Aware optimistic despite Q3 revenue drop
Aware has reported a significant decrease in biometrics software and services revenue in its third quarterly earnings report.
The company discloses a 44 percent quarter over quarter revenue drop from $5.4 million to $3 million, and an operating loss of $1.2 million comparing to an operating income of $1.1 million in the third quarter of 2018, attributing the loss to lower biometrics software license sales counterbalanced by higher sales of imaging licenses.
The total net loss in the third quarter was $0.2 million, respectively $0.01 per diluted share, as compared to the third quarter in 2018 when the net income reported was $1.3 million, respectively $0.06 per diluted share.
The reported revenue for the January – September 2019 timeframe was $9.8 million, a 19 percent drop from $12.1 million in 2018.
Aware explains lower biometrics software license sales were mostly driven by “a software license agreement […] with a large commercial customer in the third quarter of 2018, whereas we had no such license sale in the third quarter of 2019” and “to a lesser extent lower revenue from the software license agreement we entered into with a systems integrator in the second quarter of 2018.”
“Our revenue results for the third quarter were below expectations,” said Robert Eckel, Aware’s chief executive officer and president. “Our quarterly revenue and earnings fluctuate based on the timing of the delivery of licenses and services for projects. They are also impacted by our business model shift to more subscription arrangements that are based on multiyear enterprise, per user or per transaction-based contracts that are more backend weighted as opposed to upfront license deals.”
“Our expenses were higher due to our continued investments in productized solutions and business development with respect to enhancing customer centric product offerings addressing the growing needs for mobile biometric solutions in multiple markets,” Eckel added. “We are optimistic about the prospects for our business, as we are engaged with a number of quality companies and organizations who are looking to enhance and advance their business practices with Aware biometric solutions.”