Aware reports revenue rise in 3Q
28 October 2020 16:35 GMT

Aware, a leading supplier of biometrics software products, solutions and services, today reported financial results for the third quarter and nine months ended September 30, 2020 .

Implemented a mobile fused face and voice biometric system via Knomi ® to support the authentication of more than 100,000 offenders in the state of Arkansas .

Affirmed Knomi's industry leadership by passing iBeta Presentation Attack Detection (PAD) testing levels 1 & 2 with perfect accuracy and tripling the number of Knomi customers.
Surpassed 10 million transactions protected by Knomi worldwide and released Knomi D version 2.7.3, an enhanced version of the on-device variant of Knomi.

Revenue for the third quarter of 2020 was $2.5 million , compared to $1.9 million in the second quarter of 2020 and $3.0 million in the same year-ago period. The 31% sequential increase in revenue was primarily due to higher software license revenue. The year-over-year decrease in revenue was primarily due to lower software license and services revenue associated with temporary delays caused by COVID-19.

Operating loss for the third quarter of 2020 was $2.5 million , compared to an operating loss of $3.7 million in the second quarter of 2020 and an operating loss of $1.2 million in the same year-ago period. The higher operating loss compared with the prior year period was primarily due to lower revenue and higher operating expenses, including investments in sales and engineering resources to drive growth in new product areas, higher personnel costs as well as expenses associated with COVID-19 remote working.

Net loss in the third quarter of 2020 was $1.8 million , or $(0.08) per diluted share, which compares to net loss of $3.1 million , or $(0.15) per diluted share, in the second quarter of 2020 and net loss of $0.2 million , or $(0.01) per diluted share, in the same year-ago period.

Cash and cash equivalents totaled $42.3 million as of September 30, 2020 , compared to $47.7 million as of December 31, 2019 .

Revenue for the nine months ended September 30, 2020 was $7.9 million , compared to revenue of $9.8 million in the same year-ago period. The decrease in revenue was primarily due to lower services revenue associated with temporary delays caused by COVID-19.

Operating loss for the nine months ended September 30, 2020 was $7.6 million , compared to operating loss of $2.4 million in the same year-ago period. The higher operating loss was primarily due to lower revenue and higher operating expenses, including investments in sales and engineering resources to drive growth in new product areas, higher personnel costs as well non-recurring expenses in the first half of 2020. During the first six months of 2020, the company incurred approximately $1.2 million of non-recurring expenses, including $0.8 million of recruiting fees and severance payments, and more than $0.2 million in COVID-19 related charges, including remote working costs and bad debt from disrupted businesses.

Net loss for the nine months ended September 30, 2020 was $6.0 million , or $(0.28) per diluted share, compared to a net loss of $0.9 million or $(0.04) per diluted share, in the same year-ago period.

Management Commentary

"During the third quarter of 2020, Aware made significant improvements in its best-in-class biometrics solutions, receiving major recognition from the industry's premier software testing agency iBeta," said Bob Eckel , Aware's Chief Executive Officer. "In parallel, we've also increased our focus on operational and growth initiatives, including expanding our marketing efforts and reallocating resources to align our go-to-market approach with trends in our target markets. Our early traction on these initiatives has quadrupled subscription revenue and tripled the number of Knomi subscription customers year-to-date, as well as enabled Knomi to facilitate more than 10 million trusted transactions worldwide. We're encouraged by our progress and look forward to realizing even greater ROI as we roll out our strategic roadmap in the coming quarters.

"The Aware name is recognized around the world as the biometric solutions provider of choice for the 'bluest of the blue chip' government agencies. While we continue to serve and provide the same customer configurability and intimacy that we've always provided to our Government partners, we are also increasing our emphasis on commercial subscription-based growth in the financial and retail sectors. With a fortified balance sheet and an industry-leading, comprehensive product portfolio, we are better positioned than we've ever been to accelerate growth while enabling customers around the world to own their identities."

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