to our XXXX on additional

Robert Eckel

Thanks, XX:XX Dave.

our reflect recurring financial business SaaS results on platform three-year and transformation continued subscription consistent a a with we're into model realizing revenue. company, Our traction

to noted call ID quarter SaaS journey the last next month, phase platform. As our on Aware fourth I growth our our of is launch

new subscription laser our added partnerships are our led to continuing Asia into secure operational revenue. on recently focused sales expand and accelerate revenue, efforts. regard. partnerships partner recurring partners priority and markets traction South our key Adding particularly are A initiatives that and our will XX:XX in on reach is seeing revenue a globally. to of executing and we growing We We we're is that America driver recurring East, top new end Middle our the in expand great growth

additional revenue our establish with for contractors prime commercial government and additional expenses. several their to adding customers' anticipate able have the and fully leverage, to adoption of related to be once operational they partners and relationships Furthermore, without to Moreover higher our well offerings. allow as resellers resellers, platform announce initiatives partnerships quarters next customer are Aware's online enabling XX:XX insights build us and SaaS wins We over facilitate partnerships we product expand needs, launched. Our structuring around company. deep would these accomplishments partnerships customers coming future a into those integrated us

get on that platform. ID second with of ready year the working we in future partners Aware to are half to based As we prepare launch the offerings

a and We line market We market also globe. the of driving exceeds in revenue total remain sales across our our top share in XX:XX revenue North becoming that ID brand marketing commercial XX% emphasis CAGAR XXXX. in with are and expand to our growth on sales on recurring biometric America of cloud Aware and awareness offerings focused larger revenue ramping the

to end the both operating to committed achieving over the crossing XX:XX and increasing growth and of our the scale through means. strategy, inorganic executing leverage SaaS our at of indirect with We profitability partnerships remain We also this although resellers to exact platform. derive from we by adjusted in our timing unknown Additionally, is EBITDA XXXX, anticipate expect organically scalability point.

to expansion will continue emphasis an view offerings growth accelerate advance opportunities our We that product on roadmap. and/or and would strategic with SaaS our

quarter first progress, are prospects our strategy. ensure investments in XXXX summary, about with and acquisitions our we In and capital to any We will company's our or our judicious remain growth results given accordance bullish XX:XX are beyond. increasingly for operational strong with

company are for as Our to Aware continues to growth our and our for been Fortress for the for XX:XX industry. the confident what ability support MIRACL sustainable Anonybit. please of enhanced outperform us We excited to are and Aware SaaS our recurring we with questions. now ahead our grow the is instructions. in platform, growth new provide look to the up revenue we revenue which appreciate remain with Matt, forward with biometric All appropriate are upcoming broader highly capability steadily and has and positioned rates. the your With of subscription XX% a ID partnerships ready continued ID, at launch base industry and call strategic year-over-year, believe open we that, well

Matt Glover

Bob. Thank question First is for you, does integrated you, Bob. ramping XX:XX resellers? with respect mean Instructions] [Operator What to

David Barcelo

have think we Matt, I audio an with XX:XX problem Bob.

ahead resellers an agreement. me the go signed a it you. that about we we while And Difficulty] integrated ramping let and level. So typically talk partnership for in initial our initial minimum context This of we When is means answer [Technical

Matt Glover

XX:XX experiencing We're technical difficulties.

situated. can moment. hold We please you One the appreciate If it. we while get

Robert Eckel

Matt. Hey, now? Can you XX:XX hear me

Matt Glover

can. We XX:XX

Bob. Let , me ask the question again

Robert Eckel

XX:XX ahead. Yeah, go

Matt Glover

respect ramping to mean does what resellers? So with XX:XX integrated

Robert Eckel

when we QAed minimum while like initial where the collaborate this initial XX:XX we into is and Knomi them want our not we we biometric technology. and Okay. mobile full or publicize to at partners signed integrate Aware framework agreement to up full launch an prior product And the fully they and full after sure we was a most work typically relationship we product six the and integrated with this to this and this that months it's And Yeah, Aware ramping launch anywhere -- will our when done And XX offerings XX:XX that adaptive includes of have level to authentication anticipate that. from ID running a partnership we allow time. it's make talk platform. to launch, and about about

Matt Glover

elaborate of $X use approximately please on in cash Dave, the Thanks, XX:XX QX? in million would you Bob.

David Barcelo

Yeah. Thanks, XX:XX Matt.

quarter, but Sorry, also dropped I March of used $X.X approximately purposes, moment to first which the convertible pretty discussed, ago, million MIRACL, year balance, last then we with $X.X at a a as strategic were for which in made first is was we regards our $XX.X million. with got quarter. we in about cash consistent our And million XX note. And in operating investment as a the usage

Matt Glover

XX:XX other you would for Thanks. regarding update that sale, an Dave. please everyone transaction? the provide you, one X-K building And recently Aware an office with on filed

David Barcelo

XX:XX Absolutely.

we're has in process about this the now year a finish to line. been the coming So and

simultaneously. in date headquarters avoid that offices we amendment of closing on as -- with building XXXX. allows date closing the April we we for that to purchase date Burlington, we previously as terminate a the This is and our two a first June Difficulty]. parties we into filed point June an announced Mass, amendment, to purchase match we same sorry, XX. X-K of updated an So, both amendment we X, any filing, and discussed where In fifth XX, still recently There so disclosed amended that lease state added of if X-K an to original closing at new we prior entered agree. agreement into the agreement [Technical lease We possibility -- the of earlier advised of newly had amendment the and entered office can us this paying

new move the office We amendments X, QX. can the the building of filing. Copies in April X-K before into end that found of expect be to

Sophie Pearson

our seems audio XX:XX our Thanks, It Dave. here. continuing like issues

So with you I'm the out to for Matt. question going next deals getting this because seeing jump Are of in macro? pushed

Robert Eckel

slight a and Interesting biometrics the respect our and onboarding with customer macro question. geopolitical climate, activity credit levels rising we're environment, of the Obviously, impact to such inflation one as interest cases for seeing since rates applications. XX:XX the use on

a up, direct at in for rates it's kind And down go have slightly, this depending. the thing. So time. don't the we the demand it's -- that And of as area business key conflict a any of also, goes interest

Matt Glover

deal change any in seeing size? you Are Bob. Thanks, XX:XX

Robert Eckel

still, this they're medium on user said or the Deal I Not depends small, before, the same sizes about XX:XX fall of -- look as and our large into of category. the availability at clients. the all And the base time. all it readiness they and

Matt Glover

many the contribute been customers? offering. What When will customers push to XX:XX SaaS from update Great. on an back provide Can How trialing this? P&L? the are Thanks. the you this has

Robert Eckel

SaaS So really our or the on things is that to use it's a cases meant this properly our XX:XX addressing couple offering, to. offering that ensure of addressing

as date, or positive. live selective on to XX:XX second group in augmenting has to feedback we things there platform workforce user with our customers to we about these forward the go Typically the that timing of the in been we're it SaaS is use a to that for majority that have And to range have so in use. been have far financial quality assurance in trying launch and easy And year. bring the and going adapt particular, or offerings. ensure We to access, reviewing participate looking goes, the how robust in dozen is And providing us of a commented customers optimal the when we're process And prospective version enhance nothing new feedback. in the feedback. early industry, half of feedback to our reviews In provide market, like to a constructive as earlier helpful the really the really experience. our

So that's the be we're feedback ramping key kind we're half. in the activities up and closure second good a in And of all, XX:XX our about getting all we'll marketing excited and sales on. launch that area

Matt Glover

year? XX:XX Dave, investors Thanks, should Bob. think how OpEx this about ramping

David Barcelo

Nothing Overall, in significantly you flat. as exciting, expenses too quarters, XX:XX operating know. Matt. are previous our invested relatively We

a our planned of will as in However, we year. we of part this slight latter some uptick position see the fill

Matt Glover

you. question does is this the and XX:XX offering? one is Great. Bob, EI-DAS product Aware's Thanks. impact specific industry that What more for

Robert Eckel

authentication offering. certification EI-DAS based product Union it's compliance great little to the digital That's trust electronic within stands on and And signatures. other And European legal paper. is, for short time The aim say, signature, and on performed I the on enable a greater focus transactions on as it stamps this answer of is electronic for question. EU. by is a EI-DAS, for proof And and OneSpan regulation companies should creating standing say, advanced identification seals, us. would for electronic services. growth spur for Aware's and impact like XX:XX does really signatures electronic these DocuSign transactions standards have I for electronic mechanisms, to have EI-DAS XX:XX equivalent an electronic than a impact authentication there would

Matt Glover

expect the transactions Thanks, throughout these XX:XX we ramp of Knomi were should How the in to Bob. What QX? year? remainder

Robert Eckel

XX:XX of was Knomi because disclose to we're mentioned the continue What of of indicator transactions, adoption. we as in it based an mix Dave growth on transaction previously, now recurring is subscription contract early get volumes based users. number As area, finding we this on the

And recurring in subscription-based be transition, indicator into our platform. adoption we believe so as of Knomi continued revenue a SaaS will more reflective get the we that a of company's

So so going talked, depending as more combination it's indicator. on recurring more what's be consume, easier really we of becoming the and revenue to and a is to

Matt Glover

how color Bob. XXXX XX:XX so Thanks, Any on look QX, far?

Robert Eckel

the CAGAR rate quarter-to-quarter, on know, as a encourage on that be we than variations And XX:XX especially execution growth performance growth best prior everyone the a long-term the performance overall working calls, good term, and relative total execution growth believe strong for XX-month focus the predictable we our a of look and but strategy, measured we're solid QX put when period. at we rate as Well, annual focusing on and revenue. the to of all we actual the going you in talked growth foundation plan. value on results to really There's our overall, revenue plan. biometric our to to is have And reflects relative longer recurring greater

Matt Glover

seasonality? we should about How XX:XX think

David Barcelo

XX:XX Yes. I'll Speakers] take that, Matt. [Multiple

opportunity year. is around seasonality our some general, federal minimal. you in Do or have the fiscal So dependency

little there. get budgets are used So being we or might as and rolls around up, uptick September here a

Knomi In QX. dependency related in addition, significant season. seasonality the anticipate we got But the volume, they real overall, related some to don't forecast our to any have season holiday or spikes

Matt Glover

Dave. Thanks, XX:XX

impact of adoption What of the Flutter? for one Another you. the is

David Barcelo

just financials yet. our on Nothing XX:XX

Flutter capability we version. the and release currently off supporting customers, of are based more come the first leveraging We cut to our sales this first anticipate of -- they're

Matt Glover

just subscription is, revenues question and in recurring maintenance? Next included what is software Is XX:XX revenue? it

David Barcelo

yes. Basically, XX:XX

revenue of sales, license our our to in recurring sales. contrast our a is sales have subscription recurring maintenance software to Our one-time and both which cadence them

Matt Glover

Dave. Thanks, XX:XX

quarter of one you. minimums? much recognition Another this revenue annual How for in upfront subscription of was the

David Barcelo

let dissect Matt. Well, bit, XX:XX me little a one this

upfront So year a are third as our second come or to our clarify, annual to minimums contract. we necessarily of not

So our minimum. in customers existing of minimums onboard had new a also hundred are maintenance that revenue that quarter of this balance And from comes couple or so customers customers But then their they're monthly quarter. million annual recurring the contributed we to and renewal a the hitting subscription the of we of around $X.X couple hit revenues upfront stream. did essentially that overages of in thousand or

Matt Glover

What Dave. Thanks, recurring XX:XX revenue for was quarter? the

David Barcelo

it believe million over I was $X.X a QX. XX:XX for bit

Matt Glover

Great. any repurchases? used for cash XX:XX Was

David Barcelo

we the We No, but call, on yet XX:XX our plan are repurchases. repurchase QX. executed not time in announced last any on have not we

Matt Glover

When flow expect to do be you Okay. cash basis? breakeven an XX:XX on operating

Robert Eckel

XX:XX Yeah.

profitability by mentioned earlier, over adjusted but is EBITDA point, we plan. I of XXXX. The crossing still timing at exact that’s this As the end to the unknown anticipate

Matt Glover

Bob. plan XX:XX of team the in in Have senior management purchase bought stock the Thanks XXXX? employee any

Robert Eckel

a in [indiscernible] plan. XX:XX still plan I six-month the Well, that mean, is process, question. is it's

end beginning it. until disclosed. of -- it's over doesn't get It So it's

right in for still it's process So now XXXX.

Matt Glover

XX:XX session. Thanks, question-and-answer our concludes time, Bob. At this this

team e-mail to over wasn't Aware's I'd your If awre@gatewayir.com. question back closing answered, IR for turn to Bob call now please the like at remarks.

Robert Eckel

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

Matt Glover

joining you a company's link A replay Bob. recording Aware's today us quarter in first XX:XX Thanks, of section conference Thank for the for call. Relations today's call via XXXX website. of for earnings the available will Investor be

now disconnect. may You

Aware (AWRE) 27 Apr 222022 Q1 Earnings call transcript