Aware Reports Second Quarter 2022 Financial Results; Continued Recurring Revenue Growth
Aware, Inc. (NASDAQ: AWRE) reported second quarter 2022 revenue of $4.2 million, down slightly from $4.3 million in Q2 2021 and $4.7 million in Q1 2022, primarily due to supply chain delays. Recurring revenue represented 56% of total revenue, marking an improvement over last year. The company posted a net loss of $1.3 million, consistent with previous quarters, while cash reserves stood at $25 million. Aware aims to enhance its subscription base and strengthen its market position through new partnerships in the financial sector.
- Recurring revenue improved to 56% of total revenue, up from over 50% year-over-year.
- Net cash position strengthened with an additional $8.6 million from property sale.
- Revenue for the six months ended June 30, 2022, increased to $8.9 million from $8.7 million year-over-year.
- Management expressed confidence in continued growth of recurring revenue and strategic partnerships.
- Second quarter revenue decreased to $4.2 million, a decline from $4.7 million in Q1 2022.
- Net loss remained steady at $1.3 million for the second quarter.
- Adjusted EBITDA loss increased to $0.8 million from $0.6 million in Q1 2022.
Company Continues to Execute on its Long-Term Growth Strategy and its Transition to a Subscription-Based Business Model
BEDFORD, Mass., July 26, 2022 (GLOBE NEWSWIRE) -- Aware, Inc. (NASDAQ: AWRE), a leading authentication company applying proven and trusted adaptive authentication to solve everyday business challenges with biometrics, today reported financial results for the second quarter ended June 30, 2022.
Second Quarter 2022 and Recent Operational Highlights
- Generated revenue of
$4.2 million , with continued focus on expanding the company’s recurring revenue base. - For the first half of FY 2022, recurring revenue as a percentage of total revenue was
56% , an improvement of over50% in the comparable period in FY 2021. - Strengthened balance sheet with
$8.6 million in net cash proceeds from completion of Bedford, MA building sale in the third quarter. - Increased the number of regional partnerships with value-added resellers and integrated product resellers to broaden the global reach of the Knomi® mobile biometric authentication platform.
- Showcased Aware’s advanced authentication solutions at Identity Week Europe 2022, ID4Africa 2022, and Celaes LATAM 2022, demonstrating the company’s deep, long-standing expertise in biometrics.
- Highlighted Aware’s recent momentum with financial institutions in Latin America and Europe, reflecting the successful deployment of its leading-edge, biometric-based authentication and onboarding solutions for mobile banking transactions.
Management Commentary
“We continue to execute on our long-term growth strategy despite the continued challenging macroeconomic environment, delivering
“We also strengthened our balance sheet recently from the sale of our office building in Bedford, MA for
Second Quarter 2022 Financial Results
Revenue for the second quarter of 2022 was
Net loss for the second quarter of 2022 totaled
Adjusted EBITDA loss (a non-GAAP metric reconciled below) for the second quarter of 2022 totaled
Cash and cash equivalents totaled
Six Month 2022 Financial Results
Revenue for the six months ended June 30, 2022 was
Net loss for the six months ended June 30, 2022 totaled
Adjusted EBITDA loss (a non-GAAP metric reconciled below) for the six months ended June 30, 2022 totaled
Webcast
Aware management will host a webcast today, July 26, 2022, at 5:00 p.m. Eastern time to discuss these results and provide an update on business conditions. A question-and-answer session will follow management’s prepared remarks.
Date: Tuesday, July 26, 2022
Time: 5:00 p.m. Eastern time (2:00 p.m. Pacific time)
Webcast: Register Here
The presentation will be made available for replay in the investor relations section of the Company’s website. The audio recording will be available for approximately 90 days following the live event.
About Aware
Aware is a global authentication company that validates and secures identities using proven and trusted adaptive biometrics. Aware’s software and software-as-a-service offerings address the growing challenges that government and commercial enterprises face in knowing, authenticating and securing individuals through frictionless and highly secure user experiences. Aware’s algorithms are based on the most diverse data sets in the world and can be tailored to the unique security and requirements of each customer. The company empowers users to have control over identities through clear, intuitive opt-in/opt-out features, helping them feel secure and improving their lives. Aware is a publicly held company (Nasdaq: AWRE) based in Bedford, Massachusetts. To learn more, visit 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, 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, 2021 and other reports and filings made with the Securities and Exchange Commission.
AWARE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(unaudited)
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||
| Revenue: | ||||||||||||||||
| Software licenses | $ | 2,018 | $ | 1,723 | $ | 4,646 | $ | 4,090 | ||||||||
| Software maintenance | 1,819 | 1,769 | 3,481 | 3,305 | ||||||||||||
| Services | 401 | 772 | 803 | 1,287 | ||||||||||||
| Total revenue | 4,238 | 4,264 | 8,930 | 8,682 | ||||||||||||
| Costs and expenses: | ||||||||||||||||
| Cost of services | 324 | 309 | 638 | 692 | ||||||||||||
| Research and development | 2,229 | 2,364 | 4,653 | 4,760 | ||||||||||||
| Selling and marketing | 1,412 | 1,500 | 3,193 | 3,152 | ||||||||||||
| General and administrative | 1,626 | 1,634 | 3,086 | 3,070 | ||||||||||||
| Total costs and expenses | 5,591 | 5,807 | 11,570 | 11,674 | ||||||||||||
| Operating loss | (1,353 | ) | (1,543 | ) | (2,640 | ) | (2,992 | ) | ||||||||
| Interest income | 64 | 1 | 73 | 2 | ||||||||||||
| Net loss | $ | (1,289 | ) | $ | (1,542 | ) | $ | (2,567 | ) | $ | (2,990 | ) | ||||
| Net loss per share – basic | $ | (0.06 | ) | $ | (0.07 | ) | $ | (0.12 | ) | $ | (0.14 | ) | ||||
| Net loss per share – diluted | $ | (0.06 | ) | $ | (0.07 | ) | $ | (0.12 | ) | $ | (0.14 | ) | ||||
| Weighted-average shares – basic | 21,655 | 21,497 | 21,649 | 21,495 | ||||||||||||
| Weighted-average shares – diluted | 21,655 | 21,497 | 21,649 | 21,495 | ||||||||||||
AWARE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(unaudited)
| June 30, 2022 | December 31, 2021 | ||||||
ASSETS | |||||||
| Cash and cash equivalents | $ | 24,984 | $ | 29,963 | |||
| Accounts and unbilled receivables, net | 7,625 | 6,850 | |||||
| Tax receivable | 1,411 | 1,411 | |||||
| Long-lived assets held for sale | 2,875 | - | |||||
| Property and equipment, net | 113 | 3,216 | |||||
| Goodwill and intangible assets, net | 6,134 | 6,342 | |||||
| Note receivable | 2,538 | - | |||||
| All other assets, net | 970 | 591 | |||||
| Total assets | $ | 46,650 | $ | 48,373 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
| Accounts payable and accrued expenses | $ | 2,345 | $ | 2,192 | |||
| Deferred revenue | 3,533 | 3,740 | |||||
| Contingent acquisition payments | 919 | 919 | |||||
| Total stockholders’ equity | 39,853 | 41,522 | |||||
| Total liabilities and stockholders’ equity | $ | 46,650 | $ | 48,373 | |||
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, as we believe adjusted EBITDA is an important measure. 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 the adjusted EBITDA adjustments are useful to investors because they allow investors 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 and six months ended June 30, 2022 and 2021 and for the three months ended March 31, 2022.
| | Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||
| Net loss | $ | (1,289 | ) | $ | (1,542 | ) | $ | (2,567 | ) | $ | (2,990 | ) | |||||||||
| Depreciation and Amortization | 221 | 172 | 446 | 349 | |||||||||||||||||
| Stock based compensation | 379 | 439 | 808 | 636 | |||||||||||||||||
| Interest Income | (64 | ) | (1 | ) | (73 | ) | (2 | ) | |||||||||||||
| Adjusted EBITDA | $ | (753 | ) | $ | (932 | ) | $ | (1,386 | ) | $ | (2,007 | ) | |||||||||
| Three Months Ended | ||||||||
| June 30, | March 31, | |||||||
| 2022 | 2022 | |||||||
| Net loss | $ | (1,289 | ) | $ | (1,279 | ) | ||
| Depreciation and Amortization | 221 | 225 | ||||||
| Stock based compensation | 379 | 429 | ||||||
| Interest Income | (64 | ) | (9 | ) | ||||
| Adjusted EBIDTA | $ | (753 | ) | $ | (634 | ) | ||
Aware is a registered trademark of Aware, Inc.
Flutter and the related logo are trademarks of Google LLC. Aware is not endorsed by or affiliated with Google LLC.
| 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 |
FAQ
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