Aware Inc (AWRE) 2023 Q3 法說會逐字稿

Good afternoon, and welcome to Aware's third-quarter 2023 conference call. Following management's remarks, we will open the call for questions. (Event Instructions)

下午好，歡迎參加 Aware 2023 年第三季電話會議。在管理層發表講話後，我們將開始提問。 （活動須知）

Before we begin today's call, I would like to remind everyone that the presentation today contains forward-looking statements that are based on the current expectations of Aware's management and involve inherent risks and uncertainties that could cause actual results to differ materially from those described.

在我們開始今天的電話會議之前，我想提醒大家，今天的簡報包含基於 Aware 管理層當前預期的前瞻性陳述，涉及固有風險和不確定性，可能導致實際結果與描述的結果有重大差異。

Listeners should please take note of the Safe Harbor paragraph that is included at the end of today's press release. This paragraph emphasizes the major uncertainties and risks inherent in forward-looking statements that management will be making today. Aware wishes to caution you that there are several factors that could cause actual results to differ materially from those results indicated by such statements. These risks and uncertainties are also outlined in the company's SEC filings, including its annual report on Form 10-K and quarterly reports on Form 10-Q.

聽眾應注意今天新聞稿末尾包含的安全港段落。本段強調了管理階層今天將做出的前瞻性陳述所固有的主要不確定性和風險。 Aware 希望提醒您，有幾個因素可能導致實際結果與此類聲明所顯示的結果有重大差異。該公司向 SEC 提交的文件中也概述了這些風險和不確定性，包括 10-K 表中的年度報告和 10-Q 表中的季度報告。

Any forward-looking statements should be considered in light of these factors. You are cautioned not to place undue reliance upon any forward-looking statements, which speak only as of the date made. Although it may voluntarily do so from time to time, Aware undertakes no commitment to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable securities laws.

任何前瞻性陳述都應根據這些因素予以考慮。請您注意不要過度依賴任何前瞻性陳述，這些陳述僅代表截至發布之日的情況。儘管 Aware 可能會不時自願這樣做，但它不承諾更新或修改前瞻性陳述，無論是由於新資訊、未來事件或其他原因，除非適用的證券法要求。

Additionally, this call contains certain non-GAAP financial measures that are defined by the SEC and Regulation G. Non-GAAP financial measures should be considered in isolation from or substitute for information presented in compliance with GAAP. Accordingly, Aware has provided reconciliation of these non-GAAP financial measures to the most directly comparable GAAP measures in the company's earnings release issued today.

此外，本次電話會議還包含由 SEC 和 G 條例定義的某些非 GAAP 財務指標。非 GAAP 財務指標應獨立於或替代根據 GAAP 提供的資訊來考慮。因此，Aware 在今天發布的公司收益報告中提供了這些非 GAAP 財務指標與最直接可比較的 GAAP 指標的調整表。

I would like to remind everyone that this presentation will be recorded and made available for replay via a link available in the Investor Relations section of the company's website.

我想提醒大家，本簡報將被錄製並可透過公司網站投資者關係部分中的連結重播。

Now I'd like to turn the call over to our CEO and President, Bob Eckel. Bob?

現在我想將電話轉給我們的執行長兼總裁 Bob Eckel。鮑伯？

Thanks, Matt. Good afternoon, everyone, and thank you for joining us today. I'm excited to talk to you about our exciting things that have been going on at Aware. After the market close, we announced our results for third quarter ended September 30, 2023. The copy of the press release is available on the Investor Relations sections of our website.

謝謝，馬特。大家下午好，感謝您今天加入我們。我很高興能與您談論我們在 Aware 發生的令人興奮的事情。收盤後，我們公佈了截至 2023 年 9 月 30 日的第三季業績。新聞稿副本可在我們網站的投資者關係部分取得。

Before reviewing our financial and operational highlights from the third quarter, I want to give you a quick overview of Aware and what makes us different. That way, those of you who are new to us have a better understanding of Aware.

在回顧我們第三季的財務和營運亮點之前，我想向您快速概述 Aware 以及我們的與眾不同之處。這樣，那些剛接觸我們的人就能更了解 Aware。

Aware is a global biometric platform company that uses data science, machine learning, and artificial intelligence to tackle everyday business and identity challenges through biometrics. We're working to enhance trust in an increasingly connected world through our mission of balancing security and user experience through our technology. Our offerings facilitate digital onboarding, authentication, and lifecycle management of the user's biometric identity through proven, responsible, and trusted multimodal adaptive biometrics.

Aware 是一家全球生物辨識平台公司，利用資料科學、機器學習和人工智慧，透過生物辨識技術應對日常業務和身分挑戰。我們致力於透過我們的技術平衡安全性和使用者體驗，從而增強人們對日益互聯的世界的信任。我們的產品透過經過驗證、負責任且值得信賴的多模式自適應生物辨識技術，促進使用者生物辨識身分的數位登入、身分驗證和生命週期管理。

Over the last 30 years, Aware has proven the value of our offerings by continuing to be chosen by governments and commercial organizations alike for our experience and our hardened portfolio. Our reputation in the biometric industry has earned us trusted spots with core government agencies in the United States, Canada, the UK, Germany, Australia, and more. In fact, we are a worldwide leader in biometric data orchestration for immigration and border management. We're also trusted by industry leaders like the largest banks in Brazil and Turkey, among others, for onboarding and authentication.

在過去的 30 年裡，Aware 憑藉我們的經驗和成熟的產品組合不斷被政府和商業組織選擇，證明了我們產品的價值。我們在生物辨識產業的聲譽為我們贏得了美國、加拿大、英國、德國、澳洲等國家核心政府機構的信任。事實上，我們是移民和邊境管理生物辨識資料編排的全球領導者。我們在入職和身份驗證方面也受到巴西和土耳其最大的銀行等行業領導者的信任。

Further, we have championed the responsible use of technology, specifically leveraging artificial intelligence and machine learning to create software that ethically achieves demographic neutrality and equity. Meaning, we have purposely emphasized the need for treating all individuals equitably.

此外，我們倡導負責任地使用技術，特別是利用人工智慧和機器學習來創建在道德上實現人口中立和公平的軟體。意思是，我們特意強調了公平對待所有個人的必要性。

During research, design, development, testing, and refinement, we train our algorithms and some of the largest and most diverse datasets in the world. This has given us the number-one position in minimizing practically eliminating bias based on age, gender, or race as independently tested and confirmed by NIST. Also, we believe in consent-based biometric technology, meaning outside of specific forensic applications and law enforcement in defense and intelligence, only people who consent to leverage biometrics are users of our technology. Additionally, our agnostic approach allows customers the flexibility they need to build on past investments rather than rip-and-replace, a common industry practice that promotes waste.

在研究、設計、開發、測試和改進過程中，我們訓練我們的演算法和世界上一些最大、最多樣化的資料集。經 NIST 獨立測試和確認，這使我們在最大限度地減少實際消除基於年齡、性別或種族的偏見方面處於第一地位。此外，我們相信基於同意的生物辨識技術，這意味著除了國防和情報領域的特定法醫應用和執法之外，只有同意利用生物辨識技術的人才是我們技術的使用者。此外，我們的不可知論方法使客戶能夠在過去的投資基礎上靈活地進行構建，而不是進行廢棄和更換，這是一種導致浪費的常見行業做法。

Third, we've earned our trusted status through a portfolio that mitigates threats and asserts the integrity of identity in a future-proof way. Since Aware doesn't outsource any biometric technology, we are the only biometric provider our customers need to work with. And if a new attack vector emerges, we were able to work directly to address it without needing to wait on a third party to upgrade their algorithms first or get recertified.

第三，我們透過一個能夠減輕威脅並以面向未來的方式維護身分完整性的產品組合贏得了值得信賴的地位。由於 Aware 不外包任何生物辨識技術，因此我們是客戶需要合作的唯一生物辨識供應商。如果出現新的攻擊媒介，我們能夠直接解決它，而無需等待第三方首先升級其演算法或重新認證。

Further, we set the bar for liveness in the industry. In a recent independent NIST benchmarking study, Aware took the top spot in security for both impersonation and evasion detection for one of the presentation attack types, the only provider to do so. Ranking top 5 in security and top 10 convenience across the strong majority of presentation attack types for evasion, Aware is the only provider who has successfully found the balance of security and user experience with the ability to configure solutions appropriately for every use case.

此外，我們也為業界的活力設定了標準。在最近的一項獨立 NIST 基準測試研究中，Aware 在其中一種演示攻擊類型的模擬和規避檢測安全性方面名列前茅，是唯一做到這一點的提供者。 Aware 在安全性方面名列前5 名，在絕大多數演示攻擊類型的便利性方面名列前10 名，Aware 是唯一一家成功找到安全性和用戶體驗之間的平衡並能夠為每個用例適當配置解決方案的提供者。

And lastly, before I discuss the progress we've made to accelerate growth and drive greater scale for Aware, I want to point out how important it is for us to offer future-proof solutions. In organizations, business requirements will evolve over time, as will the external landscape.

最後，在討論我們在加速成長和擴大 Aware 規模方面所取得的進展之前，我想指出提供面向未來的解決方案對我們來說是多麼重要。在組織中，業務需求會隨著時間的推移而變化，外部環境也是如此。

Our offerings and platform can scale with customers, adapt to changing environmental conditions, risk profiles for consumer demands, and anticipate and/or respond to future attack vectors. This positions us well to maintain the customer satisfaction needed to retain and expand the recurring revenue we've been building.

我們的產品和平台可以與客戶一起擴展，適應不斷變化的環境條件、消費者需求的風險狀況，並預測和/或回應未來的攻擊向量。這使我們能夠很好地保持客戶滿意度，從而保留和擴大我們一直在建立的經常性收入。

In fact, since I joined the company at the end of 2019, we've grown recurring revenue 83% or 16% annually from $5.4 million in 2019 to nearly $10 million over the trailing 12-month period ended September 30, 2023. We expect to end 2023 with more than $11 million in recurring revenue, providing solid visibility going into the new year.

事實上，自從我在2019 年底加入公司以來，我們的經常性收入每年增長83% 或16%，從2019 年的540 萬美元增長到截至2023 年9 月30 日的過去12 個月的近1000 萬美元。我們預計到 2023 年底，經常性收入將超過 1,100 萬美元，為新的一年提供可靠的可見度。

Now with that background and context, I'd like to discuss our operational and financial achievements for the third quarter of 2023. In Q3, we expanded our recurring customer base through our continuous efforts to enhance our market-leading technology and develop our partner ecosystem.

現在，在這樣的背景和背景下，我想討論我們2023 年第三季度的營運和財務成就。在第三季度，我們透過不斷努力增強市場領先的技術並發展我們的合作夥伴生態系統，擴大了我們的經常性客戶群。

Q3 was a very strong quarter for Aware and reflects the tremendous progress we've made, driving profitable and more predictable growth. This quarter, we generated $2.5 million in operating cash flow and continued building upon the foundation for future recurring revenue.

第三季度對 Aware 來說是一個非常強勁的季度，反映了我們取得的巨大進步，推動了獲利和更可預測的成長。本季度，我們產生了 250 萬美元的營運現金流，並繼續為未來的經常性收入奠定基礎。

After working through several deals that were delayed over the past few quarters and months, we secured a $3.4 million contract that, along with annual maintenance options, has a five-year value of up to $5.1 million, which expands our footprint in the US government as well as us beginning to recognize revenue from the five-year $5 million contract we secured with our largest BioSP customer in Q2. Both contracts reflect the trust leading government agencies place in us, and when combined with our new AwareABIS contracts, are expected to contribute more than $1.5 million to our annual recurring revenue.

在完成了過去幾個季度和幾個月裡被推遲的幾項交易後，我們獲得了一份價值340 萬美元的合同，加上年度維護選項，五年期價值高達510 萬美元，這擴大了我們在美國政府的影響力我們也開始確認我們在第二季與最大的 BioSP 客戶簽訂的 5 年期 500 萬美元合約的收入。這兩份合約都反映了領先政府機構對我們的信任，與我們新的 AwareABIS 合約相結合，預計將為我們的年度經常性收入貢獻超過 150 萬美元。

Additionally, our partner-focused selling motions have enabled us to reduce our selling costs while increasing new business conversion at an accelerated pace. In fact, during Q3, we had four new accounts go live and signed two new contracts with our partners for AwareID.

此外，我們以合作夥伴為中心的銷售措施使我們能夠降低銷售成本，同時加快新業務轉換。事實上，在第三季度，我們有四個新帳戶上線，並與 AwareID 合作夥伴簽署了兩份新合約。

Our strong third-quarter performance reflects our continued efforts to increase ARR and drive sustainable future growth. Craig will walk you through our key customer wins and progress on our go-to-market initiatives in more detail, but I wanted to touch on a few more highlights first.

我們強勁的第三季業績反映了我們為提高 ARR 和推動未來永續成長所做的持續努力。克雷格將更詳細地向您介紹我們贏得的關鍵客戶以及我們的上市計劃的進展，但我想先談談更多的亮點。

After emphasizing the development of our customer success team over the past few quarters, we are excited to finally have a formal partnership program in place. Aware has a strong commitment to partner success, and we look forward to directly collaborating with our partners to convert the growing market demand into more wallet share for us and our partners.

在強調了過去幾季我們客戶成功團隊的發展之後，我們很高興終於製定了正式的合作夥伴計畫。 Aware 堅定地致力於合作夥伴的成功，我們期待與合作夥伴直接合作，將不斷增長的市場需求轉化為我們和合作夥伴更多的錢包份額。

Our AwareABIS offering delivered as intended. And we believe the solution is found an excellent niche in the underserved market. We deployed AwareABIS to three law enforcement agencies of which one is on-prem and two are cloud based. Of the three deployments, one began producing recurring revenue in Q3 and the other two would begin producing recurring revenue in Q4.

我們的 AwareABIS 產品按預期交付。我們相信，該解決方案在服務不足的市場中找到了絕佳的利基市場。我們向三個執法機構部署了 AwareABIS，其中一個是本地部署，兩個是基於雲端的。在這三個部署中，一個在第三季開始產生經常性收入，另外兩個將在第四季開始產生經常性收入。

In conjunction with an enhanced partner ecosystem, we also optimized AwareID to make it even more versatile, secure, and accessible by introducing facial identification capabilities and improving the back-end functionality. Now businesses of all size can easily incorporate our world-class biometric authentication without changing their backend.

結合增強的合作夥伴生態系統，我們還優化了 AwareID，透過引入臉部辨識功能和改進後端功能，使其更加通用、安全和易於存取。現在，各種規模的企業都可以輕鬆採用我們世界一流的生物辨識身分驗證，而無需更改其後端。

Furthermore, we added a developer hub to the platform, which encourages developers to experiment with AwareID's capabilities and help build brand affinity amongst the engineering and developer communities. Even though we are continuing to optimize where are these markets fit, it's important to note that AwareID is opening doors across all our biometric solutions for high-quality opportunities with large and recognizable brand names.

此外，我們還在該平台上添加了一個開發者中心，鼓勵開發者嘗試 AwareID 的功能，並協助在工程和開發者社群中建立品牌親和力。儘管我們正在繼續優化這些市場的定位，但值得注意的是，AwareID 正在為我們所有的生物辨識解決方案打開大門，為具有知名品牌的高品質機會打開大門。

As I mentioned earlier, our technology is recognized as a top performer industry-wide and most recently, our PAD algorithms were ranked number one in security for both impersonation and evasion for presentation attack type 4A in the NIST FATE benchmarking test. Aware has also recently been named an industry catalyst and role model into 2023 Biometric Digital Identity Prism Report.

正如我之前提到的，我們的技術被公認為全行業表現最好的技術，最近，我們的 PAD 演算法在 NIST FATE 基準測試中在 4A 類演示攻擊的模擬和規避安全性方面均排名第一。 Aware 最近也被評為 2023 年生物辨識數位身分稜鏡報告中的產業催化劑和典範。

While we can't and don't plan to announce every contract that we've secured or working to secure, Aware is consistently winning business in competitive markets. Our ability to anticipate market trends and adapt our award-winning solutions to specific customer needs continues to contribute to our market leadership.

雖然我們不能也不打算公佈我們已獲得或正在努力獲得的每一份合同，但 Aware 始終在競爭激烈的市場中贏得業務。我們預測市場趨勢並根據特定客戶需求調整我們屢獲殊榮的解決方案的能力繼續為我們的市場領導地位做出貢獻。

Now before moving on to our financial performance, I'd like to briefly address last week's 8-K filing. As noted in the filing, Aware has streamlined its financial organization. Dave Barcelo is no longer with Aware. As part of this realignment, we have promoted our Corporate Controller, David Traverse, to Principal Financial Officer. Dave Barcelo was with Aware for over three years, and we are very fortunate to have his leadership. We cannot thank him enough for his contributions and wish him all the best in his future endeavors.

現在，在討論我們的財務表現之前，我想先簡單介紹一下上週的 8-K 備案。正如文件中所指出的，Aware 已經精簡了其財務組織。戴夫·巴塞羅 (Dave Barcelo) 不再在 Aware 工作。作為重組的一部分，我們已將公司財務總監 David Traverse 提升為財務長。 Dave Barcelo 在 Aware 工作了三年多，我們非常幸運能得到他的領導。我們對他的貢獻感激不盡，並祝福他在未來的努力中一切順利。

We have total confidence in David Traverse fulfilling the financial leadership role. Some of you may recall David from a previous earnings call when he stood in for Dave Barcelo. David joined Aware three years ago as Vice President and Corporate Controller. He's got an extensive background in finance and public accounting.

我們對 David Traverse 履行財務領導職責充滿信心。你們中的一些人可能還記得大衛在之前的財報電話會議上代表戴夫·巴塞隆納的情況。 David 三年前加入 Aware，擔任副總裁兼公司財務長。他在金融和公共會計方面擁有廣泛的背景。

Prior to joining Aware, David was Vice President and Corporate Controller at SeaChange International and Vice President Finance and Chief Financial Officer in Artel Video Systems. He has also worked as a Certified Public Accountant in several public accounting firms. We may not track/file the 10-Q on time and do not anticipate this change to impact our filing cadence or Investor Relations activities.

在加入 Aware 之前，David 曾擔任 SeaChange International 的副總裁兼企業財務總監以及 Artel Video Systems 的財務副總裁兼財務長。他也曾在多家公共會計師事務所擔任註冊會計師。我們可能不會按時追蹤/提交 10-Q，並且預計這項變更不會影響我們的提交節奏或投資者關係活動。

Lastly, we are committed to exiting this year with neutral operating cash flow and continue to optimize our cost structure and focus on maximizing our operating cash flow as we prepare and enter 2024.

最後，我們致力於以中性營運現金流退出今年，並繼續優化我們的成本結構，並在準備和進入 2024 年時專注於最大化我們的營運現金流。

I'll now turn the call over to David to walk us through our financial results for third-quarter 2023. David, over to you.

現在我將把電話轉給 David，讓他向我們介紹 2023 年第三季的財務表現。David，交給你了。

Thank you, Bob, and good afternoon, everyone, on the call. It's a pleasure to be back here again with you today.

謝謝鮑勃，各位來電的大家下午好。很高興今天再次回到這裡和大家在一起。

Turning to our financial results for the third quarter ended September 30, 2023. Total revenue was $6.4 million compared to $3.2 million for the second quarter of 2023 and $3 million for the same year-ago period. The increase in total revenue was primarily due to higher software license sales in the period.

轉向我們截至 2023 年 9 月 30 日的第三季財務業績。總收入為 640 萬美元，而 2023 年第二季為 320 萬美元，去年同期為 300 萬美元。總收入的成長主要是由於該期間軟體授權銷售額的增加。

For Q3 2023, recurring revenue was $2.2 million. The $2.2 million recurring revenue is up 5% sequentially and 4% year over year. Operating cash flow for the quarter was $2.5 million compared to usage of $2.2 million in the prior quarter and usage of $2 million from the same year-ago period.

2023 年第三季度，經常性收入為 220 萬美元。 220 萬美元的經常性收入比上一季成長 5%，比去年同期成長 4%。本季的營運現金流為 250 萬美元，而上一季的使用量為 220 萬美元，去年同期的使用量為 200 萬美元。

Looking at our operating expenses, including the impact of one-time events, our third-quarter 2023 operating expenses were $5.6 million, a decrease from $6.1 million in the prior quarter and up from $600,000 in Q3 of last year.

從我們的營運支出來看，包括一次性事件的影響，我們 2023 年第三季的營運支出為 560 萬美元，低於上一季的 610 萬美元，高於去年第三季的 60 萬美元。

Operating income for the third quarter of 2023 was $700,000 compared to an operating loss of $2.9 million in the prior quarter and operating income of $2.4 million in the same year-ago period. For the third quarter of 2023, GAAP net income totaled $1.1 million or $0.05 per diluted share compared to a GAAP net loss of $2.7 million or $0.13 per diluted share in Q2 2023 and GAAP net income of $2.6 million, or $0.12 per diluted share in Q3 last year.

2023 年第三季的營業收入為 70 萬美元，而上一季的營業虧損為 290 萬美元，去年同期的營業收入為 240 萬美元。 2023 年第三季度，GAAP 淨利潤總計110 萬美元，即稀釋後每股0.05 美元，而2023 年第二季度GAAP 淨虧損為270 萬美元，即稀釋後每股0.13 美元，第三季度GAAP 淨利潤為260 萬美元，即稀釋後每股0.12 美元去年。

Please note that operating expenses, operating income, and net income for Q3 of 2023 included an $800,000 one-time gain related to our adjustment to the fair value of the contingent acquisition payments of our 2021 acquisition of FortressID. And then operating expenses, operating income, and net income of Q3 of 2022 included a $5.7 million one-time gain related to the sale of the company's building located in Bedford, Massachusetts in July of 2022.

請注意，2023 年第三季的營運費用、營運收入和淨利潤包括與我們對 2021 年收購 FortressID 的或有收購付款的公允價值進行調整相關的 800,000 美元一次性收益。然後，2022 年第三季的營運費用、營運收入和淨利潤包括與 2022 年 7 月出售該公司位於馬薩諸塞州貝德福德的大樓相關的 570 萬美元一次性收益。

Our adjusted EBITDA for the quarter, which are reconciled to GAAP net income in our earnings release totaled $400,000, which compares to adjusted EBITDA loss of $2.4 million in the prior quarter and a loss of $2.5 million in the same year-ago period. The significant improvement in adjusted EBITDA was primarily due to higher revenue.

我們本季調整後的 EBITDA 與我們收益發布中的 GAAP 淨利潤一致，總計為 40 萬美元，而上一季調整後的 EBITDA 虧損為 240 萬美元，去年同期虧損為 250 萬美元。調整後 EBITDA 的顯著改善主要是由於收入增加。

Looking at our balance sheet, we ended the quarter at $27.5 million in cash, cash equivalents, and marketable securities compared to $25.1 million at the end of the prior quarter. We purchased 81,083 common shares of stock at an average price of $1.52 per share as part of our previously announced share buyback program. We believe repurchasing our common stock at certain valuation levels presents an attractive opportunity given our strong balance sheet and growth prospects.

從我們的資產負債表來看，本季末我們的現金、現金等價物和有價證券為 2,750 萬美元，而上一季末為 2,510 萬美元。作為我們先前宣布的股票回購計畫的一部分，我們以每股 1.52 美元的平均價格購買了 81,083 股普通股。我們認為，鑑於我們強勁的資產負債表和成長前景，以一定估值水準回購我們的普通股是一個有吸引力的機會。

As we exit 2023, we are supported by a strong and improving cash balance and no debt. Our robust balance sheet enables us to evaluate every high ROI opportunity and has potential to advance our strategic growth roadmap.

2023 年結束時，我們得到了強勁且不斷改善的現金餘額和無債務的支持。我們穩健的資產負債表使我們能夠評估每一個高投資報酬率機會，並有潛力推進我們的策略成長路線圖。

That completes my financial summary. I'd now like to turn the call over to Craig to discuss the advances we made in our go-to-market strategy. Craig?

我的財務摘要就這樣完成了。我現在想將電話轉給克雷格，討論我們在上市策略方面的進展。克雷格？

Thanks, David. It's great to be here with you all today. As Bob discussed, Q3 was a very strong quarter for Aware. We continue to protect and scale our recurring revenue base through the implementation of a formal partner program, further product enhancements and capabilities, and capitalizing on the high-quality opportunities in the pipeline.

謝謝，大衛。很高興今天能和大家在一起。正如 Bob 所討論的，第三季對 Aware 來說是一個非常強勁的季度。我們透過實施正式的合作夥伴計劃、進一步增強產品和功能以及利用管道中的高品質機會，繼續保護和擴大我們的經常性收入基礎。

Building upon the foundation we laid last quarter for future recurring revenue, we closed several deals that were previously pushed to the right, including the large multimillion dollar, multiyear, US federal government contract Bob mentioned earlier.

在我們上個季度為未來經常性收入奠定的基礎上，我們完成了幾項先前被推向右側的交易，包括鮑勃前面提到的價值數百萬美元、多年期的美國聯邦政府合約。

After receiving a lot of positive feedback from our customers, we incorporated facial identification capabilities, enhanced front-end document capture, and better processing functionality into AwareID. In addition to the back-end support and user experience improvements, we included new mobile application frameworks, Flutter and React Native. The AwareID platform now provides value for various use cases without compromising accessibility and improves security and user experience and provides various levels of technical access for developers.

在收到客戶大量的正面回饋後，我們將臉部辨識功能、增強的前端文件擷取和更好的處理功能融入 AwareID 中。除了後端支援和使用者體驗改進之外，我們還引入了新的行動應用程式框架、Flutter 和 React Native。 AwareID 平台現在可以在不影響可訪問性的情況下為各種用例提供價值，並提高安全性和用戶體驗，並為開發人員提供各種級別的技術存取。

As Bob mentioned, we also debuted our developer hub, which is generating excitement for the platform and the developer community and providing easier access to development resources for our customers. We also partnered with a reputable outside firm to harden AwareID's SaaS infrastructure to expand the potential reach of our previously announced partnership with [Software One]. We expect these changes will have a positive impact on our opportunities in the US commercial market and Latin America as a whole.

正如鮑勃所提到的，我們還推出了開發者中心，這為平台和開發者社群帶來了興奮，並為我們的客戶提供了更輕鬆的開發資源存取。我們也與一家信譽良好的外部公司合作，強化 AwareID 的 SaaS 基礎設施，以擴大我們先前宣布的與 [Software One] 合作的潛在影響範圍。我們預計這些變化將對我們在美國商業市場和整個拉丁美洲的機會產生積極影響。

During Q3, we launched a formal partner program to accelerate adoption of our offerings and expand our global reach. Our partner ecosystem is built around three areas of focus to maximize the program's potential reach. The first being transparency, providing greater clarity, transparency around products, road map, pricing tiers, and incentives for current and future partnerships are crucial to integrating our partners into the ecosystem rather than simply being on them.

第三季度，我們啟動了正式的合作夥伴計劃，以加速我們產品的採用並擴大我們的全球影響力。我們的合作夥伴生態系統圍繞著三個重點領域構建，以最大限度地擴大該計劃的潛在影響範圍。首先是透明度，提供更大的透明度，圍繞產品、路線圖、定價層級以及當前和未來合作夥伴的激勵措施，對於將我們的合作夥伴融入生態系統而不是簡單地參與其中至關重要。

One of those lines, the second focus is education. As you're doing a formal survey with our partners and leveraging an outside consultant, it became clear that all our partners had a clear understanding of everything Aware offers, which is why we opened our access to our library of product and marketing resources. Partners are now armed with our product guides, sales decks, API guides, et cetera, which has allowed them to be better educated on our solutions and has enabled them to be more effective sales agents.

其中之一，第二個重點是教育。當您與我們的合作夥伴進行正式調查並聘請外部顧問時，很明顯，我們所有的合作夥伴都清楚地了解 Aware 提供的所有內容，這就是我們開放對產品和行銷資源庫的存取權的原因。合作夥伴現在擁有我們的產品指南、銷售平台、API 指南等，這使他們能夠更好地了解我們的解決方案，並使他們成為更有效的銷售代理。

The third piece of the pie, so to speak, is a co-marketing approach which entails regular internal communications such as attending trade shows together, assisting with marketing collateral and costs, and helping with signage. We have done several webinars with our partners over the last few months on relevant topics to continue to showcase Aware's thought leadership in the industry.

可以說，第三塊是聯合行銷方法，需要定期進行內部溝通，例如一起參加貿易展覽、協助行銷材料和成本以及幫助製作標誌。過去幾個月，我們與合作夥伴就相關主題舉辦了多次網路研討會，以繼續展示 Aware 在業界的思想領導力。

A great example of the evolution of our partner ecosystem is our relationship with Uqoud. Recently, we had the same booth with them at the largest Middle Eastern Technology Conference, GITEX. Since announcing the partnership in March this year, Uqoud has been instrumental in expanding Knomi's footprint in the Middle East. And they have grown from a system integrator to a product company as well. The launch of our partner ecosystem now allows Uqoud to leverage both their local market knowledge and presence and Aware's marketing resources to broaden the reach of all our solutions in the region.

我們與 Uqoud 的關係就是我們合作夥伴生態系統演變的一個很好的例子。最近，我們在中東最大的技術會議GITEX上與他們同一個展位。自今年 3 月宣布合作以來，Uqoud 在擴大 Knomi 在中東的足跡方面發揮了重要作用。他們也從一家系統整合商成長為一家產品公司。我們合作夥伴生態系統的推出現在使 Uqoud 能夠利用他們的本地市場知識和影響力以及 Aware 的營銷資源來擴大我們所有解決方案在該地區的覆蓋範圍。

With an ever-improving product portfolio and formal partner ecosystem, we believe that we are well positioned to capitalize on the high-quality opportunities flowing through our pipeline. We are continuing to see strong demand on the government side in North America and Europe and are working to close multiple deals with the US federal government. The confidence the US government has in our fraud protection is translating into promising leads with prominent government agencies in Canada, United Kingdom, LatAm, and the Middle East.

憑藉著不斷完善的產品組合和正式的合作夥伴生態系統，我們相信我們有能力利用我們管道中的高品質機會。我們繼續看到北美和歐洲政府的強勁需求，並正在努力與美國聯邦政府達成多項交易。美國政府對我們的詐欺保護的信心正在轉化為與加拿大、英國、拉丁美洲和中東著名政府機構的良好合作。

Moreover, by leveraging these robust government relationships, we can accelerate our breakthrough into the US commercial market. We've seen a recent uptick in interest on the commercial side for Aware and have gained a lot of traction in the gaming space as well.

此外，透過利用這些強大的政府關係，我們可以加速突破美國商業市場。我們最近看到 Aware 在商業方面的興趣有所上升，並且在遊戲領域也獲得了極大的吸引力。

Latin America remains our strongest and most competitive market, especially Brazil, where we have multiple encouraging competitive opportunities. We're also deep in the selling process with several deals in Mexico, Chile, and other Latin American countries.

拉丁美洲仍然是我們最強大、最具競爭力的市場，尤其是巴西，我們在那裡擁有多個令人鼓舞的競爭機會。我們也深入參與了墨西哥、智利和其他拉丁美洲國家的幾筆交易的銷售流程。

Despite the geopolitical turmoil in the Middle East, we remain optimistic about the demand and opportunities in Egypt, UAE, and Jordan. Previously, we were very bullish on our prospects in Israel and Iraq. However, considering recent events, we have consulted an outside source to get a better understanding of how it will affect the market.

儘管中東地緣政治動盪，我們仍然對埃及、阿聯酋和約旦的需求和機會持樂觀態度。在此之前，我們非常看好以色列和伊拉克的前景。然而，考慮到最近發生的事件，我們諮詢了外部消息來源，以便更好地了解它將如何影響市場。

As we look forward, my team's initiatives for Q4 and 2024 will revolve around securing AwareID as a leader in our target markets, as well as of solidifying its market fit, building upon and generating additional net momentum amongst our government customers, driving incremental revenue from the commercial side and closing out our pipeline.

展望未來，我的團隊在第四季度和2024 年的舉措將圍繞確保AwareID 作為我們目標市場的領導者以及鞏固其市場契合度、在我們的政府客戶中建立並產生額外的淨動力、推動來自政府客戶的增量收入商業方面並關閉我們的管道。

Now I would like to turn the call back to Bob for more color on our key business drivers. Bob?

現在我想將電話轉回給鮑勃，以獲取有關我們關鍵業務驅動因素的更多資​​訊。鮑伯？

Thanks, Craig. Building upon the foundation we've laid over the past few quarters, we've generated meaningful cash flow and recurring revenue in Q3 through our efforts in new contract structure in our newly secured and expanded customer base. Through the continuous evolution of our technology and the launch of a formal partner program, we continue to leverage our customer relationships to optimize spending, drive recurring revenue, and accelerate adoption for our SaaS-based platform.

謝謝，克雷格。在過去幾季奠定的基礎上，我們透過在新獲得和擴大的客戶群中建立新合約結構的努力，在第三季產生了有意義的現金流和經常性收入。透過技術的不斷發展和正式合作夥伴計畫的推出，我們繼續利用我們的客戶關係來優化支出、推動經常性收入並加速基於 SaaS 的平台的採用。

I'm proud of the revenue team and their efforts that have led to the highest quarterly revenue since Q2 of 2016 and the highest level of quarterly operating cash flow since Q4 of 2018.

我為收入團隊及其努力感到自豪，他們的努力導致了自 2016 年第二季度以來的最高季度收入和自 2018 年第四季以來的最高水準的季度營運現金流。

Looking at the remainder of the year, we are increasingly confident in our ability to achieve or exceed our financial goals, which includes growing total revenue and ARR by 15% in 2023 and to exit the year with neutral operating cash flow, which means we manage both inflows and outflows towards profitability while taking into consideration seasonal timing of cash outlays.

展望今年剩餘時間，我們對實現或超越財務目標的能力越來越有信心，其中包括 2023 年總收入和 ARR 增長 15%，並以中性運營現金流結束這一年，這意味著我們可以管理流入和流出均以盈利為目的，同時考慮現金支出的季節性時間。

With our strong performance this year and especially Q3, we are confident we can meet or exceed our cash goals and believe we are well positioned to continue ramping up recurring revenue and driving sustained growth. We're excited for Aware's future and appreciate everyone's continued support.

憑藉今年尤其是第三季的強勁表現，我們有信心達到或超越我們的現金目標，並相信我們有能力繼續增加經常性收入並推動持續成長。我們對 Aware 的未來感到興奮，並感謝大家的持續支持。

With that, we are ready to open the call for questions. Matt, please provide the appropriate instructions.

這樣，我們就可以開始提問了。馬特，請提供適當的說明。

Thank you, Bob. (Event Instructions)

謝謝你，鮑伯。 （活動須知）

David, what was the recurring revenue for the quarter? How much of that was from subscriptions versus maintenance?

大衛，該季度的經常性收入是多少？其中有多少來自訂閱與維護？

Thanks, Matt. Recurring revenue for the quarter was $2.2 million, with $1.8 million of that coming from maintenance and the rest of that from our subscription-based revenue.

謝謝，馬特。該季度的經常性收入為 220 萬美元，其中 180 萬美元來自維護，其餘部分來自我們基於訂閱的收入。

Thanks, David. Apart from the gaming space, what other markets on the commercial side are you seeing increased interest in?

謝謝，大衛。除了遊戲領域之外，您認為商業方面的其他哪些市場的興趣也在增加？

Sure. Thanks, Matt. We are seeing a lot of opportunity in online gambling, education, workforce management, healthcare, and financial services. As we talked about in the past, we'll continue to leverage our government relationships to gain market share in new geographies and expand our commercial use cases.

當然。謝謝，馬特。我們在線上賭博、教育、勞動力管理、醫療保健和金融服務領域看到了很多機會。正如我們過去談到的，我們將繼續利用我們的政府關係來獲得新地區的市場份額並擴大我們的商業用例。

An example of this is leveraging our strong foundation in Turkey. Turkey's financial sector, we've been able to streamline and our breakthrough into North Africa. And so this has really accelerated our expansion in the Middle East.

一個例子就是利用我們在土耳其的堅實基礎。土耳其的金融部門，我們已經能夠精簡並突破到北非。因此，這確實加速了我們在中東的擴張。

Thanks, Craig. David, another one for you. With a strong balance sheet, what are your capital allocation plans?

謝謝，克雷格。大衛，再給你一份。擁有強大的資產負債表，您的資本配置計畫是什麼？

Yes. We ended the quarter with $27.5 million in cash, cash equivalents and marketable securities, and no debt. We continue to capitalize on the high interest rates as well as our previously announced share repurchase program.

是的。本季結束時，我們擁有 2,750 萬美元的現金、現金等價物和有價證券，沒有債務。我們繼續利用高利率以及先前宣布的股票回購計畫。

Moving into the remainder of 2023 and then 2024, our goal is to maintain a robust cash position that will enable us to evaluate strategic opportunities, what's potential, and maximize shareholder value and drive scale.

進入 2023 年剩餘時間和 2024 年，我們的目標是保持強勁的現金狀況，使我們能夠評估策略機會、潛力，並最大限度地提高股東價值並擴大規模。

Bob, a question for you. Can you give some color as to why you chose to appoint a Principal Financial Officer as opposed to a Chief Financial Officer?

鮑勃，問你一個問題。您能否解釋為什麼您選擇任命財務長而不是財務長？

Sure, Matt. Obviously, this is not a traditional management structure for most public companies, but I feel and we feel that it aligns well with our current organizational scale. Also, our needs and well with our cost optimization initiatives that we have done on.

當然，馬特。顯然，這不是大多數上市公司的傳統管理結構，但我和我們都認為它與我們目前的組織規模非常吻合。此外，我們的需求以及我們所做的成本優化計劃。

So promoting David to Principal Financial Officer allows us to reduce costs without compromising our ability to achieve our financial and operational goals, and also having streamlined financial team aligns with our strategic growth and cash plans. And I'll say it again, David has done a fantastic job as our Corporate Controller over the past three years, and we feel he's the right person for the position.

因此，將大衛提升為財務長使我們能夠在不影響實現財務和營運目標的能力的情況下降低成本，並且精簡的財務團隊與我們的策略成長和現金計劃保持一致。我再說一遍，過去三年來，大衛作為我們的公司財務總監，做得非常出色，我們認為他是擔任該職位的合適人選。

Thanks, Bob. I'm going to combine a couple of questions here. We've received some questions looking for more details around Dave Barcelo's departure specifically if severance is owed. And if any violations, legal proceedings or items have consequence transpired or are pending?

謝謝，鮑伯。我將在這裡合併幾個問題。我們收到了一些問題，希望了解有關戴夫·巴塞隆納離職的更多詳細信息，特別是是否需要支付遣散費。是否發生或懸而未決的任何違規行為、法律訴訟或有後果的事項？

I'll take that one. Dave Barcelo's departure from the company has not result of any dispute or disagreement on any matter. As Bob mentioned earlier, we are thankful for all of Dave's leadership during these past three years. We do anticipate incurring some one-time severance costs, which we reflected in our Q4 and full-year 2023 results. However, we still remain on track to exit the year with neutral operating cash flow.

我會接受那個。戴夫·巴塞羅 (Dave Barcelo) 離開公司並非因任何事項上出現任何爭議或分歧。正如鮑勃之前提到的，我們感謝戴夫在過去三年中的領導。我們確實預計會產生一些一次性遣散費，我們已在第四季度和 2023 年全年業績中反映了這一點。然而，我們仍有望以中性的營運現金流結束今年。

Thanks, David. A question for Craig. Over the past couple of quarters, you've announced a few product enhancements. How are you picturing the evolution of Aware's technology?

謝謝，大衛。問克雷格一個問題。在過去的幾個季度中，您宣布了一些產品增強功能。您如何看待 Aware 技術的發展？

Sure. Aware's technology is primarily driven by our ability to both predict and adapt to the market's needs. Right now, we are focused on three trends in this market. The first being increased adoption of cloud-based solutions; two, cross-platform mobile support; and finally, greater interest in deep learning and AI.

當然。 Aware 的技術主要是由我們預測和適應市場需求的能力所驅動的。目前，我們關注這個市場的三個趨勢。首先是更多地採用基於雲端的解決方案；二、跨平台移動支援；最後，對深度學習和人工智慧產生了更大的興趣。

By focusing on these three areas, we can tailor our technology to be easily and rapidly deployable for any emerging use case or changes in the market. Following the pandemic, digital crime became more advanced and widespread.

透過專注於這三個領域，我們可以客製化我們的技術，以便輕鬆快速地部署任何新興用例或市場變化。疫情過後，數位犯罪變得更加先進和廣泛。

Thanks, Craig. Another one for you. You mentioned in previous calls that you're focused on growing the commercial side of the business. What progress have you made?

謝謝，克雷格。另一份給你。您在先前的電話中提到，您專注於發展業務的商業方面。你取得了什麼進展？

Yes. So as we talked about earlier, Aware's strong reputation in the government space has been generating momentum for the company on the commercial side. The confidence government agencies, especially those larger governments like the US and Europe, have in our technology is starting conversations with larger, more recognizable brands, which we can then leverage to accelerate our breakthrough into the commercial space.

是的。正如我們之前談到的，Aware 在政府領域的良好聲譽一直在為該公司在商業方面帶來動力。政府機構，特別是美國和歐洲等較大的政府對我們的技術的信心正在開始與更大、更知名的品牌進行對話，然後我們可以利用這些品牌來加速我們在商業領域的突破。

Next question. Bob, there was a significant improvement in operating cash flow compared to last year. What drove this?

下一個問題。鮑勃，與去年相比，經營現金流有了顯著改善。是什麼推動了這一點？

Well, thanks, Matt. I think this improvement in cash flow, really it boils down to our persistent execution of our growth strategy and our cost structure optimization efforts. We've been working on optimizing our costs as you know. And we continue to the ramp adoption for all the solutions and really driving for a leaner operational model.

嗯，謝謝，馬特。我認為現金流的改善實際上可以歸結為我們對成長策略的持續執行和成本結構優化的努力。如您所知，我們一直在努力優化成本。我們繼續逐步採用所有解決方案，並真正推動更精簡的營運模式。

Through our recent product enhancements Craig was talking about earlier, and we've been talking about in the press releases and the launch of our formal partnership ecosystem, we've really expanded our technologies' use cases and made it more accessible to more of the population. So the upgrades we rolled out this year to Knomi and AwareID enabled our partners and sales team to go to market with more versatile, secure, easy-to-use solutions, and that resulted in increased sales and upselling.

透過克雷格之前談到的我們最近的產品增強，以及我們在新聞稿和正式合作夥伴生態系統的啟動中談到的，我們確實擴展了我們技術的用例，並使更多的人更容易使用它。人口。因此，我們今年推出的 Knomi 和 AwareID 升級使我們的合作夥伴和銷售團隊能夠以更通用、安全、易於使用的解決方案進入市場，從而增加了銷售和追加銷售。

Additionally, the debut of our formal partner ecosystem and pricing tiers now allows organizations of all sizes from start-ups to global enterprises to adopt Aware's technology. And lastly, our partnership program really maximized the potential reach of our current and future partnerships without significantly increasing our go-to-market costs.

此外，我們正式合作夥伴生態系統和定價層的首次亮相現在允許從新創公司到跨國企業的各種規模的組織採用 Aware 的技術。最後，我們的合作夥伴計畫確實最大限度地擴大了我們目前和未來合作夥伴關係的潛在影響力，而不會顯著增加我們的上市成本。

Thanks, Bob. Our next question, Aware spoke with the CIO of Banco Daycoval at Identity Week America last month, how has this partnership evolved over the years? And what impact has the relationship had in terms of other opportunities for Aware?

謝謝，鮑伯。我們的下一個問題是，Aware 上個月在美國身份週上與 Banco Daycoval 的首席資訊長進行了交談，多年來這種合作關係是如何發展的？這種關係對 Aware 的其他機會有何影響？

Sure. Banco Daycoval was one of the pioneers in the Brazilian financial sector to incorporate biometrics and has for the past seven years. They use Knomi to validate account access and credit applications for their customers. Since deploying Knomi, the bank has had very low levels of fraud, even with the number of transactions increasing nearly tenfold in the last five years and the recent evolution of criminal activity.

當然。 Banco Daycoval 是巴西金融業採用生物辨識技術的先驅之一，並且在過去的七年裡一直如此。他們使用 Knomi 驗證客戶的帳戶存取和信用申請。自從部署 Knomi 以來，儘管交易數量在過去五年中增加了近十倍並且最近犯罪活動不斷演變，但該銀行的詐欺率仍然非常低。

Digital crime has become more advanced and widespread throughout Brazil as the technology became an integral part of everyday life. This increase in online fraud and digitization has created opportunities for Aware to gain market share in sectors like e-commerce, sporting events, et cetera.

隨著科技成為日常生活中不可或缺的一部分，數位犯罪在巴西各地變得更加先進和普遍。線上詐欺和數位化的增加為 Aware 在電子商務、體育賽事等領域獲得市場份額創造了機會。

Moreover, Aware's success thwarting a new malware designed to attack banks like Banco Daycoval could translate into additional opportunities within the global financial sector as the software is now being exported to the United States and Europe.

此外，Aware 成功阻止了旨在攻擊 Banco Daycoval 等銀行的新惡意軟體，這可能會轉化為全球金融領域的更多機會，因為該軟體現在已出口到美國和歐洲。

For anyone that's interested, you can watch the interview between our LatAm General Manager and the Banco Daycoval CIO on Aware's YouTube channel. In fact, I would recommend checking out our YouTube channel. We continue to build on and it is a big piece of our focus from a marketing perspective as we continue to build out different ways to message our audiences and our prospects.

如果您有興趣，您可以在 Aware 的 YouTube 頻道上觀看我們的拉丁美洲總經理和 Banco Daycoval 資訊長之間的訪談。事實上，我建議您查看我們的 YouTube 頻道。我們將繼續發展，從行銷的角度來看，這是我們關注的一個重要部分，因為我們繼續建立不同的方式來向我們的受眾和潛在客戶傳達訊息。

Thanks, Craig. What kind of feedback are you receiving from customers regarding AwareID or your other solutions?

謝謝，克雷格。您從客戶那裡收到了關於 AwareID 或您的其他解決方案的什麼樣的回饋？

Sure. The feedback from our clients around AwareID are very focused on two things: the ease of use and the breadth of the offering. On the heels of our latest release, customers and prospects are using Aware ID to replace multiple technologies and improve the user experience in their app or online presence.

當然。我們的客戶對 AwareID 的回饋主要集中在兩件事上：易用性和產品的廣度。在我們最新版本發布之後，客戶和潛在客戶正在使用 Aware ID 來取代多種技術並改善其應用程式或線上狀態的使用者體驗。

The addition of documentation authentication with cutting-edge AI-driven face liveness is delivering a better, more secure user experience. The speed of deployment has gone from months to days so that customers can deploy, test, and iterate with very little assistance and/or developer resources.

添加文件身份驗證和尖端的人工智慧驅動的面部活性，可提供更好、更安全的用戶體驗。部署速度已從幾個月縮短到幾天，因此客戶只需很少的幫助和/或開發人員資源即可進行部署、測試和迭代。

David, a question for you. Why was the company not more aggressive in buying back in its buyback program?

大衛，問你一個問題。為什麼公司沒有在回購計畫中更積極地回購股票？

Thanks, Matt. So as mentioned earlier, we do believe in buying back our stock can be attractive use of capital. However, we are limited based on Nasdaq rules of how much we can buyback based on historical trading volumes.

謝謝，馬特。因此，正如前面提到的，我們確實相信回購我們的股票可以成為有吸引力的資本用途。然而，根據納斯達克規則，我們根據歷史交易量可以回購的數量受到限制。

Thanks, David. At this time, this concludes our question-and-answer session. If your question wasn't answered, please email Aware's IR team at AWRE@gateway-grp.com.

謝謝，大衛。至此，我們的問答環節就結束了。如果您的問題沒有得到解答，請發送電子郵件至 Aware 的 IR 團隊：AWRE@gateway-grp.com。

I'd now like to turn the call back over to Bob for closing remarks.

我現在想將電話轉回給鮑勃，讓他作結束語。

I'd like to thank all of you for joining today's call. And also, of course, thank our employees, partners, shareholders for the continued support that they provide us. And as a reminder, you may learn more about our strategy and investor presentation that's available on our website. And we look forward to updating you on our progress on our next call. Matt, over to you.

我要感謝大家參加今天的電話會議。當然，也要感謝我們的員工、合作夥伴、股東為我們提供的持續支持。提醒一下，您可以在我們的網站上了解有關我們的策略和投資者演示的更多資訊。我們期待在下次電話會議上向您通報我們的最新進展。馬特，交給你了。

Thanks, Bob. I'd like to remind everyone that a recording of today's call will be available for replay via link in the Investors section of the company's website.

謝謝，鮑伯。我想提醒大家，今天的電話會議錄音將可以透過公司網站投資者部分的連結重播。

Thank you for joining us today for Aware's third-quarter 2023 conference call. You may now disconnect.

感謝您今天參加我們的 Aware 2023 年第三季電話會議。您現在可以斷開連線。