Executive Summary

Q4 2024 revenue rose 10% year over year to $4.80M, driven by higher software license revenue including a $1.0M one-time license sale to a European government; GAAP net loss improved sharply to $(1.19)M and diluted EPS to $(0.06) versus $(0.20) a year ago, aided by the absence of a prior-year write-down .
Recurring revenue declined 10% year over year to $3.30M as timing of contract revenue recognition fluctuated; adjusted EBITDA loss improved to $(0.83)M on higher revenue and continued cost discipline .
New CEO Ajay Amlani framed 2025 as a “turning point” with a sharpened go-to-market, deeper partnerships, and tech advancement; management cautioned near-term revenue headwinds in 2025 while laying groundwork for sustainable growth beginning in 2026 .
Street estimates comparison unavailable due to S&P Global request limits; investors should focus on licensing volatility, recurring base trajectory, and execution under new leadership as near-term stock reaction catalysts .

What Went Well and What Went Wrong

What Went Well
- Revenue up 10% YoY to $4.80M on stronger licenses; adjusted EBITDA loss narrowed to $(0.83)M vs $(1.22)M last year, reflecting better topline and cost control .
- $1.0M European government license closed post-Q3, delivered in Q4; management expects multiphase potential and recurring contribution over time .
- New CEO emphasized three priorities—deepen strategic partnerships, advance tech innovation, and scale thoughtfully—positioning for long-term, sustainable growth .
What Went Wrong
- Recurring revenue fell 10% YoY to $3.30M in Q4 (from $3.68M) due to revenue timing; management flagged variability in non-recurring revenue quarter to quarter .
- Full-year revenue declined to $17.39M (from $18.24M) on weaker license sales; full-year recurring growth was 9%, below prior “double-digit” expectation communicated in Q3 .
- CFO noted severance/accelerated stock comp of ~$0.6M tied to CEO transition in December 2024, creating some FY cost friction; management also cautioned anticipated headwinds in 2025 as GTM is refined .

Financial Results

Metric	Q4 2023	Q3 2024	Q4 2024
Total Revenue ($USD Millions)	$4.374	$3.849	$4.797
Net Income ($USD Millions)	$(4.238)	$(1.167)	$(1.192)
Diluted EPS ($USD)	$(0.20)	$(0.06)	$(0.06)
Operating Income ($USD Millions)	$(4.482)	$(1.467)	$(1.474)
Total Operating Expenses ($USD Millions)	$8.856	$5.316	$6.271
Adjusted EBITDA ($USD Millions, non-GAAP)	$(1.218)	$(1.106)	$(0.829)
Cash, Cash Equivalents & Marketable Securities ($USD Millions)	$30.9	$27.4	$27.8

Segment and revenue mix

Revenue Breakdown ($USD Millions)	Q4 2023	Q3 2024	Q4 2024
Software Licenses	$0.502	$0.614	$1.351
Software Subscriptions	$1.492	$0.561	$1.292
Software Maintenance	$2.183	$2.257	$2.004
Services & Other	$0.197	$0.417	$0.150
Total Recurring Revenue	$3.675	$2.818	$3.296
Total Non-Recurring Revenue	$0.699	$1.031	$1.501
Total Revenue	$4.374	$3.849	$4.797

KPIs and operating metrics

KPI	Q4 2023	Q3 2024	Q4 2024
Recurring Revenue ($USD Millions)	$3.675	$2.818	$3.296
Adjusted EBITDA ($USD Millions)	$(1.218)	$(1.106)	$(0.829)
Operating Expenses ($USD Millions)	$8.856	$5.316	$6.271

Notes:

Q4 2024 revenue uplift included a $1.0M one-time license sale to a European government, underscoring license volatility as a driver of quarterly results .
Q4 2023 GAAP results were negatively impacted by a $2.7M write-down of a note receivable related to a 2022 investment (Omlis Limited), partially offset by a $0.8M contingent consideration fair value gain (FortressID) .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Recurring Revenue Growth (YoY)	FY 2024	“Double-digit” recurring and ARR growth expected (Q3 messaging)	Actual recurring revenue +9% YoY; recurring $12.0M FY (vs $11.0M)	Missed prior qualitative target
Near-term Revenue Outlook	FY 2025	None (no numeric ranges)	Anticipated revenue headwinds while refining GTM; groundwork for sustainable growth beginning 2026	Cautious narrative
Operating Expenses	FY 2024	Ongoing cost optimization; lower OpEx vs 2023 (Q3)	FY OpEx $22.934M vs $26.784M in 2023 (−14%)	Maintained, delivered
Cash Flow	Medium-term	Aim for sustainable positive cash flow in future (Q3)	Reiterated long-term focus; no specific timing in Q4	Maintained long-term target

Earnings Call Themes & Trends

Topic	Q2 2024 (Previous Mentions)	Q3 2024 (Previous Mentions)	Q4 2024 (Current Period)	Trend
AI/Fraud & Tech Roadmap	Emphasis on multi-modal biometrics; tech leadership and product-market fit; explore AWS Marketplace; gaming KYC demand	Launch AwareID WordPress plug-in; BioSP enhancements (offline enrollment); ABIS term contracts	CEO highlights AI-driven fraud; priorities: partnerships, tech innovation, scaling; commercialization acceleration	Building momentum; strategic focus sharpened
Government & Regional	Renewals/expansions in UK, Brazil, EMEA; $0.4M European license expansion	$1.0M European government booking; Momentum in Middle East/LatAm for access control	$1.0M Euro gov license recognized; U.S. federal remains key; monitoring “DOGE-related” changes	Government demand steady; watch budget dynamics
Revenue Mix & Recurring Base	Strong YoY revenue and recurring growth in H1; license expansion in Europe	Recurring +29% YoY; total revenue down YoY due to tough license comp; delays pushed into Q4/Early Q1	Licensing uplift (one-time); recurring −10% YoY; expect near-term variability as GTM refines	Mixed near term; rebuilding recurring trajectory
Cost Discipline	OpEx −8% YoY H1; operating loss −54% YoY in Q2	OpEx −6% YoY Q3; pipeline robust	FY OpEx −14%; Q4 includes ~$0.6M severance/stock comp for CEO transition	Continuing; leadership transition cost one-off
Partnerships & GTM	Partner ecosystem optimization; add/remove partners; targeted vertical use cases	Partner summit; expanding ecosystem; WordPress reach >40% of web	Deeper partnerships; targeted sales initiatives; optimized pricing; stronger customer success	Execution-oriented, scale via partners

Management Commentary

“2025 is a turning point for Aware—one of action and accountability… capitalize on the expanding market opportunity in biometric security by strengthening key partnerships, accelerating technology advancements, and executing with greater focus and discipline.” — Ajay Amlani, CEO .
“Total revenue increased by 10% to $4.8 million… driven by higher software license revenue, which includes the impact of a $1 million one-time license sale to a European government… Operating expenses were reduced to $6.3 million, down 29% from $8.9 million in Q4 of 2023.” — David Traverse, CFO .
“We will focus on three key priorities: First, deepening strategic partnerships… Second, advancing technological innovation… Third, scaling thoughtfully and sustainably.” — Ajay Amlani, CEO .
“Before I joined Aware, I purchased just under 1% of the company… about 205,000 shares… My personal investment reflects the confidence I have in our technology, team and opportunities ahead.” — Ajay Amlani, CEO .

Q&A Highlights

Sales efficiency and GTM refinement: prioritize high-value customers/sectors; optimize pricing; strengthen sales leadership and customer success to boost conversion and retention .
Government demand and policy context: U.S. federal remains key; monitoring potential “DOGE-related” procurement/budget shifts; biometrics can drive efficiency and cost savings for agencies .
Revenue mix and variability: Q4 revenue lift from $1.0M Euro license; license sales fluctuate with government buying cycles; near-term revenue challenges expected as GTM refines .
Recurring growth vs expectations: FY recurring +9% YoY, below prior “double-digit” target; focus on stronger, more consistent growth under new leadership .
Capital allocation/M&A: Primary focus on organic execution and GTM; evaluate M&A selectively where it accelerates roadmap/market reach and long-term value .
Leadership transition costs: Q4 included ~$0.6M severance/accelerated stock comp tied to December 2024 CEO change .

Estimates Context

S&P Global consensus for Q4 2024 EPS and revenue was unavailable due to request limits during retrieval; as a result, actuals could not be compared to Street estimates here [functions.GetEstimates error].

Investors should anchor on observed variances: licensing-driven revenue upside, recurring revenue timing variability, and improved adjusted EBITDA, while awaiting updated consensus and revisions post-report .

Key Takeaways for Investors

Licensing volatility remains a key swing factor; Q4 benefited from a $1.0M one-time government license—expect quarterly noise while recurring base is rebuilt under refined GTM .
Recurring revenue softness in Q4 (−10% YoY) merits monitoring; watch subscription momentum from AwareID WordPress plug-in and ABIS term deals to re-accelerate recurring trajectory .
Cost discipline is tangible (FY OpEx −14% YoY); improved adjusted EBITDA in Q4 suggests operational leverage potential as topline stabilizes .
Leadership transition is a catalyst: CEO insider purchase (~205k shares) signals alignment and confidence; focus areas—partnerships, tech innovation, sales execution .
Government budgets/procurement (including “DOGE-related” context) are a watch item; biometrics efficiency narrative may offset near-term constraints .
Near-term setup: management guides for 2025 headwinds while laying groundwork for growth in 2026; expect estimate revisions and investor focus on recurring growth milestones and pipeline conversion .
Positioning: narrative catalysts include WordPress distribution, BioSP enhancements, ABIS pipeline, and partner ecosystem breadth—these can support medium-term multiple expansion if recurring growth normalizes .

Appendix: Full-Year 2024 Highlights (from Q4 release)

FY 2024 revenue $17.39M (vs $18.24M); recurring revenue $11.97M vs $10.99M (+9%); net loss $(4.43)M vs $(7.31)M; adjusted EBITDA loss $(3.85)M vs $(4.55)M; cash & marketable securities $27.8M (vs $30.9M) .

AWARE INC /MA/ (AWRE)·Q4 2024 Earnings Summary