- Earnings call transcript Q3 2022

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Matt Glover

Good afternoon, and welcome to Aware's Third Quarter 2022 Conference Call.

Joining us today is the Company's CEO and President, Robert Eckel; CFO, Dave Barcelo; and CRO, Craig Herman.

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

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

applicable do it may revise from Although as information, as Aware time, securities undertakes statements by or forward-looking commitment voluntarily a or laws. so update events time of new except future to to result whether no otherwise, the required

contains or as not Additionally, for a by of Non-GAAP certain is defined Regulation measures a provided from SEC should financial financial Accordingly, presented measures compliance non-GAAP reconciliation isolation term as financial the in with the and GAAP. G. in Aware substitute has information considered the be call non-GAAP and via in most Investor this GAAP will company's Relations recorded of in the website. everyone for available today. directly release available to presentation measures the issued these measures earnings that I'd company's the be comparable a like to link replay made financial remind section the

and to Now over Eckel. Bob President, CEO the Bob? I'd Aware's turn like to call

Robert Eckel

further We're release you the today. September is our us press Matt. that Investor closed, thank results Thanks, us ended copy third for issued After our the section quarter of the A in join XX, of market and a Good afternoon, website. Relations release for everyone, first pleased we quarter. CFO, available joining for could XXXX. press the to announcing growth. X-month you I'll our On quarter third today's provide foundation update discuss details organizational solidifying and Barcelo, third operational the drive and on will Dave quarterly performance financial sustainable Afterwards, scale review Then our progress on this making for our the performance. our we're I will call, financial Aware. and

remarks, observations since joining that Craig strategic our will the share Following as discuss his new Herman, initiatives Dave's CRO, efforts. go-to-market Aware company's August as well are in his advancing initial

pilot million receive customers subsequent the delay. of outlook approved call sizable From months And building In million case, close we couple comparison $X.X seen a after recorded to to phases from extended in review year of as to first was quarter, of to $X.X quarter, of Bedford, the million their the to The our revenue, team, continually delay in our endeavor. of and for the Mass. delivered QX. the continue straightforward drivers million income gain $X.X line challenging open the income new has questions. Nevertheless, perspective, model $X in sales to $X.X our I'll are despite by to we our revenue a revenue adjusted Transitioning QX located increase or we July QX increased strategic the headwinds which ability business in a XXXX of recurring realignment sale and customers purchases in elect environment the a simple status X operate to last impacted loss. business million government before we by macroeconomic of one delivered encouraged we top $X.X our the EBITDA is third our and of $X.X million several by net a strong we've be saw to results net negative in significant very Finally, and benefited million year-to-date. we rarely

in strategy Craig SaaS of our further to execution. scale, Chief for revenue new to and go-to-market achieve growth. and August, role enterprise to appointed and we Herman that significant the early of sustainable accelerated recurring and optimize to our industry position sales base profitable and As many you we Officer are know, bolster experience leveraging Revenue in Craig Aware has

inorganic. us current As Having sheet evaluate of balance cycles, customer continue our that headquarters Craig recurring confident growth Part With we securities. team, a track strong new volatility income $XX AwareID, Bedford our optimize to ROI SaaS growth, initiatives, be whether these proven sales this cash our few partnerships we leader, high sales is opening those to allows fortunate model that portfolio are equivalents transformation. we corporate in of enables has to To and marketable revenue the and to other business strengthening opportunities and the support new our success. backed sale ample strong this or accelerate market of a and million Burlington, focus with building withstand year. are Craig cash offering, earlier from markets, in to success recurring a by balance the we existing organic support adoption record our expanding strong A in cash, ago, us building officially on our revenue sheet that of complete are organic opportunities and relocated Massachusetts. weeks can of accelerating

for a modern needs shareholders and facility satisfaction. current employee customers, maximize but is our that more smaller better business to allows us to be more increase value to Moving suited collaborative for

Las anticipated this operational that week earlier to out show MoneyXXXX, summary, unveiled financial platform we delighted SaaS close in I'm fintech and AwareID. our to Vegas, Lastly, share at my highly

has offering comprehensive and to to are it would who've team and and affordable the AwareID the tackle preconfigured cases it thrilled positioned authentication market, most the what to on Aware commend and originally a the deferring market, like we customers while is for in disruptive summarize, We've for their experience. working expand in our security platform. needs recognized authentication generation. AwareID price verification, at tirelessly manner achieve longer this all posture low-code and pipeline that most common user our have of resulted the the sizes, multifactor this business a to offering platform best-in-class environment than milestone. To Nevertheless, we so an of in anticipated. use increase enhancing From recurring a end-user a We purchases I helps been without we security experience. and we macroeconomic challenging bring organization single platform to can their to compliance fast developed of robust biometrics continue point, entire lightning identity improve sacrificing revenue see, accessibility onboarding the We continued

AwareID the cases, experience. many in enhances fact, In user

We've that We on and greater focused we headwinds, Despite led for is for even Craig revenue track map CRO, adoption. realigned around the team years industry customer growth SaaS macro road in strategy an the its Herman. success have on veteran, success high our updated expectations market our are ahead. confident by

Barcelo our to us before outlook, results and discussing business through to the call Now near-term for the financials third over and Dave, turn walk drivers quarter. over you. I'll our to Dave

Dave Barcelo

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

September second same results third quarter ended quarter was XXXX. and million both of for financial XXXX $X.X our revenue to year the ago $X period. the Turning to XX, compared for Total the million

the million million XX, total months September in period. $XX.X X ended year $XX.X For ago our same revenue compared the was to

and deferring solutions. our unfavorable macroeconomic to was decrease sequential of the the their that mentioned, customers in revenue Bob conditions led quarter result third of As year-over-year purchases primarily our

operating our expenses. Now at looking

operating which million reserve. Bedford expenses bad of onetime our gain a team as we marketing as debt the partially million relocation XXXX months to includes negative period. which loss same of to were an compared to million result third from related the largely $X.X the XXXX, $X.X for the with from negative prior sale from operating Bedford $X.X XXXX period. year compared our operating million Building of an ended September coupled to the increased million, in $XX.X the in Our loss year, the XX, million was in year was XXXX, $XX.X the and to gain revenue million in of spend revamped and third AwareID of $X.X general million the impact higher the additional sale negative sale months gain our of by an was for $X.X of prior the from $X.X $X.X period. income onetime Bedford compared X year and Operating Operating Building, of our the launched million $X.X X ended of costs XX, QX impact the administrative million the includes onetime sales million September ago last loss Operating $X.X expenses for of offset building decreased and the quarter which quarter of

share diluted share net to compared negative of in quarter the diluted For million GAAP million period. ago income or $X.XX the of loss net negative totaled same or per third year $X.XX per $X.X XXXX, $X.X GAAP

X share sale Building. months period. gain negative of $XX,XXX net for QX diluted XXXX in included GAAP a or compared year the mentioned, income $X.X September for GAAP net per negative the GAAP million to diluted income XXXX, per Bob related XX, million to Bedford share $X.XX $X.X $X.XX same our the totaled As ago net ended onetime loss of or a

loss release, loss million, period. the EBITDA Our in earnings totaled to ago of in for compares $X.X be EBITDA reconciled million net the which loss our to quarter, GAAP adjusted same adjusted will which $X year

to EBITDA the $X.X period. For million prior in million XX, EBITDA loss loss XXXX, ended totaled an adjusted the September $X compared of months X year adjusted

increase million the end the equivalents compared in million securities our of marketable cash from proceeds the securities offset cash, cash building in partially at used and quarter the to at prior the with $XX the Looking sale sheet, in and equivalents was cash of cash, marketable $XX activities. and operating quarter, balance end to by at due

$XXX,XXX of our XX,XXX repurchased of share quarter, during Additionally, the of we program. part a previously as stock at cost announced shares buyback

macro in be Bob asset. our to consider valuable As cash strong we mentioned environment, challenging a position this

take strive us the high cash the to capital and potential securities our allocate that with with also flexibility. position interest that maintain to maintaining align opportunities quarter, of with our flexibility higher to to advantage marketable shifted ROI provides product our road of plan map. growth financial judiciously cash We some to while rates, a long-term we During robust

strategic enable shareholder opportunities summary. continue and drive that financial as us value. completes an This to would scale We actively my to organization to maximize evaluate

like over I'd to to the enterprise Craig Now sales to discuss call Craig? our strategy. turn

Craig Herman

Thanks, here happy to with everyone. Dave. today's be on I'm Hello, you call.

at track with I hesitation and particular, how how when, Aware had the XX the customer brings drew ExactTarget, is strong Before to and years My an point outstanding because believe CRO a I there the from will biometrics point experience, prior was the provide inflection of the ago. for me I to space, what personal as record CRO, me Internet. focus can an recognizable information of sizable Aware. touch the familiar more in to execution, my the while similar It's and to hesitation. their marketing that, improve company people concept, not experience strategy benefit in mainstream, to which where technology leader. right could matter industry into less personalized of industry was growth much in specifically has had and excited if accounts at and became Aware areas and our a people's industry Once biometrics the inflection biometrics a want the my reference first to having comfortable make an they an the view, it's I impact. we and I with place on on become as still initial the can areas value opportunity innovating have matter saw jump I in focus

firsthand into the transition company's biometric I'm solidifies with In Aware added financial broader beginning growth week, the they excitement Aware's am Aware increased as work comes with and the has a around world their value platform work well joined biometric which to the that launch happening And of solutions outperform highly see what's since the of Aware, quickly sustainable and months I've my leading ability and with the just largest company. only SaaS-based technology. and to recognize deploy increased top-of-the-line Customers Some the the government institutions and to protect growth, the identity space. security company's X is once we extremely use entities users. AwareID, biometrics in the rates. customers this I industry in for positioned our confident

For example, so let Aware is in describe Latin why successful America. me to you

maximizing hacking transactions attacks fight onboarding to their component identity biometrics fraudulent thwart deepfakes, to the to of part emulators. success our center record threats, Our while applications The this pipeline CRO Aware's of building My Aware's financial institution a and by be region's key customer on revenue reject to subscription a as customers order to and initiatives. digital economy platform recurring a particular, region and to video our are impact significant also levels recurring focus X of barrage robust and are pressure Knomi continuing fraud the has strong novel using In as pipeline, detect which my of device will efforts base of led strategy model. of up efforts revenue over and is our referrals upcoming success in in achieve subscription-based the replays and transformation business thrives. track applications including focusing in higher months. with we around key a revenue under team's

First enhanced is technologies is helping users of a development a critical and drive to to there tremendous existing sooner; and adoption areas: services. customer X it we in dedicated critical adoption. ensure authentication expediting team the customer provide Aware's or relationships a the way, capitalize onboarding and making process way new authentication success, to on, and leading accelerate cultivating faster to technology success with further us drive that deploy market we're value-based Through customers the using is for customer on applying and expansion in their continued intentional one, revenue. those focus first-time two, adaptive

having frees the it sales items, up revenue. by a and customers on driving these team acquiring new new focused our focus of to X Additionally, on team bandwidth

evolve and program. Our is second to our initiative strengthen partner

current Our team. the to reach way almost resellers, on which a makes exclusively sales sense focuses the expand of integrated as program

with team who with Our integrated to will Aware's be their but to our to those offerings then add expand refined to and and this partners. technology us don't offering collectively will with resell who integrated integrate program with own work Not us partners continue are approach our with it partners resellers, reach. confused integrated

partner technology product. could a with of offering, partner technical streamline and us to integrated the therefore, For help of more into thus This connection integrated working Aware's rapidly, example customer reseller product, sales scale example, abroad. provider accessibility the their program an tech is their partner partner's of base. Aware An tech it sell integrated ERP their Intercede, directly and who expanded when ours the resells an has Aware's between increasing to and domestically be an they will

exceed scaling third on realigning meet initiative the is focused are we and our to revenue ultimately objectives. key organization the Finally, growth and

success. Aware several to share We have confident client the customer close sales expanded And efforts new drive its our optimizing better organization position refining will wallet We're Aware's in to very profitability. revenue the introducing more a customer contracts, our partner Ultimately, roles and marketing place, our top and grow we're initiative processes, refined throughout sales increase team us of broaden technology expanded drive by and upgrading team faster. and reenergizing success this sales success. I'm revenue and ability its and my With for help increasing dedicated are confident aimed I'm and about base. and at growth helping program line efforts.

additional Now Bob I'd for back business insights Bob? drivers. the into like to to turn call our

Robert Eckel

from base company to business revenue. platform book a with final a strong company month, the of our and Craig. recurring phase a transition model This we of Thanks, entered ship

are ramps to and thrilled key prospects while revenue and and line a revenue. portfolio. to we're of unveiled drive offerings accelerating are have we focused of on scale To existing top remain about areas. adoption optimistic on We up, recurring expanding couple our growth focused of our the said, That expand revenue, recurring AwareID AwareID

go-to-market our optimizing First, strategy.

so to afforded leveraging short impact a our been this opportunity by and optimization on a the in sustainable program. by capitalize Chief process. efforts need deep time noticeable within we highlighted, Aware's spearhead he's to his led Craig partner far. in customer a revenue to Revenue with Transitioning already base current organization has is was part and As expertise key Officer, the us made expanded revenue-generating Craig a tremendous an

macroeconomic From market. functional a close on model shift total discussed volatility, Matt, the are the start growth short-term From of ready appreciates in we teams Aware in and at expand we and accessibility the that confident as process forward XXXX questions. we've for and to we reflect success real made cultural perspective, call to for and phase as to addressable for requires current perspective, we Second, attention and we the to please shift so is your we continued biometrics look provide intentionally support, prior our leveraging of headwinds customer realigned we All easy transformation can and significant a is that, are to The we expanded team and consume, the ahead all, long-term and calls our and navigate our mindset. are many despite appropriate final company what function instructions. a With poised our technology in guidance. customers, from industry. technology our AwareID the people business beyond. that open increase our

Matt Glover

question you million referenced for QX, of difference? In a received you First million, cash the Dave. net you, in the press $X.X said is $X.X you In proceeds. why onetime gain release,

Dave Barcelo

Thanks, Matt.

As for fees, you commissions depreciated in we from proceeds. basis a of and books, $X.X we million million. our our about cash After $X.X we netted the cost on sold $X.X building know, filings, million carried roughly. But

we income So about gain the million statement. netted onetime on a $X.X of

Matt Glover

your ultimately for Thanks, Craig. Dave. what does here success look There's Aware? like a From question Craig. for perspective,

Craig Herman

think client industry form strong geographic Sure. a markets as biometrics areas. pipeline Success into take will new revenue, Aware, leader Thanks, for the Matt. robust on driving consistent with and I expansion recurring

on the With our to we well our we're way the strategy, success. changes enhanced this having and implementing we're with traction achieving are

Matt Glover

Bob, question some color The contract wins? Can any or you've pipeline. next provide Bob. or you pipeline Craig. is for healthy Thanks, mentioned a

Robert Eckel

Matt. Thanks, Yes.

us allow to think new added contracts announce most we've some language we mentioned, previously into our wins. to customer as customers' I of

to Customers customers to next to to take it a got and those the step. pipeline we've ago to a moving launch. now their on with XX signed does full are get mentioned, be, increasing seeing spend where but Craig want We're months getting robust are we As us. also while

long-standing of low customers right financial of functionality SaaS And to there's come it's their code. online with immigration has institutions. more as to with quickly us. out spend in doubled almost good the with AwareID One addition the seeing and our large box, the people the expect customers We're we traction

Matt Glover

What you at did feedback ? launching receive Bob. AwareID Thanks, sort after MoneyXXXX of

Robert Eckel

to want you this do one? Craig, . take

Craig Herman

of on advisers, of Bob. And in Thanks, the all unions, credit days as financial in multiple fintechs, well a the low-cost, both some X banks We talking specifically, spent as floor MoneyXXXX ecstatic. and banks AwareID, space. sizes, on the largest feedback banks Sure. for at world with authentication, the mid-market, online was services the fund the solution feedback easy-to-implement others

more of a is to number up the even coming that different with market, are responding. already product excited We is something this great in out on the this leads of and market follow really

Matt Glover

Thanks, Craig.

metric question. to or anticipate be there Is Next you're your indicate When do model milestone to a of the business the transformation? tracking transformation completion you complete? internally

Robert Eckel

but is as Yes, Matt, process, achieved transformation significant ongoing an milestones. you we've know,

this You things critical really success of and SaaS initiatives. our of CRO week's our were all expanded Craig recent customer AwareID that They're heard for business our ago, a model. launch Craig in hiring minute place put

flow our speak a time, reflects And to recurring So as as company's profitability. opposed increases, as would be it the to be able metric to that At percentage breakeven percentage transformation revenue. our revenue. we've best this is to quarterly as cash revenue track we'll grown total ARR of

Matt Glover

QX of Our the quarter. in level it get next to back revenue likely Thanks, fourth question. Bob the Is you

Robert Eckel

discussed, seeing we at Annually, Matt. target. as towards to that Directionally, headwinds QX we headwinds we described subside. we're XX% XXXX in be as better year anticipated, rate growth Thanks, the anticipate earlier previously be we begin work the than the won't but expect given full to we QX more some

Matt Glover

company's Next deploying What plans for are its question. the cash?

Dave Barcelo

take I'll that. Matt,

of as healthy filings, to question. in good a know, our marketable market the very right see liquid that that's this looking roughly into take about We've of attractive $XX rates you balance is bonds such. today. advantage fortunate cash very highly I sheet. or cash And treasuries, million back with our to and cash quarter, the got million AAA at be know the So in very we Aware, you'll now. interest put in a securities, $XX least reserves We're

you We'll inorganically. that things the got Q drive you can on If and We're see we does -- we're ROI overall, organization pipeline, out the patient cash and do. We've to But high how scale to large smart. and wait want filing. opportunities any as our can be maximize organically evaluate and balance act and in looking us check an and enables that, on value. AwareID shareholder more

review. time, with filings as and a initiatives of make we communicate capital at be into mix any pushed given SEC. allocation So And these in them, our the decisions there's they'll

Matt Glover

is question do to anticipate for revenue? next contributing Bob. you AwareID The line When top

Robert Eckel

anticipate as contribute AwareID That's -- a it, nominally to revenue. good question. We launch we to we QX

SaaS As you model. pure AwareID know, a is pay-as-you-go

So providing as contributor like bookings becomes to material top a more revenue, metrics additional our quarterly at we'll our updates. line SaaS look in backlogs and

Matt Glover

be Bob, breakeven the on still to operating core you a basis cash next end of are expecting by year?

Robert Eckel

Yes.

EBITDA profitability anticipate to crossing over to adjusted continue by end of XXXX. the We

Given the still but impact exact timing in unknown current near cost headwinds, comfortable not the macroeconomic OpEx anticipate we're at is do point, with the adding our and structure nevertheless, significant this future. the of current

Matt Glover

breakeven should or revenue investors about run annual? Dave, rate quarterly think how your

Dave Barcelo

we that that with -- will to that the most attainable to will trajectory, mark see that that seems cost with stable. our that that continue growth going $X.X quarterly relatively current can remain structure part about way Bob hit for think I has need talking remain was Yes, revenue about. forward. And breakeven we you the just think of recently and It million

as a cost bit will any to growth way breakeven. And top part, So revenue and line nominal SaaS later as our that top line contributes nominal. and a while target. of on. we're more platform I'll significantly But the adjust cash us the remain goods continue in of increase remains say that help otherwise, will achieve goods we'll And our that long AwareID, our checking way that cost

Matt Glover

decline year-over-year? for Can XX% you subscription revenue you. explain one Thanks, the in another Dave,

Dave Barcelo

bit around Subscription flat. be and tricky. our nature past, all This revenue, we've recognition time this a as very the of period. to we on-prem take based to revenue it due committed But is very, described in one the the is off attributes, other

So compared XXXX million flat at But revenue we of overall, X had the last million to XXXX. $X.X XXXX, QX about both and year. in we're in $X.X for $XXX,XXX months,

So the we difference customers is it of of a big that QX multiple was than that's that now. in booked existing renewed -- that from revenue XXXX, different is years, for amount significant

as revenues result, a recognize because annual time unusual So committed got of in and revenue this. skipped we good XXXX contracts -- typical XXXX. of instead XXXX in our We a locked the no sign renew these just the of typical revenue of XXXX. value renewal, at recognition news annual And been in we spike have then side, for from or time were recognized an saw practices those loss or they're to since any the skip that in and our was on of Otherwise, XXXX. then into renewals, the To customers, a which they increase X-year But causes there lump have be these basis. signing more spike. clear, in for

Matt Glover

Dave. Knomi transactions of in number were Thanks, the QX? What

Dave Barcelo

into before, our Knomi more mentioned the continued is indicator we've as because mix of contracts. platform we transition believe company's transaction user-based reflective a Matt, and of of revenue recurring Yes, the bit subscription-based adoption

So, our as revenue XX% recurring. we mentioned was upfront, of QX

Knomi to model. and transaction disclosed revenue an transition we past, the indicator in And there. a recurring of early our because indicator was numbers good there adoption very a So

over year Now committed It's about had XXX,XXX, we just renewing are they been at We year as this went recently that last XXX,XXX signed minimal. volumes. very heartening. customers or that seeing a customer transactions ended just are Knomi higher They it. current

next them million X year, transactions. And renewed so we for

almost Xx a So of them. increase

Matt Glover

Bob, Craig has ways noticeable organization? the a made in what on impact

Robert Eckel

work. the excited a it's to he's Matt. have the Yes, of been Craig's on quick We're that a In question, And I'll team. here, and couple few you gotten examples wins. months Craig quick give some to great right

close HR his engaging and working through closure, skills quickly demonstrating the expansion, challenging tech positions to ways. and the process to also improved a as with identified better any leadership I partners refining the the those leakage identifying initiatives personnel gaps outlined to to prevent and he's he's for sourcing demeanor, mean how and well tackling impact fill necessary gaps sales we the him with proactively personal the team of in for are just accountability. to we And stack providing lead So sales as training, inspiring his revenue. forward impacts enable the accelerate gaps sales in these tools and these on to look an He's success. couple seeing team the immediate the

earlier, As inputs MoneyXXXX, he we mentioned at is customers. out getting firsthand from our

Matt Glover

Thanks, Bob.

next how question, AwareID? many are trialing Our customers

Robert Eckel

this release mentioned, quarter. this that I to are more and about to As add there in the launch. previously beta prior a dozen customers customers week's We're program latest convert AwareID a were looking to expect those customers to

So out right, when we were there, closed one I we believe Craig?

Craig Herman

Yes.

Matt Glover

it. Got

this business. to correct? is $X.XX cash share plan is is? do Aware's of question, per is Aware market the price versus next net giving missing? for Our Why little stock your in to no operating has market think What credit what And $X.XX, you

Dave Barcelo

Yes. the investor I knew were thinking. Thanks, I one. wish exactly Certainly, as in management pool Matt. company a we team, what our well. tough market That's is feel the operating that

feeling cash talking have fundamentals that it start the right how Our much prove organization. to that a now? call, saying prove going ability will we balance, best the We've the that sales about the that transform of didn't And growth talking what we're now market right assets Aware the have can our mentioned books he's is And are grow. to quite to. Craig kind I we our cash talked the -- see the it, on strong. we'll And also potential is has I that very say in recognize just about. Bob to was the and

Matt Glover

Thanks, Dave.

to you problem? Revenue sell Next is the something? going where is What are declining? question,

Craig Herman

Sure. This is -- I'll take this. Yes.

people we've and going which that up, go are goes existing other solutions. transactions right? customers, expansion think looking companies We I got some for when with strong is to to demand which really up, seeing equate our indicators,

have We really robust a pipeline.

out. pushed things Some

have We and they cash unless need delays spend to to to -- they on in when are commit people something. almost wanting seen move

longer. So taking deals are

times, repeatable equate The takes so third of now the sales when of much reasons enterprise which a that lines longer. more right customers low-cost predominantly sell we piece decision one a of we SaaS, we're launched along get that enterprise to a it. can AwareID, longer the coming stream things There's cycle, to The is outside can those delays this clocked board. on of -- is longer RFPs, we solution and

us, our with multiple bullish on into into revenue we're QX different types QX products focus and very coming see for is customers next different So we'll year. what in and types of and streams of being

Matt Glover

Thanks, Craig.

Next over savings to next cost had question. there XX months Are should continue? the macro conditions be negative opportunities

Dave Barcelo

I've our The be our we team here, this, management Matt. and where got opportunities, be at looking investing money. should very a in disciplined we approach, take Yes. spending growth we should what

where invest now be flexible, with excessive, reserves very right have but that a a allow the not And we approach feel months, We the of our company. talked have that see to what nobody There's things see us. everything strong be growth we over do wise also to look pipeline. we nothing where ahead we in As the we and disciplined is We happen. basis but upset cost happened, cash we've us next good strong we'll see Should growth XX and the knows opportunities. don't. of We we'll will -- exactly that like about.

Matt Glover

Dave. Thanks,

the for any that is onetime Were charges one in will there or you. not Next repeat. quarter severance-related

Dave Barcelo

It's Yes, good good out here. call that's a to question.

our quarter, of worse because that a couple EBITDA unusual it You is was last were for markedly may than was there. there costs in noticed have and QX

change are unusual some and recruiting organization, type some the sales the severance that in we expenses the With had for business.

In Q that on their that you reserve. in may we addition, bad notice our is filing partnered a start-up We're increased company this environment, with our questionable. debt funding

prudent to of our so solid impact thought of make customer customers. base. overall, good, that more And paying reserves. could we our government customers most some And But it are

to be worse. expect don't that we any So

Matt Glover

Dave. Thanks,

transition currently SaaS? company? to customers that does the new of for And one Craig. product, profile Next is that revenue will how pay for change overall The you the do SaaS licenses anticipate that

Craig Herman

more about, is Sure. products, I going the to to little revenue talked a continue increase. in bit of Yes, move as as SaaS we focus a subscription to

think I the is, our needs. is focus the delivering customer that where solution

low a it's cloud little to either way. easy or implement, be cost to versus customization can with something something in go SaaS-based it's but if with that's platform, and So customization, the that needs we heavy on-premise

So continue will that and more a while need customer more the for solution they be towards and on us, also a providing revenue. subscription-based our to focus moving be

Matt Glover

question-and-answer session. Craig. answered, time, e-mail turn for this Thanks, awre@gatewayir.com. like the question our now over At please team remarks. IR If to Bob to concludes call wasn't at Aware's I'd this closing back the

Robert Eckel

call. joining partners employees, everyone thank their for Yes. Matt. to our today's want shareholders want and on I us continued support. thank for Thanks, to also I

call. a and about reminder, to As on you may website, Aware's you our look our the Matt? more strategy on forward our presentation and we next learn investor available progress updating on

Matt Glover

everyone for remind be today Aware's you call us that to the joining for Thank third Thank available in I'd website. company's Investors section you, via will a quarter replay call. like recording of Bob. the of for XXXX link conference today's

You now may disconnect.

Aware (AWRE) 30 Oct 222022 Q3 Earnings call transcript