Aware, Inc. (NASDAQ:AWRE) Q3 2023 Earnings Call Transcript

Additionally, our partner-focused selling motions have enabled us to reduce our selling costs while increasing new business conversion at an accelerated pace. In fact, during Q3, we had 4 new accounts go live and signed 2 new contracts with our partners for AwareID. Our strong third quarter performance reflects our continued efforts to increase ARR and drive sustainable future growth. Craig will walk you through our key customer wins and progress on our go-to-market initiatives in more detail. But I wanted to touch on a few more highlights first. After emphasizing the development of our customer success team over the past few quarters, we’re excited to finally have a formal partnership program in place. Aware has a strong commitment to partner success, and we look forward to directly collaborating with our partners to convert the growing market demand into more wallet share for us and our partners.

Our AwareABIS offering delivered as intended, and we believe the solution has found an excellent niche in the underserved market. We deployed AwareABIS to 3 law enforcement agencies, of which 1 is on-prem and 2 are cloud-based. Of The 3 deployments, 1 began producing recurring revenue in Q3, and the other 2 will begin producing recurring revenue in Q4. In conjunction with an enhanced partner ecosystem, we also optimized AwareID to make it even more versatile, secure and accessible by introducing facial identification capabilities and improving the back-end functionality. Now businesses of all size can easily incorporate our world-class biometric authentication without changing their back end. Furthermore, we added a developer hub platform, which encourages developers to experiment with AwareID’s capabilities to help build brand affinity amongst the engineering and developer communities.

Even though we are continuing to optimize AwareID’s market fit, it’s important to note that AwareID is opening doors across all our biometric solutions to high-quality opportunities with large and recognizable brand names. As I mentioned earlier, our technology is recognized as a top performer industry-wide and most recently, our pad algorithms were ranked number one in security for both impersonation and evasion for presentation attack Type 4A in the NIST fake benchmarking test. Aware has also recently been named an industry catalyst and role model in the 2023 Biometric Digital Identity Prism Report. While we can’t and don’t plan to announce every contract that we’ve secured or are working to secure, Aware is consistently winning business in competitive markets.

Our ability to anticipate market trends and adapt our award-winning solutions to specific customer needs continues to contribute to our market leadership. Now before moving on to our financial performance, I’d like to briefly address last week’s 8-K filing. As noted in the filing, Aware has streamlined its financial organization. Dave Barcelo is no longer with the Aware. As part of this realignment, we have promoted our Corporate Controller, David Traverse, to Principal Financial Officer. Dave Barcelo was with Aware for over 3 years, and we are very fortunate to have his leadership. We cannot thank him enough for his contributions and wish him all the best in his future endeavors. We have total confidence in David Traverse fulfilling the financial leadership role.

Some of you may recall David from a previous earnings call when he stood in for Dave Barcelo. David joined Aware 3 years ago as Vice President and Corporate Controller. He’s got an extensive background in finance and public accounting. Prior to joining Aware, David was Vice President and Corporate Controller at SeaChange International and Vice President, Finance and Chief Financial Officer at Airtel Video Systems. He has also worked as a certified public account in several public accounting firms. We may not track filed a 10-Q on time and do not anticipate this change to impact our filing cadence or Investor Relations activities. Lastly, we are committed to exiting this year with neutral operating cash flow and continue to optimize our cost structure, focus on maximizing our operating cash flow as we prepare and enter 2024.

I’ll now turn the call over to David to walk us through our financial results for third quarter 2023. David, over to you.