Aware Reports Fourth Quarter and Full Year 2021 Financial Results
Aware, Inc. (NASDAQ: AWRE) reported a 49% increase in revenue for 2021, reaching $16.9 million. Recurring revenue exceeded $9 million, driven by a tripling of subscription revenue. The company protected 42 million transactions via Knomi™, marking a 345% growth year-over-year. Despite a net loss of $5.8 million for the year, adjusted EBITDA improved to a loss of $3.8 million. Aware acquired Fortress Identity to enhance digital ID verification. Management aims to accelerate growth in 2022, targeting increases above the biometrics market’s 15% CAGR.
- Revenue for 2021 increased by 49% to $16.9 million.
- Recurring revenue exceeded $9 million, with subscription revenue tripling.
- Knomi™ protected 42 million transactions, a 345% year-over-year increase.
- Acquisition of Fortress Identity to enhance product offerings.
- Net loss for the year totaled $5.8 million, improving from $7.6 million the previous year.
- Fourth quarter revenue decreased to $4.0 million from $4.2 million in Q3 2021.
Full Year 2021 Revenue Increased
Full Year 2021 Recurring Revenue Exceeded
BEDFORD, Mass., March 01, 2022 (GLOBE NEWSWIRE) -- Aware, Inc. (NASDAQ: AWRE), a leading supplier of biometrics software products, solutions and services, today reported financial results for the fourth quarter and fiscal year ended December 31, 2021.
Full Year & Fourth Quarter 2021 Operational Highlights
- Full year 2021 revenue increased
49% over full year 2020 revenue. - Recorded an all-time high of 42 million transactions protected by Knomi™ in 2021, a
345% year-over-year increase. - Tripled subscription revenue year-over-year, driving a
46% year-over-year increase in recurring revenue, demonstrating and confirming the company’s growth strategy. - Acquired Fortress Identity, a cloud-native pioneering provider of digital ID verification and biometric authentication, expanding the company’s offerings around identity proofing to directly address financial compliance requirements and enable organizations to mitigate risk and curtail increasing fraud.
- Selected by leading Turkish bank Garanti BBVA to incorporate Aware’s award-winning Knomi into the bank’s mobile app, enabling secure, remote customer onboarding and document verification capabilities.
- Announced that Thomas County, GA sheriff’s office installed AwareABIS, accelerating the agency’s criminal identification process.
- Showcased leading biometric and identity authentication solutions at Mobile World Congress Los Angeles and Connect:ID Conference, demonstrating Aware’s leadership within the biometrics industry and increasing the company’s brand awareness.
Fourth Quarter 2021 Financial Results
Revenue for the fourth quarter of 2021 was
Net loss in the fourth quarter of 2021 totaled
Adjusted EBITDA loss (a non-GAAP metric reconciled below) for the fourth quarter of 2021 was
Cash and cash equivalents totaled
Full Year 2021 Financial Results
Revenue for the full year ended December 31, 2021 was
Net loss for the full year ended December 31, 2021 totaled
Adjusted EBITDA loss for the full year ended December 31, 2021 was
Management Commentary
“Our results for 2021 reflect the early success of our growth strategy and transformation into a subscription-based SaaS platform company,” said Robert Eckel, Aware’s Chief Executive Officer. “Financially, we achieved several milestones in 2021, including delivering the highest revenue in more than five years and generating robust growth in recurring revenue. Operationally, we expanded our sales pipeline by adding new partnerships across multiple industry verticals and geographies. And, our recent acquisition of Fortress Identity further accelerates the development and market adoption of our SaaS solutions.
“In 2022, our focus remains on executing our growth strategy as we advance our SaaS offerings and continue to evaluate strategic initiatives. We have the industry expertise and leading-edge authentication solutions to capitalize on the growing adoption of biometrics. We believe our strong operational momentum has us well-positioned to continue growing our topline revenue at a rate exceeding the biometric market CAGR of about
About Aware
Aware, a global leader in productized biometrics software products, solutions, and services, provides critical biometric functionality to collect, manage, process, and match biometric images and data for identification and authentication. With their decades-long experience, Aware is a market leader in liveness detection and multi-modal fusion to protect client and business processes through fingerprint, face, iris, and voice matching algorithms, mobile biometric capture and authentication software, a biometric workflow and middleware platform, and a fully scalable ABIS. Aware’s device-agnostic, integration-ready, and customer-managed products enable ease-of-use for enterprises to empower individuals to own their identities. Aware serves customers across a multitude of industries, including financial services, enterprise security, healthcare, human resources, citizen ID, border management, law enforcement, defense, and intelligence. Aware is a publicly held company (Nasdaq: AWRE) based in Bedford, Massachusetts. To learn more, visit https://www.aware.com or follow Aware on Twitter @AwareBiometrics.
Safe Harbor Warning
Portions of this release contain forward-looking statements regarding future events and are subject to risks and uncertainties, such as estimates or projections of future revenue, earnings and non-recurring charges, the impact of acquisitions and the growth of the biometrics markets. Aware wishes to caution you that there are factors that could cause actual results to differ materially from the results indicated by such statements.
Risk factors related to our business include, but are not limited to: i) our operating results may fluctuate significantly and are difficult to predict; ii) we derive a significant portion of our revenue from government customers, and our business may be adversely affected by changes in the contracting or fiscal policies of those governmental entities; iii) a significant commercial market for biometrics technology may not develop, and if it does, we may not be successful in that market; iv) we derive a significant portion of our revenue from third party channel partners; v) the biometrics market may not experience significant growth or our products may not achieve broad acceptance; vi) we face intense competition from other biometrics solution providers; vii) our business is subject to rapid technological change; viii) our software products may have errors, defects or bugs which could harm our business; ix) our business may be adversely affected by our use of open source software; x) we rely on third party software to develop and provide our solutions and significant defects in third party software could harm our business; xi) part of our future business is dependent on market demand for, and acceptance of, the cloud-based model for the use of software: xii) our operational systems and networks and products may be subject to an increasing risk of continually evolving cybersecurity or other technological risks which could result in the disclosure of company or customer confidential information, damage to our reputation, additional costs, regulatory penalties and financial losses; xiii) our intellectual property is subject to limited protection; xiv) we may be sued by third parties for alleged infringement of their proprietary rights; xv) we must attract and retain key personnel; xvii) our business may be affected by government regulations and adverse economic conditions; xviii) we may make acquisitions that could adversely affect our results, xix) we may have additional tax liabilities; and xx) we believe the effects caused by the COVID-19 pandemic will likely have an adverse impact on our revenue over the next several quarters.
We refer you to the documents Aware files from time to time with the Securities and Exchange Commission, specifically the section titled Risk Factors in our annual report on Form 10-K for the fiscal year ended December 31, 2020 and other reports and filings made with the Securities and Exchange Commission.
| Company Contact Gina Rodrigues Aware, Inc. 781-276-4000 grodrigues@aware.com | Investor Contact Matt Glover and Sophie Pearson Gateway Group, Inc. 949-574-3860 AWRE@gatewayir.com |
AWARE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(unaudited)
| Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| Revenue: | ||||||||||||||||
| Software licenses | $ | 1,686 | $ | 1,862 | $ | 7,973 | $ | 5,038 | ||||||||
| Software maintenance | 1,848 | 1,319 | 6,679 | 5,429 | ||||||||||||
| Services and other | 462 | 245 | 2,202 | 842 | ||||||||||||
| Total revenue | 3,996 | 3,426 | 16,854 | 11,309 | ||||||||||||
| Costs and expenses: | ||||||||||||||||
| Cost of services | 276 | 327 | 1,209 | 810 | ||||||||||||
| Research and development | 2,192 | 2,066 | 9,259 | 9,093 | ||||||||||||
| Selling and marketing | 1,540 | 1,640 | 6,324 | 5,411 | ||||||||||||
| General and administrative | 1,512 | 1,249 | 6,159 | 5,419 | ||||||||||||
| Total costs and expenses | 5,520 | 5,282 | 22,951 | 20,733 | ||||||||||||
| Operating loss | (1,524 | ) | (1,856 | ) | (6,097 | ) | (9,424 | ) | ||||||||
| Interest income | 1 | 2 | 4 | 176 | ||||||||||||
| Loss before benefit from income taxes | (1,523 | ) | (1,854 | ) | (6,093 | ) | (9,248 | ) | ||||||||
| Benefit from income taxes | (269 | ) | (218 | ) | (269 | ) | (1,634 | ) | ||||||||
| Net loss | ($ | 1,254 | ) | ($ | 1,636 | ) | ($ | 5,824 | ) | ($ | 7,614 | ) | ||||
| Net loss per share – basic | ($ | 0.06 | ) | ($ | 0.08 | ) | ($ | 0.27 | ) | ($ | 0.35 | ) | ||||
| Net loss per share – diluted | ($ | 0.06 | ) | ($ | 0.08 | ) | ($ | 0.27 | ) | ($ | 0.35 | ) | ||||
| Weighted-average shares – basic | 21,578 | 21,424 | 21,525 | 21,473 | ||||||||||||
| Weighted-average shares – diluted | 21,578 | 21,424 | 21,525 | 21,473 | ||||||||||||
AWARE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(unaudited)
| December 31, 2021 | December 31, 2020 | |||||
ASSETS | ||||||
| Cash and cash equivalents | $ | 29,963 | $ | 38,565 | ||
| Accounts and unbilled receivables, net | 6,850 | 4,514 | ||||
| Tax receivable | 1,411 | - | ||||
| Property and equipment, net | 3,216 | 3,701 | ||||
| Goodwill and intangible assets, net | 6,342 | 2,868 | ||||
| Long-term tax receivable | - | 1,398 | ||||
| Other assets, net | 591 | 582 | ||||
| Total assets | $ | 48,373 | $ | 51,628 | ||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||
| Accounts payable and accrued expenses | $ | 2,192 | $ | 2,025 | ||
| Deferred revenue | 3,740 | 3,933 | ||||
| Contingent acquisition payment | 919 | - | ||||
| Total stockholders’ equity | 41,522 | 45,670 | ||||
| Total liabilities and stockholders’ equity | $ | 48,373 | $ | 51,628 | ||
Non-GAAP Measures
We define adjusted EBITDA as U.S. GAAP net loss plus depreciation of fixed assets and amortization of intangible assets, stock-based compensation expenses, other (expense) income, net, and income tax provision. We discuss adjusted EBITDA in our quarterly earnings releases and certain other communications. We use adjusted EBITDA in internal forecasts and models when establishing internal operating budgets, supplementing the financial results and forecasts reported to our Board of Directors, and evaluating short-term and long-term operating trends in our operations. We believe that the adjusted EBITDA financial measure assists in providing an enhanced understanding of our underlying operational measures to manage the business, to evaluate performance compared to prior periods and the marketplace, and to establish operational goals. We believe that adjusted EBITDA is useful to investors as a tool to evaluate the effectiveness of the methodology and information used by management in our financial and operational decision-making.
Adjusted EBITDA is a non-GAAP financial measure and should not be considered in isolation or as a substitute for financial information provided in accordance with U.S. GAAP. This non-GAAP financial measure may not be computed in the same manner as similarly titled measures used by other companies. We expect to continue to incur expenses similar to the financial adjustments described above in arriving at adjusted EBITDA and investors should not infer from our presentation of this non-GAAP financial measure that these costs are unusual, infrequent or non-recurring. The following table includes the reconciliations of our U.S. GAAP net loss the most directly comparable U.S. GAAP financial measure, to our adjusted EBITDA for the three months and full year ended December 31, 2021 and 2020 and three months ended September 30,2021.
AWARE, INC.
RECONCILIATON OF ADJUSTED EBITDA TO NET LOSS
(In thousands)
(unaudited)
| Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||
| Net loss | $ | (1,254 | ) | $ | (1,636 | ) | $ | (5,824 | ) | $ | (7,614 | ) | |||||||||
| Depreciation and Amortization | 168 | 160 | 688 | 561 | |||||||||||||||||
| Stock based compensation | 490 | 281 | 1,567 | 838 | |||||||||||||||||
| Interest Income | (1 | ) | (2 | ) | (4 | ) | (176 | ) | |||||||||||||
| Benefit from income taxes | (269 | ) | (218 | ) | (269 | ) | (1,634 | ) | |||||||||||||
| Adjusted EBITDA | $ | (866 | ) | $ | (1,415 | ) | $ | (3,842 | ) | $ | (8,025 | ) | |||||||||
| Three Months Ended | ||||||||
| December 31, | September 30, | |||||||
| 2021 | 2021 | |||||||
| Net loss | $ | (1,254 | ) | $ | (1,579 | ) | ||
| Depreciation and Amortization | 168 | 171 | ||||||
| Stock based compensation | 490 | 441 | ||||||
| Interest Income | (1 | ) | (1 | ) | ||||
| Benefit for income taxes | (269 | ) | - | |||||
| Adjusted EBIDTA | $ | (866 | ) | $ | (968 | ) | ||
Aware is a registered trademark of Aware, Inc.
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