Summary
Aware, Inc. reported first quarter 2025 financial results on April 30, 2025. Revenue for the quarter ended March 31, 2025 was $3.6 million, down 18.4% from the prior-year quarter. The operating loss widened 46.8% to $1.85 million. The net loss widened 62.7% to $1.6 million. Diluted earnings per share was -$0.08, down 60.0% from the prior-year quarter. Management said the year-over-year revenue decline was largely due to lower software licenses revenue. Recurring revenue was $2.7 million, compared to $3.1 million in the first quarter of 2024. Adjusted EBITDA loss was $1.5 million, compared to an adjusted EBITDA loss of $1.0 million in the same year-ago period. The company described the quarter as a transitional phase.
The cost picture deteriorated along with revenue. Operating margin was -51.3%, down 22.8 percentage points from the prior-year quarter. Operating cash flow was -$2.94 million, down 21.9%. Capital expenditures were $45,000. Deferred revenue was $4.54 million, down 16.5% from the prior-year quarter. Remaining performance obligations were $0.30 million, down 92.5%. That sharp drop in RPO points to a thin contracted backlog and adds uncertainty to future revenue recognition. The 10-Q attributes the revenue decline to fewer one-time license deals and the timing of subscription contract renewals. Software license sales have historically fluctuated, and management expects them to continue to fluctuate based on project timing with customers and partners.
Aware made several leadership changes during the quarter. Ajay Amlani was appointed chief executive officer and a board member on February 3, 2025. Brian Krause joined as chief revenue officer. Gary Evee was appointed chairman of the board. The board said it recognized the need for a major shift and chose leaders who could execute a disciplined commercialization strategy. Management's commentary covered the remainder of 2025 and the next few quarters rather than a specific next-quarter or full-year outlook. It expects engineering expenses may increase during the remainder of 2025 as the company ramps up product development. Selling and marketing expense should increase as it backfills the chief product officer role and hires more sales staff. General and administrative costs are expected to decrease for the next few quarters now that the CEO transition is complete. Interest income is expected to decrease slightly over the remainder of 2025 due to a lower projected average cash balance.
The main risks remain familiar for Aware. The company derives a significant portion of revenue from government customers, so changes in government contracting or fiscal policies can hurt results. A significant commercial market for biometrics may not develop, and competition from other biometrics providers is intense. Aware also depends on third-party channel partners and faces rapid technological change, cybersecurity threats, and the need to attract and retain key personnel. The 10-Q states that the company recorded a full valuation allowance against its net deferred tax assets as of March 31, 2025 and December 31, 2024. On liquidity, the 10-Q says the company believes its cash and cash equivalents will be sufficient to fund operations for at least the next twelve months from the filing date. The first quarter shows a business still searching for revenue traction while it invests behind a new leadership team and a commercial push.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q1 FY2025 | Q4 FY2024 | QoQ | Q1 FY2024 | YoY |
|---|---|---|---|---|---|
| Revenue | $3.6M | $4.8M | -24.8% | $4.4M | -18.4% |
| Gross profit | $3.4M | $4.5M | -25.0% | $4.1M | -18.9% |
| Gross margin | 93.2% | 93.4% | -0.2 pp | 93.8% | -0.6 pp |
| Research & development | $1.9M | $1.8M | +4.7% | $2.2M | -11.9% |
| Sales & marketing | $1.7M | $1.8M | -9.6% | $1.9M | -12.1% |
| General & administrative | $1.6M | $2.3M | -28.5% | $1.3M | +22.2% |
| Total operating expenses | $5.5M | $6.3M | -12.9% | $5.7M | -3.9% |
| Operating income (loss) | -$1.9M | -$1.5M | -25.6% | -$1.3M | -46.8% |
| Operating margin | -51.3% | -30.7% | -20.6 pp | -28.6% | -22.8 pp |
| Net income (loss) | -$1.6M | -$1.2M | -34.1% | -$982.0K | -62.7% |
| Net margin | -44.3% | -24.9% | -19.4 pp | -22.2% | -22.1 pp |
| Diluted EPS | -$0.08 | -$0.06 | -$0.02 | -$0.05 | -$0.03 |
Risks
Software license revenue decreased 39% from $2.1 million in the three months ended March 31, 2024 to $1.3 million in the three months ended March 31, 2025, driven by fewer one-time perpetual license deals and subscription renewal timing. Management expects software license revenue to continue to fluctuate based on the timing of projects with customers and partners.
Total revenue decreased 18.4% to $3.61 million in FY2025 Q1 from $4.42 million in FY2024 Q1, while remaining performance obligations fell 92.5% to $0.30 million from $4.00 million and deferred revenue declined 16.5% to $4.54 million, indicating weaker near-term backlog.
Operating loss widened to $1.85 million in FY2025 Q1 from $1.26 million in FY2024 Q1, and operating margin fell to -51.3% from -28.5%, as the revenue decline was only partly offset by $0.2 million of lower operating expenses from temporary cost reductions related to reduced headcount.
Robert Eckel resigned as CEO effective December 31, 2024, and Ajay Amlani was appointed CEO on February 3, 2025; G&A expense increased 22% to $1.6 million in the three months ended March 31, 2025, partly due to a $0.1 million signing bonus and $0.2 million of transition-related professional services. The chief revenue officer and chief product officer roles also saw departures in 2024.
Cash, cash equivalents and marketable securities were $24.8 million at March 31, 2025, a decrease of $3.0 million from December 31, 2024, primarily from $2.9 million of cash used in operating activities; operating cash flow was negative $2.94 million in FY2025 Q1 versus negative $2.41 million in FY2024 Q1, down 21.9%.
The company recorded a full valuation allowance against net deferred tax assets as of March 31, 2025 and December 31, 2024 after concluding it is more likely than not that it will not realize the benefits of those assets, which primarily consist of net operating loss carryforwards and research and development tax credits.
SaaS KPIs
All quarters →Adjusted EBITDA loss
Recurring Revenue
Summary, forecast, risks and KPIs are extracted from AWARE INC /MA/'s SEC filings for Q1 FY2025 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 2, 2026.