Aware, Inc. AWRE reported a third quarter of 2024 loss per share of 6 cents against the year-ago period’s earnings of 5 cents.

AWRE’s Revenues in Detail

Aware registered revenues of $3.8 million in the third quarter, down 39.7% year over year.

Lower revenues from software licenses dampened the top line.

Recurring revenues for the third quarter of 2024 totaled $2.8 million, up 29.2% year over year.

Shares of this company declined nearly 19.3% in today’s pre-market trading.

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Aware’s Segment Details

Aware derives revenues from three segments — Software licenses, Software maintenance and Services and other.

For the quarter under review, Software licenses revenues were $1.2 million, down 73.2% from the year-ago quarter.

Software maintenance revenues during the third quarter were $2.3 million, up 19.5% year over year, while Services and other revenues totaled $0.4 million, up 312.9%.

AWRE’s Gross Margin

In the quarter under review, Aware’s gross profit decreased 40.1% to $3.6 million. The gross margin contracted 59 basis points to 92.9%.

Aware’s Operating Expenses Analysis

Selling and marketing expenses decreased 14.5% year over year to $1.9 million. Research and development expenses declined 17.3% year over year to $1.9 million, while general and administrative expenses fell 17.7% to $1.3 million.

AWRE’s Profitability

Operating loss totaled $1.5 million in the reported quarter against the year-ago period’s operating income of $0.7 million.

In the third quarter, Aware’s net loss was $1.2 million against the year-ago quarter’s net income of $1.1 million.

Adjusted EBITDA during the reported quarter was a loss of $1.1 million against the year-ago quarter’s profit of $0.4 million.

Aware’s Liquidity & Debt Management

Aware exited third-quarter 2024 with cash and cash equivalents of $11.2 million compared with $11.5 million at the second-quarter end.

Our Take

Aware recorded dismal third-quarter top-line and bottom-line results. Lower revenues from the Software licenses segment were also discouraging. During the reported quarter, the gross margin contracted, which did not bode well. The company continued to incur operating losses during the quarter, which is also disappointing.

On a positive note, an uptick in recurring revenues during the quarter was encouraging. Solid revenues from the Software maintenance and Services and other segments were also impressive.

In October, Aware secured a $1 million booking with a European government with planned delivery of licenses within the current year, a portion of which is expected to contribute to the company’s Annual Recurring Revenue. The same month, the company launched AwareID on the WordPress Marketplace, enabling businesses, website owners and eCommerce platforms across industries to easily implement cloud-based biometric and identity authentication. Aware has also introduced a new core version of its biometric orchestration and identity management system, BioSP. These raise our optimism.

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