Shares of Aware, Inc. AWRE have gained 2% since the company reported its earnings for the quarter ended Dec. 31, 2024. This compares to the S&P 500 Index’s 0.1% loss over the same time frame. Over the past month, the stock lost 3.2% compared with the S&P 500’s 5.1% decline. 

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Quarterly and Full-Year Financial Performance

Aware reported total revenues of $4.8 million in fourth-quarter 2024, reflecting a 9.7% increase from $4.4 million in fourth-quarter 2023. This growth was primarily driven by higher software license sales, including a one-time $1 million license sale to a European government. However, recurring revenues declined 10.3% year over year to $3.3 million, down from $3.7 million in the prior-year period.

Net loss for the quarter narrowed to $1.2 million, or $0.06 per diluted share, from $4.2 million net loss, or $0.20 per diluted share, in fourth-quarter 2023. The prior-year quarter had been impacted by a $2.7 million write-off related to an investment in Omlis Limited. Adjusted EBITDA loss narrowed to $0.8 million from $1.2 million in fourth-quarter 2023.

For the full year, total revenues declined 4.7% to $17.4 million from $18.2 million in 2023, as lower software license revenue offset an 8.9% increase in recurring revenues, which reached $11.9 million from $10.9 million in 2023. Net loss narrowed to $4.4 million in 2024 from $7.3 million in 2023, while adjusted EBITDA loss narrowed to $3.9 million from $4.6 million in 2023.

Other Key Business Metrics

Operating expenses saw a 29.2% reduction in fourth-quarter 2024, declining to $6.3 million from $8.9 million in fourth-quarter 2023. The full-year operating expenses also dropped 14.4% to $22.9 million from $26.8 million in 2023. AWRE ended the year with $27.8 million in cash, cash equivalents, and marketable securities, compared with $30.9 million at the end of 2023.

Management Commentary

Newly appointed CEO Ajay Amlani, who took over in December 2024, emphasized that 2025 marks a turning point for Aware, with a renewed focus on enhancing execution, refining the go-to-market strategy, and strengthening partnerships. He acknowledged macroeconomic headwinds and government budget constraints but expressed confidence in Aware’s biometric security offerings and the company's ability to unlock new revenue opportunities.

CFO David Traverse noted that while full-year revenue declined, recurring revenue remains a priority, providing a stable foundation for future growth. The company anticipates near-term revenue fluctuations as it transitions to a more efficient sales strategy.

Factors Influencing Financial Performance

The revenue increase in fourth-quarter 2024 was primarily driven by higher software license sales, including the one-time European government deal. However, the decline in full-year revenue resulted from lower non-recurring software license sales, which tend to fluctuate based on government procurement cycles.

The 8.9% growth in recurring revenues for 2024 indicates progress in stabilizing Aware’s revenue model, though fourth-quarter 2024 saw a temporary decline in this segment due to contract timing effects. AWRE’s significant cost reductions contributed to narrowing losses, reinforcing its commitment to operational efficiency.

Guidance and Outlook

While Aware did not provide explicit revenue or earnings guidance, management reiterated that 2025 will involve strategic adjustments to improve sales performance and expand partnerships. The company expects revenue variability in the near term but remains focused on driving sustainable long-term growth.

Other Developments

In 2024, Aware repurchased 137,051 shares for approximately $0.2 million. The company also appointed Ajay Amlani as CEO, signaling a shift in leadership to execute its refined strategy.

In December 2024, AWRE terminated its previous CEO, incurring $600,000 in severance and stock-based compensation expenses.

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