It’s the fastest biometric processing in the market as measured and celebrated by our customers. With generative AI spawning a higher rate of eve increasing sophistication in fraud and deepfakes, we will continue to innovate in our product roadmap to deliver technology that stays ahead of fraud trends and allows us to be thought leaders and biometric experts to our customers. We are transforming authID into a sales led organization of deep subject matter experts who will continue to help us continue our trajectory to build a high growth business with a robust pipeline, strong bookings and predictable revenue. Our sales leaders, along with the pipeline group, our lead generation team, are working side by side to identify new prospects, nurture sales deals and build quarterly pipeline of $9 million in sales opportunities.
Further, with an expansion of prospects and use cases in our pipeline, we iterate our target of $9 million in bARR for 2024, a tripled growth target over 2023. Building on our strong momentum of 2023 book sales, we are focusing efforts on driving revenue. Our expanded customer success team has implemented a robust process to take new customers live as quickly as possible, to speed up time to revenue and ensure minimum contractual commitments are met, and absolutely to explore new use cases to drive additional service usage. For existing authID customers, this team is focused on delivering outstanding value to ensure we win renewals, maximize opportunities to expand our relationships and minimize churn. I’m extremely pleased with the momentum we built over the last six months of 2023.
The hard work we did in 2023 places us on a path to deliver innovative product roadmap, an expanded sales pipeline as well as increased bookings and revenue in 2024. Preserving the best of what authID had we added the industry’s deepest domain expertise in identity to truly create a best of breed team for finance, engineering, sales and contract execution. I want to take a moment to thank our investors for their continued support in authID, and to extend my deep appreciation to the entire authID team for all their hard work and dedication. Together, we have repositioned the company for even greater success. We would now like to open up for questions. Let’s turn back to Graham who will moderate.
A – Graham Arad: [Operator Instructions] While we’re waiting for questions to come in from attendees, Rhon, perhaps you could expand a little bit more on where you see our place in the market compared to our competitors?
Rhon Daguro: There’s a lot of biometric technology using companies that are out there but what they do is they play in specific steps in the digital onboarding journey. The difference for authID and the way we look at our competitors is we’re actually a full complete end-to-end solution. We go all the way from onboarding to the repeated authentication of logging in over and over again, all the way to the part where they actually lost their account or somebody is trying to do a self service password reset on their account, which we call recovery. These are the areas that some players only do one, maybe they need two, but they don’t — they very seldom do all of them, and there’s very few that do it very well. And again, the whole user experience is what we do and make sure that, that entire journey and that entire user experience is the best possible.
That’s why we keep emphasizing speed and the 700 milliseconds. So that’s really the main differentiator between us and the competitive landscape today and it’s really a bright future for us.
Graham Arad: We do have a question now, and this is from [Ricky Solomon].
Unidentified Analyst: So a lot of the information is backward looking last year and so I just — we’re already almost three months into this quarter. Can you talk about some of the sales momentum we’re seeing coming this year, the types of customers that we’re talking to and maybe how the new sales members are adding to the pipeline or their strengths in verticals that they particularly have experience and customers maybe already — that they’ve been talking to? So anything you can add to that.
Rhon Daguro: I have to be a little careful because I can’t name customers because of the space that we’re in with security, but we are — the new folks that have been added to the organization have been contributing to building pipeline. So that’s where we’re able to try to build at a rate of $9 million in pipeline per quarter. So that’s where all that contribution is going towards. We have — we’re super busy with POCs and we actually set up this thing called a deepfake workshop. So as Tom talked about earlier, when we speak to our CISOs and CTOs, just speak to anybody in general, there isn’t a university or a course on how to fight deepfakes. So everybody is figuring this out now and they’re trying to figure it out like immediately and there just isn’t expertise.
Luckily for us, we’ve had that expertise for a while and we basically created a workshop to be able to educate CISOs and CTOs. So that’s really been the bulk of our kind of dominant of our conversations and the meetings that we’re setting up, and we’re setting up meetings with great companies, large and small. We’re not saying no to anybody. And we’re really going to market hard with showing how we can protect these companies against deepfakes and adversarial AI.
Unidentified Analyst: So both the [FAST] 100 and — like the [FAT] 100 and [FAST] 100, we’re making progress with both. And do you expect to close at least a couple of [FAT] 100s this year? Maybe not everyone on the call might know what the term [FAT] 100 means, so maybe you can talk about that.
Rhon Daguro: So we didn’t talk about that. So thank you for bringing that up. We have a strategic set of accounts that are of a smaller size and then we have another set of strategic accounts that are of larger size. And so the larger size accounts, obviously, will take longer. We’ve shared in the past that they can take anywhere between nine to 12 months to close and then some of the other ones are a little faster where it can take anywhere between three to six. We are attacking both, absolutely are attacking everything but we are absolutely attacking in both buckets. And some of them are taking the exact time said, which is nine to 12 months and some of them are moving faster. For example, for all the deals that we booked in 2023, those deals weren’t supposed to book.
They were supposed to follow the three to six month cycle and actually carry us out to June of 2024 this year in order to hit our $3 million in bookings. So sometimes they move fast, sometimes they move slow. Obviously, we’re going to stick around and service those customers, but we’re absolutely going after both types.
Graham Arad: We’ve had a couple of questions relating to how bARR gets converted into revenue. Perhaps I can forward this to — shoot this one to Ed. So one question is, how long does that process take? And talking about the $3 million of bARR that we have, what is the progress with converting that into revenue?
Ed Sellitto: So when we sign — I’ll speak to it in terms of the journey of a deal that flows through our P&L — to our P&L and touch on some of the things we talked about earlier. But once we sign a deal, the contractual commitment for that deal over the term of the contract will be — what goes into what we’ve been talking about is our remaining performance obligation. That will then turn into revenue and the timing for that to convert into revenue will be approximately — well, it will take about three to four months for us — for the customer to go live. And at that point, we’ve started to deliver the service that can be used by the customer and we will see the remaining performance obligation, the contractual commitments, start to prorate for the balance of the first contract year and then so forth for the second and third year.
So the short answer would be around three to four months is what we’ve seen on average is to get customers live and that’s sort of what we are seeing with the customers we’ve signed to date. So therefore, we have not started as of the end of 2023 to recognize the RPO from those deals. However, we are very — we’ve progressed very far with many of those deals even by the end of December ’23 and we expect to see one third approximately of the RPO be recognized during 2024 and that should start to see that happening early in the year.
Graham Arad: Tom, we have some technology questions. So I could ask you one, talking about the speed of our systems and how fast they are, halfway claiming to be faster in the market. How does this compare to our competition, what is the sort of range of processing speed for biometrics that is seen in the marketplace?
Tom Szoke: I mean, we’re seeing typically for biometrics, about 10 times slower on average. So up to 7 to 10 seconds between the user experience. So we look at 10 times from the — probably the fastest group and it can exceed 15 to 20 seconds in some competitors depending on the amount of friction they put in to determine all the…
Rhon Daguro: But the most important thing here, though, is consistency. So we’ll see somebody go 5 seconds or 7 seconds, but then they can’t sustain 5 to 7 seconds in performance, where we can sustain the 700 milliseconds every single time.
Graham Arad: Yes, that does seem to be significant. We have another question from the audience, from Dean [Cadaques].
Unidentified Analyst: Congratulations again on great performance in 2023. Have any of the bARR clients go on live so far?
Ed Sellitto: So yes, as I mentioned a little bit earlier, as of the end of 2023, which we’re reporting with our results today, we have not had any of those customers go live, although, we have seen a lot of progress and we do expect to start seeing those go-lives early this year. We can’t comment on the status of revenue projected into Q1 at this point, but we have made a lot of progress on that. Though, to your question, as of the end of December of 2023, we have not gone live with those customers at that point.
Graham Arad: Tom, going back to the technology. Can you talk a little bit more about the use cases that we’re seeing in the marketplace, where the demand is, what are the needs, frankly, of the market, in terms of the use cases that we have to offer?
Tom Szoke: I think as Rhon iterated, the use cases are reflecting the need to onboard people and ensure they know who the customer is at that point. But what is really exciting and what is in demand is to be able to reaffirm the identity of that person every time they return to the applications they access or the systems they go into. The ability to do that and with the assurance that they know who’s behind the device, it’s not an assumed identity, it’s a known identity and it’s tied back to that onboarded — onboarding process is where we see the use cases coming from.
Graham Arad: And we’ve, in the past, thought about consumer as opposed to workforce, and obviously, one of our biggest customers is workforce, some of the other customers are consumer. Are we seeing any greater emphasis one way or the other towards each of those markets?
Tom Szoke: I think you see both today, I mean a lot of the breaches that occurred. And we saw in the news recently are workforce related privileged users. Clearly, we talked about it in the presentation, our target because once you get access to their credentials, you’re in a system and you can do a lot of damage. And on the other side, we see a big interest in the financial services, fintech area, where, as we mentioned, different wallet applications, the movement of funds and sensitive — and access to sensitive systems is critical on the consumer level as well.
Graham Arad: [Operator Instructions] Whilst we’re waiting for other questions, Tom, could you — you did talk about — you have talked about our technology and how we are the most accurate and consistent. But in the face of all of the new types of attacks, how can we be sure — how do we assure our customers that we really have that 99% accuracy and 99% ability to detect those types of frauds?
Tom Szoke: As I described, our technology goes through layers. Each layer represents a certain level of security. When you combine those, you look at all the attack vectors and you try to limit them from each perspective. When you put that together in a single flow, you achieve that level of assurance. We’ve seen this, we benchmarked it with different tests internationally and within like national organizations and looked at different benchmarks on accuracy of our algorithms. We have the ISO certification for our presentation attack detection, we’ve achieved Level 2 with zero spoofs. So those are the kind of things we use to ensure our clients that we have that level of security. I believe, Graham, Ricky has a question.
Graham Arad: Ricky, go ahead.
Unidentified Analyst: So I know we’ve made a lot of progress hiring engineers. So engineering, clearly, a focus of the company. Can you talk about how you’re feeling about the product development, the engineering, how quickly that’s turning in and what your plans are going forward in terms of maybe adding to that department or what we need to do?
Tom Szoke: So I mean clearly, Rhon talked about how many major and minor release and eight major, six minor sub-releases were made just in the period in 2023. We’re continuing on that path. We released a build, a new version every 30 days is our sprint cycle. We are expanding the capabilities of our platform. We’re continually improving the user experience. I know we have the best but you got to maintain the best. And we’re always adding new innovation to make it easier and quicker for our consumers to use and customers to use our products. Secondly, we’re always looking at improving the way we can deliver information as far as dashboards and those kind of things, reporting is critical. So we’re expanding the team in many different areas that cover these things.
And as we need the growth, we add the engineering capacity. We have added, as we mentioned, new heads to the organization to bring that expertise and ability to deliver those functions and features during this year. You still got your hand up, Ricky, do you still have a question?
Unidentified Analyst: No, I lowered it. Thanks.
Graham Arad: We have one more question. When we’re competing with other biometric vendors, can you — Rhon, perhaps you can talk about what are the decision criteria that customers use when they’re comparing solutions? What is their focus, is it performance, accuracy, ease of use, what do you feel are the key criteria that we win on?
Rhon Daguro: Well, typically, our competitors or typically, our customers already have a baseline solution in there. And typically, they are looking for ways to either one, improve on two areas. Either, one, improve on the user experience or improve on the performance, meaning improving on the accuracy. And so precision and identity, they go hand in hand — extreme precision in that regard. And so our competitors where they have been not performing is one on the precision side of the house as well as the user experience. So those are definitely the two biggest factors. There’s, of course, cost and there’s another thing called like ease of implementation, meaning, will it take their developer six months to integrate it, can they integrate it in a single afternoon, what’s really great about the authID solution is that we’re all API based, so we can actually integrate with the customer if they wanted to in a single afternoon and give them ability and full capability to be using our products in a sandbox.
So definitely, some of the things like, for example, when ABM did their press release, they talked about; one, our expertise and how we architected the entire solution; two, our speed; three, our user experience; and then lastly, when they won the award, it was the entirety of the whole passwordless authentication solution.
Graham Arad: Yes, that was very significant and very heartwarming frankly, to get that kind of approbation from our customer and from their peers that gave the CISOs, that gave us the award at that time. Well, that seems to be all the questions that we have right now. Of course, investors are able to reach out and ask us any further questions by contacting us at Investor Relations at authid.ai. Rhon, perhaps you’d like to conclude and wrap up the call?
Rhon Daguro: Yes. Thank you, Graham. So thank you, everyone, for your questions and absolutely thank you for your time today. I want to thank our investors’ efforts to pivot authID to be a high growth company that it can be. I assure you that we continue to be maniacally focused on our mission to help today’s digital enterprises know who’s behind every device. Have a great day. Thank you, everyone.
Graham Arad: Thank you, everyone. That ends the call.
