Aware Inc (AWRE) 2024 Q2 法說會逐字稿

Good afternoon, and welcome to our second quarter 2024 conference call. Joining us today are the company's Chief Executive Officer and President, Robert Eckel, Chief Financial Officer, David Traverse; Chief Revenue Officer, Craig Herman, and Chief Product Officer, Heidi Hunter. Following their remarks, we will open the call to questions. If you'd like to submit a question you can do so at any time using the built-in ask-a-question feature in the webcast player.

下午好，歡迎參加我們的 2024 年第二季電話會議。今天加入我們的有公司執行長兼總裁 Robert Eckel、財務長 David Traverse；首席營收長克雷格·赫爾曼 (Craig Herman) 和首席產品長海蒂·亨特 (Heidi Hunter)。在他們發表講話後，我們將開始提問。如果您想提交問題，您可以隨時使用網路廣播播放器中的內建提問功能來提交問題。

Before we begin today's call, I'd like to remind everyone that the presentation today contains forward-looking statements that are based on the current expectations of orders 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訂單管理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.

聽眾請注意今天新聞稿末尾的安全港段落。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。

We wish to caution you that there are factors that could cause actual results to differ materially from those 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. Any forward-looking statements should be considered in light of those factors.

我們希望提醒您，有些因素可能導致實際結果與此類聲明所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。任何前瞻性陳述都應根據這些因素予以考慮。

You are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date made. Although it may voluntarily do so from time to time, it undertakes no commitment to update or revise the forward-looking statements, whether because of new information, future events or otherwise, except as required by applicable securities laws.

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。儘管它可能不時自願這樣做，但它不承諾更新或修改前瞻性陳述，無論是因為新資訊、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 as the term is defined by the SEC in Regulation G. Non-GAAP financial measures should not be considered in isolation from or as a substitute for financial information presented in compliance with GAAP. Accordingly or has provided a 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某些非 GAAP 財務指標，該術語由 SEC 在 G 條例中定義。因此，或已在公司今天發布的收益報告中提供了這些非公認會計原則財務指標與最直接可比較的公認會計原則指標的調節表。

I'd like to remind everyone that this presentation will be recorded and made available for replay via 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. After the market closed, we reported our results for the second quarter ending June 30, 20204. A copy of the press release is available in the Investor Relations section of our website.

謝謝，馬特。大家下午好，感謝您今天加入我們。收盤後，我們公佈了截至 20204 年 6 月 30 日的第二季業績。我們網站的投資者關係部分提供了新聞稿的副本。

For today's call, I'll start with our financial and operational highlights. David, our CFO, will then detail our financial results, followed by Heidi, our CTO, who will review our biometrics platform and strategic vision. Craig, our CRO will cover key business developments and customer wins, and I'll conclude with our strategic outlook before we open for questions.

在今天的電話會議中，我將從我們的財務和營運亮點開始。然後，我們的財務長 David 將詳細介紹我們的財務業績，隨後我們的技術長 Heidi 將審查我們的生物辨識平台和策略願景。我們的首席風險長克雷格（Craig）將負責關鍵業務發展和客戶贏得，在我們開始提問之前，我將總結我們的策略前景。

We continued our strong momentum through Q2, enabling us to deliver impressive financial results for the first half of 2024. In the second quarter, we generated 36% and 31% year-over-year increases in total revenue and recurring revenue, respectively, driven both by new customer acquisitions and expanded relationships with existing clients across both our key markets and core product lines. Craig will go into more depth on these key contract wins in a few moments.

我們在第二季度繼續保持強勁勢頭，使我們能夠在 2024 年上半年取得令人印象深刻的財務業績。第二季度，我們的總收入和經常性收入分別年增 36% 和 31%，這得益於新客戶的獲取以及與關鍵市場和核心產品線現有客戶關係的擴大。克雷格稍後將更深入地討論這些關鍵合約的贏得情況。

We also maintained our cost optimization in the quarter, which is reflected in a 7% decrease in operating expenses compared to the prior year period. In the first half of 2024, our focus on operational efficiency and sustainable growth yielded remarkable results. We achieved a robust 17% year-over-year increase in our top line, coupled with a substantial 51% improvement in our bottom line.

本季我們也保持了成本優化，營運費用較去年同期下降了 7%。2024年上半年，我們對營運效率和永續成長的關注取得了顯著成果。我們的營收年增 17%，淨利大幅提高 51%。

Additionally, our recurring revenue grew by 14% compared to the same period last year. These achievements underscore our continued progress in expanding and securing our recurring revenue customer base, enhancing our product portfolio and implementing effective operational efficiency initiatives, demonstrating our commitment to long-term value creation and positions us for continued success in the market.

此外，我們的經常性收入與去年同期相比成長了 14%。這些成就凸顯了我們在擴大和確保經常性收入客戶群、增強我們的產品組合和實施有效的營運效率計劃方面不斷取得的進展，展示了我們對創造長期價值的承諾，並使我們能夠在市場上持續取得成功。

We're thrilled with our appointment of Heidi Hunter as our new Chief Product Officer with over a decade of experience in the identity space, Product Strategy, Development and fraud prevention. Heidi brings a wealth of experience to aware. Heidi will bring her impressive track record in achieving product market fit and driving adoption to lead the enhancement of our product offerings and spearhead our expansion in the commercial sector.

我們很高興任命 Heidi Hunter 為新任首席產品官，她在身分領域、產品策略、開發和詐欺預防方面擁有十多年的經驗。海蒂帶來了豐富的經驗。海蒂將帶來她在實現產品市場契合和推動採用方面的令人印象深刻的記錄，以領導我們產品供應的增強並引領我們在商業領域的擴張。

Well, Heidi will shortly share more about her background in initial plans for where I wanted to take this moment to introduce her and express our enthusiasm for the valuable perspective and leadership he brings our team. Her appointment represents a significant step forward in our mission to deliver cutting-edge solutions and drive sustainable growth.

好吧，海蒂很快就會在初步計劃中分享更多關於她的背景的信息，我想藉此機會介紹她，並表達我們對他為我們團隊帶來的寶貴觀點和領導力的熱情。她的任命代表著我們在提供尖端解決方案和推動永續成長的使命中向前邁出了重要一步。

I'll now turn the call over to David, who will discuss our financial results for the second quarter and the first half of the year. Over to you, David.

我現在將電話轉給大衛，他將討論我們第二季和上半年的財務表現。交給你了，大衛。

Thank you, Bob, and good afternoon, everyone. Turning to our financial results for the second quarter ended June 30, 2024. Total revenue was $4.3 million, marking a 36% increase from $3.2 million in the same quarter of last year. This growth was driven by two key factors. Recurring revenue increased by $600,000, underscoring our success in building a stable, predictable income stream and license sales that contributed an additional $0.5 million. This was primarily due to expansion deal with the existing European customer.

謝謝鮑勃，大家下午好。轉向我們截至 2024 年 6 月 30 日的第二季財務表現。總營收為 430 萬美元，比去年同期的 320 萬美元成長 36%。這一增長是由兩個關鍵因素推動的。經常性收入增加了 60 萬美元，這凸顯了我們在建立穩定、可預測的收入流和許可證銷售方面所取得的成功，並額外貢獻了 50 萬美元。這主要是由於與現有歐洲客戶的擴張交易。

This demonstrates our ability to grow with our current client base and highlights our expanding international presence. These results reflect our dual strategy of nurturing long-term client relationships, also capitalizing on opportunities for larger recurring opportunities or onetime sales. Substantial year-over-year growth validates our business model and position us well for continued expansion in both recurring and license-based revenue streams.

這證明了我們與現有客戶群一起成長的能力，並凸顯了我們不斷擴大的國際影響力。這些結果反映了我們的雙重策略：培養長期客戶關係，同時利用更大的經常性機會或一次性銷售的機會。同比的大幅成長驗證了我們的業務模式，並使我們能夠在經常性收入和基於許可的收入流方面持續擴張。

Now moving down the income statement. Operating expenses were $5.7 million, a $0.5 million or 7% year-over-year decrease compared to $6.1 million in Q2 of last year. Operating loss improved 54% year-over-year to $1.3 million compared to a loss of $2.9 million for the same year ago period.

現在將損益表向下移動。營運費用為 570 萬美元，比去年第二季的 610 萬美元減少 50 萬美元，即 7%。營運虧損年減 54%，達到 130 萬美元，去年同期為虧損 290 萬美元。

GAAP net loss totaled $1.1 million, or $0.05 per diluted share, a 59% improvement compared to a loss of $2.7 million or $0.13 per diluted share in Q2 of 2023. Our adjusted EBITDA loss, which we reconcile to GAAP net income in our earnings release totaled $1 million, an improvement compared to a loss of $2.4 million the same year ago period. The year-over-year improvement in net loss and adjusted EBITDA was primarily due to increased revenue and continued reductions in operating expenses.

GAAP 淨虧損總計 110 萬美元，即稀釋後每股 0.05 美元，與 2023 年第二季的虧損 270 萬美元，即稀釋後每股 0.13 美元相比，改善了 59%。我們調整後的 EBITDA 損失（我們在收益發布中與 GAAP 淨利潤進行調整）總計 100 萬美元，比去年同期的 240 萬美元損失有所改善。淨虧損和調整後 EBITDA 的年比改善主要是由於收入增加和營運費用持續減少。

Turning to our financial results for the six months ended June 30, 2024, total revenue was $8.7 million, up 17% from $7.5 million in the first half of last year. This is driven by a $700,000 increase in recurring revenue and a $0.5 million increase in license sales from existing customer expansions.

看看我們截至 2024 年 6 月 30 日的六個月的財務業績，總收入為 870 萬美元，比去年上半年的 750 萬美元增長 17%。這是由於經常性收入增加了 70 萬美元，以及現有客戶擴展導致的許可證銷售額增加了 50 萬美元。

Recurring revenue grew 14% year-over-year to $5.9 million or 67% of total revenue, underscoring our continued shift towards a more predictable revenue model. The growth in both total and recurring revenue reflects the strength of our business model and the increased value our solutions provide to customers. Our focus on nurturing long-term client relationships is paying off, positioning us well for sustainable growth in the future.

經常性收入年增 14%，達到 590 萬美元，佔總收入的 67%，這凸顯了我們不斷轉向更可預測的收入模式。總收入和經常性收入的成長反映了我們業務模式的優勢以及我們的解決方案為客戶提供的價值的增加。我們對培養長期客戶關係的關注正在得到回報，為我們未來的永續成長做好了準備。

Our operating expenses decreased $1 million or 8% year-over-year to $11.3 million compared to $12.3 million in the prior year. Operating loss improved 46% year-over-year to $2.6 million compared to an operating loss of $4.8 million in the same year ago period.

我們的營運費用年減 100 萬美元，即 8%，達到 1,130 萬美元，而前一年為 1,230 萬美元。營運虧損年減 46%，達到 260 萬美元，去年同期營運虧損為 480 萬美元。

Net loss totaled $2.1 million or $0.1 per diluted share, a 51% improvement compared to a net loss of $4.2 million, or $0.2 per diluted share in the first half of 2023. Adjusted EBITDA loss improved to $ 1.9 million, which compares to a loss of $3.8 million in the same year ago period.

淨虧損總計 210 萬美元，即稀釋後每股 0.1 美元，與 2023 年上半年的淨虧損 420 萬美元，即稀釋後每股 0.2 美元相比，改善了 51%。調整後 EBITDA 虧損改善至 190 萬美元，而去年同期虧損為 380 萬美元。

Turning to our balance sheet, cash, cash equivalents and marketable securities totaled $27.4 million as of June 30, 2024. This compares to $30.9 million as of December 31, 2023. Our robust financial foundation empowers us to strategically pursue growth opportunities and make targeted investments. We are actively exploring initiatives to enhance our technology edge seeking avenues to expand our market presence and carefully evaluating opportunities that align with our long-term vision.

就我們的資產負債表而言，截至 2024 年 6 月 30 日，現金、現金等價物及有價證券總計 2,740 萬美元。相比之下，截至 2023 年 12 月 31 日，這一數字為 3,090 萬美元。我們穩健的財務基礎使我們能夠策略性地尋求成長機會並進行有針對性的投資。我們正在積極探索增強我們技術優勢的舉措，尋求擴大市場份額的途徑，並仔細評估符合我們長期願景的機會。

This approach allows us to remain agile in a dynamic market, capitalize on emerging trends and technologies and ensure sustainable growth and value creation. As we've talked about, we maintain a disciplined approach to capital allocation, balancing prudent investments with maintaining our financial strength. This strategy positions us to seize opportunities that will drive innovation, expand our reach and ultimately deliver increased value to our shareholders.

這種方法使我們能夠在充滿活力的市場中保持敏捷，利用新興趨勢和技術，並確保永續成長和價值創造。正如我們所討論的，我們對資本配置保持嚴格的態度，在審慎投資與維持財務實力之間取得平衡。這項策略使我們能夠抓住機遇，推動創新，擴大我們的業務範圍，最終為我們的股東帶來更高的價值。

Our focus remains on opportunities that not only complement our existing portfolio, but also have the potential to significantly accelerate our growth trajectory and strengthen our competitive position in the market.

我們的重點仍然是那些不僅可以補充我們現有投資組合，而且有可能顯著加速我們的成長軌跡並加強我們在市場中的競爭地位的機會。

This completes my financial summary. I'd now like to turn the call over to Heidi, let her introduce herself .

我的財務摘要到此結束。我現在想把電話轉給海蒂，讓她自我介紹一下。

Thank you, David. I'm very happy to have the opportunity today to speak to the investor community about why I joined to be aware, leadership team and I share my excitement and perspective on the incredible transformative path, whereas on. I have spent the lion's share of my career working in the identity industry. Before joining where I worked in various roles and product strategy and customer success for a global identity provider.

謝謝你，大衛。我很高興今天有機會向投資者社群講述我為何加入 Beware 領導團隊，並分享我對這條令人難以置信的變革道路的興奮和看法。我職業生涯的大部分時間都在身分識別行業工作。在加入之前，我曾在一家全球身分提供者擔任過各種職務，負責產品策略和客戶成功。

I'm sure you can imagine over that time, I truly observe the ever evolving transformation of how organizations must identify and authenticate the identities they want to do business with. I love working with engineers to build advanced products that delight customers and help them evolve their business, their asoftware.

我相信您可以想像，在那段時間裡，我確實觀察到組織必須如何識別和驗證他們想要與之開展業務的身份的不斷發展的轉變。我喜歡與工程師合作建立先進的產品，讓客戶滿意並幫助他們發展業務和軟體。

I wanted to continue advancing my career and contributions in the identity space with an organization that built biometrics solutions and focused on transformative AI driven technologies. After discussing Aware's vision and strategy with Bob and understanding Aware's 10-year legacy and breadth of solutions, I felt it was a great opportunity and fit.

我希望與一個建立生物辨識解決方案並專注於變革性人工智慧驅動技術的組織一起繼續推進我的職業生涯並在身分領域做出貢獻。在與 Bob 討論了 Aware 的願景和策略並了解了 Aware 10 年的傳統和廣泛的解決方案後，我覺得這是一個很好的機會和契合點。

I'm very excited to be part of the company's transformation. Now that you have a little background on me, I'd like to discuss who aware is in the company's innovation and transformational journey over the last few years in more depth for those new or relatively new to the story.

我很高興能夠成為公司轉型的一部分。現在您已經了解了我的一些背景，我想為那些新的或相對較新的人更深入地討論誰意識到了公司過去幾年的創新和轉型之旅。

Over the past four years, where has strategically shifted towards a recurring revenue model, capitalizing on its established biometric technology and expertise. This transformation is driven by our robust technological foundation and forward-looking business practices. Merging our legacy of innovation was market driven evolution.

在過去的四年裡，何氏利用其成熟的生物辨識技術和專業知識，策略性地轉向了經常性收入模式。這一轉變是由我們強大的技術基礎和前瞻性的業務實踐所推動的。市場驅動的演變融合了我們的創新遺產。

Formerly focused on supplying multi-modal biometric components to government IT integrators. Aware has restructured and integrated these elements into a comprehensive biometric identity platform. Today, this platform allows customers to tailor solutions to their specific needs, whether deployed on-premises or through software as a service. By expanding our partner network to include value added resellers, OEMs and a wider range of IT integrators, we have extended our market presence beyond government sectors to encompass diverse commercial applications. Democratizing access to biometric technology across all organizational sizes.

先前專注於向政府 IT 整合商提供多模式生物辨識組件。Aware 對這些元素進行了重組並將其整合到一個全面的生物辨識平台中。如今，該平台允許客戶根據其特定需求客製化解決方案，無論是在本地部署還是透過軟體即服務部署。透過擴大我們的合作夥伴網絡，將加值經銷商、原始設備製造商和更廣泛的 IT 整合商納入其中，我們將市場影響力擴展到政府部門之外，涵蓋各種商業應用。在所有規模的組織中實現生物辨識技術的民主化。

Aligned with Acuity market intelligence, digital identity Prism framework Aware began with core biometric technology and has evolved into a leading biometric identity platform provider. Augmented by authentication and identity verification features alongside our biometric orchestration product, our modular scalable approach supports organizations across industries and varied use cases.

與 Acuity 市場情報結合，數位身分 Prism 框架 Aware 始於核心生物辨識技術，現已發展成為領先的生物辨識平台提供者。透過身份驗證和身份驗證功能以及我們的生物識別編排產品的增強，我們的模組化可擴展方法支援跨行業和各種用例的組織。

Looking ahead Aware aims to further industry transformation by developing sector-specific pre-configured biometric solutions for vertical markets, fostering innovation within our partner ecosystem. Our dedication persists in advancing technology and facilitating digital identity solutions for both commercial and government clients and sharing our offerings cater comprehensively to identification, verification and authentication needs.

展望未來 Aware 旨在透過為垂直市場開發針對特定產業的預先配置生物辨識解決方案來進一步推動產業轉型，從而促進合作夥伴生態系統內的創新。我們堅持不懈地致力於推動技術進步，為商業和政府客戶提供數位身分解決方案，並分享我們的產品，全面滿足識別、驗證和身分驗證的需求。

I'm thrilled to join new Aware team. And with that, I will hand it over to Craig to give an update on the advancements and progress we've made in the company's go-to-market strategy for holiday.

我很高興加入新的 Aware 團隊。接下來，我將把它交給克雷格，介紹我們在公司假期行銷策略方面取得的進展和進展的最新情況。

Thanks, Heidi. In Q2 2024, we secured several significant deals across both our core products and geographies, underscoring the growing demand of our advanced biometric solutions in both government and commercial sectors. This quarter, we secured six key contracts in our ABS Nozomi aware, ID and bio SP. product categories of these deals, several were contracts with the US federal government.

謝謝，海蒂。2024 年第二季度，我們在核心產品和地區達成了幾項重大交易，凸顯了政府和商業部門對我們先進生物辨識解決方案不斷增長的需求。本季度，我們在 ABS Nozomi Aware、ID 和 Bio SP 領域獲得了六份重要合約。在這些交易的產品類別中，有幾項是與美國聯邦政府的合約。

These deals were a mix of commercial law enforcement and US government agencies awareness, trusted not only by all three branches of the US government, but also by more than 20 countries over 60 partners over 20 financial institutions and 150 law enforcement agencies.

這些交易融合了商業執法和美國政府機構的意識，不僅受到美國政府所有三個部門的信任，而且還受到20 多個國家、​​60 多個合作夥伴、20 多個金融機構和150 個執法機構的信任。

Our biometric solutions are used by numerous countries, agencies and large commercial organizations that you are all familiar with. Our multimodal platform also continues to gain traction. We achieved wins with our fingerprint Iris and facial recognition technologies, all of which are experiencing growing demand within the market. We expect this momentum to continue, and we are seeing increasing opportunities for our differentiated and innovative platform across both the government and commercial sectors.

我們的生物辨識解決方案被您所熟悉的許多國家、機構和大型商業組織所使用。我們的多式聯運平台也持續受到關注。我們憑藉指紋虹膜和臉部辨識技術取得了勝利，所有這些技術的市場需求都在不斷增長。我們預計這種勢頭將持續下去，我們看到政府和商業部門的差異化創新平台的機會越來越多。

With our breadth of use cases in our heart and legacy solutions, we are poised to capitalize on this increasing demand. We also further enhanced our partnership ecosystem in Q2. This quarter, we emphasized optimizing our partner network to enhance onboarding enablement. Not only did we add new partners to our network, but we also removed nonperforming partners, which will help us moving forward.

憑藉我們心中廣泛的用例和遺留解決方案，我們準備充分利用這一不斷增長的需求。第二季我們也進一步增強了我們的合作夥伴生態系統。本季度，我們強調優化合作夥伴網路以增強入職支援。我們不僅在我們的網路中添加了新的合作夥伴，而且還刪除了表現不佳的合作夥伴，這將有助於我們前進。

We believe we have the right partners in place with the right resources and healthy visibility into future partnerships that will enable us to convert our robust pipeline. We also launched and secured some key partnerships for aware ID that we expect to drive significant growth as a proof point of this success.

我們相信，我們擁有合適的合作夥伴，擁有合適的資源和對未來合作關係的良好了解，這將使我們能夠轉變我們強大的管道。我們也啟動並建立了一些針對感知 ID 的重要合作夥伴關係，我們預計這些合作夥伴關係將推動顯著成長，作為這一成功的證明。

As Bob mentioned, we made significant strides in expanding our global footprint through renewed and expanded contracts across key regions, including the United Kingdom, Brazil and EMEA. This included securing a $400,000 license expansion in Europe, underscoring our ability to foster strong client relationships and capture additional market share.

正如鮑勃所提到的，我們透過在英國、巴西和歐洲、中東和非洲等關鍵地區續約和擴大合同，在擴大全球足跡方面取得了重大進展。這包括在歐洲獲得 40 萬美元的許可擴張，突顯了我們培養牢固的客戶關係和佔領額外市場份額的能力。

Another notable win I'd like to call out in Q2, securing our largest Airbus contract today a $1.2 million five year agreement. Once this contract has gone live, we anticipate it will significantly bolster our recurring revenue stream and increase operating expense leverage going forward. Another key aspect of this contract is that it reflects our increased focus on being more diligent and deliberate about the opportunities we pursue.

我想在第二季度提到另一個值得注意的勝利，今天獲得了我們最大的空中巴士合同，一份價值 120 萬美元的五年協議。一旦該合約生效，我們預計它將顯著增強我們的經常性收入來源並提高未來的營運費用槓桿。這份合約的另一個關鍵方面是，它反映了我們更注重更勤奮和深思熟慮地追求我們所追求的機會。

By that, I mean, we are prioritizing strategic opportunities that are well suited for Aware's current technology portfolio, which is expansive in terms of use cases without compromising security or customer experiences, while also enabling us to increase cost optimization and recurring revenue.

我的意思是，我們正在優先考慮非常適合Aware 當前技術組合的策略機會，該技術組合在用例方面非常廣泛，而不會影響安全性或客戶體驗，同時也使我們能夠提高成本優化和經常性收入。

Regarding our breadth of use cases, I'd like to highlight a few where our technology has had significant impacts. In law enforcement, we partnered with a leading police department in solving over 45 cold cases with advanced biometrics systems and analysis tools substantially improving their closed case rates in financial services, a large bank in South America Leveraged Aware's AI enabled wireless detection algorithms integrated into their workflow to reduce their fraud rate by 87% and save millions of dollars in the first year.

關於我們廣泛的用例，我想強調一些我們的技術產生重大影響的例子。在執法方面，我們與一家領先的警察部門合作，利用先進的生物識別系統和分析工具解決了超過45 起懸而未決的案件，大大提高了金融服務領域的結案率，南美洲的一家大型銀行利用Aware 的人工智慧無線檢測演算法整合到他們的金融服務中。

As we move forward, our team remains steadfast in converting our robust and growing pipeline by driving subscription based revenue through enhancing our IDs, product market fit and leveraging our partner network.

隨著我們的前進，我們的團隊仍然堅定不移地透過增強我們的 ID、產品市場契合度和利用我們的合作夥伴網路來推動基於訂閱的收入，從而轉變我們強大且不斷增長的管道。

Now I'll turn the call back to Bob for further details on our strategic growth initiatives and 2024 outlook. Bob?

現在，我將把電話轉回給 Bob，以了解有關我們策略性成長計畫和 2024 年展望的更多詳細資訊。鮑伯？

Thanks, Craig Looking ahead to the second half of the year, we remain confident in our expectations to deliver double-digit revenue and annual recurring revenue growth in 2024. With the top and bottom line year-over-year improvements we generate in the first half of the year as well as increased visibility and consistency in our robust pipeline Craig discussed, we believe we are on track to achieve our 2024 expectations. Strategically remain focused on executing our multifaceted growth plan, which revolves around several key initiatives.

謝謝，克雷格。隨著上半年我們實現的收入和利潤逐年改善，以及 Craig 所討論的強大管道的可見性和一致性的提高，我們相信我們有望實現 2024 年的預期。在策略上繼續專注於執行我們的多方面成長計劃，該計劃圍繞著幾個關鍵舉措。

One, enhancing predictability through recurring revenue and SaaS models. Two, expanding our global partner ecosystem to maximize opportunities with technology integrators and OEM partners. Three, prioritizing growth by cross-selling and upselling to our established customer base, led by our dedicated customer success team.

第一，透過經常性收入和 SaaS 模式增強可預測性。第二，擴大我們的全球合作夥伴生態系統，以最大限度地利用技術整合商和 OEM 合作夥伴的機會。第三，在我們專門的客戶成功團隊的領導下，透過交叉銷售和追加銷售來優先考慮對我們現有客戶群的成長。

Four, entering new commercial markets with targeted use cases while empowering partners to diversify their revenue streams. Five, maintaining technological leadership through our R&D innovation team and operational data, AI and machine learning capabilities to address emerging security challenges, and six, continually reviewing strategic collaborations and acquisitions to expand our capabilities and market reach.

第四，透過有針對性的用例進入新的商業市場，同時幫助合作夥伴實現收入來源多元化。第五，透過我們的研發創新團隊和營運數據、人工智慧和機器學習能力保持技術領先地位，以應對新出現的安全挑戰；第六，不斷審查策略合作和收購，以擴大我們的能力和市場覆蓋範圍。

We continue to drive customer value with sector-specific preconfigured biometric solutions for common use cases, balancing both security and customer experience. Given our strong financial foundation, we believe we are poised for a top line in ARR growth and profitability as we further our innovation product market fit as we work closely with our clients and adapting to market changes.

我們繼續透過針對常見用例的特定產業預先配置生物辨識解決方案來推動客戶價值，平衡安全性和客戶體驗。鑑於我們強大的財務基礎，我們相信，隨著我們與客戶密切合作並適應市場變化，進一步推動我們的創新產品市場適應，我們將在 ARR 成長和獲利能力方面實現頂線。

We continue to enable and leverage our partners as well as our direct relationships, providing our own pre-configured offerings as well as platforms for partner to build their own solutions. Aware, consistently strives to be recognized as a company associated with biometrics simplified. We are here and ready to improve our customers' business results through biometrics. We will now move to the Q&A portion of our call. Matt, please provide the appropriate instructions.

我們繼續支持和利用我們的合作夥伴以及我們的直接關係，提供我們自己的預先配置產品以及供合作夥伴建立自己的解決方案的平台。Aware 始終致力於成為一家與生物辨識簡化相關的公司。我們隨時準備好透過生物辨識技術改善客戶的業務成果。我們現在將進入電話會議的問答部分。馬特，請提供適當的說明。

Thank you, Bob. As a reminder, you can submit a question using the built-in ask-a-question feature in the webcast player. Please hold while we populate the questions.

謝謝你，鮑伯。提醒一下，您可以使用網路廣播播放器中的內建提問功能提交問題。請稍候，我們正在回答問題。

Our first question, Craig, you highlighted increased demand for wares biometric technologies, specifically Iris fingerprint and facial recognition. Could you elaborate on the key factors driving this growth across these different modalities? Are there particular industries, applications or market trends fueling this demand?

我們的第一個問題，克雷格，您強調了對商品生物辨識技術的需求不斷增加，特別是虹膜指紋和臉部辨識。您能否詳細說明推動這些不同模式成長的關鍵因素？是否有特定的產業、應用或市場趨勢推動了這種需求？

Great questions, Matt. Yes, the biometric systems market, we always continue to experience rapid expansion with projections today indicating at least 14% growth over the next five years, reaching approximately $83 billion.

很好的問題，馬特。是的，生物辨識系統市場始終持續快速擴張，目前預測未來五年至少成長 14%，達到約 830 億美元。

This growth is particularly evident in the US federal government sector, where we've also seen increased adoption of iris recognition technology. I just spent some time at the US biometric forum last month, and it's very clear that multimodal biometrics including Iris as well as concerns about racial bias were widely reviewed and discussed. These are a few of the markets driving and fueling this growth.

這種成長在美國聯邦政府部門尤其明顯，我們也看到虹膜辨識技術的採用增加。上個月我剛在美國生物辨識論壇上待了一段時間，很明顯，包括虹膜在內的多模態生物辨識技術以及對種族偏見的擔憂得到了廣泛的審查和討論。這些是推動和推動這種成長的一些市場。

We're seeing increasing demand for consumer convenience, coupled with a growing need for business efficiencies. There's also a wider acceptance of adoption of biometrics by consumers. New government and commercial compliance requirements and regulations, both domestically and internationally are further propelling this market.

我們看到消費者對便利性的需求不斷增長，同時對業務效率的需求也不斷增長。消費者也更廣泛地接受採用生物辨識技術。國內和國際新的政府和商業合規要求和法規正在進一步推動這個市場。

Additionally, rising occurrences of identity fraud as increasing sophistication, i.e. defects, along with the escalating frequency of internal and external data breaches, are driving demand for robust biometric solutions. These drivers are consistent across all our target industry verticals and align closely with our go-to market position strategy. This is positioning Aware to capitalize on these market trends effectively.

此外，隨著複雜性（即缺陷）的增加，身分詐欺的發生率不斷上升，加上內部和外部資料外洩的頻率不斷上升，正在推動對強大的生物辨識解決方案的需求。這些驅動因素在我們所有的目標垂直產業中都是一致的，並且與我們的市場定位策略緊密結合。這使得 Aware 能夠有效地利用這些市場趨勢。

Heidi, as the Chief Product Officer. Can you talk through the initial your initial initiatives to drive awareness and market penetration in the commercial space?

海蒂，擔任首席產品長。您能談談您為提高商業領域的知名度和市場滲透率而採取的最初舉措嗎？

Yeah, absolutely. And I think most importantly, my first primary initiation was executing. Honestly, the thing I love most about my job. I'm spending time with the products and the teams that are building and selling and supporting them on. So Since joining, I've spent time testing the solution and reviewing the capabilities and the work that the team has done historically, but specifically within the last year year and a half.

是的，絕對是。我認為最重要的是，我的第一個主要啟動就是執行。老實說，我最喜歡我的工作。我花時間研究產品以及建立、銷售和支援這些產品的團隊。因此，自從加入以來，我花了時間測試解決方案並審查團隊歷史上（特別是在過去一年半內）所做的功能和工作。

And this is important because it's the foundation for my efforts. And I really need to understand the breadth of what we have today, what we have and think about how we apply and translate that into the spaces that we're focused on.

這很重要，因為它是我努力的基礎。我真的需要了解我們今天所擁有的廣度，我們所擁有的，並思考如何將其應用並轉化為我們關注的領域。

So since joining doing this has provided me with an opportunity to really conceptualize and strategize and document the various ways. Our portfolio applies to the different market areas we want to penetrate in the commercial space.

因此，自從加入以來，這為我提供了一個真正概念化、制定策略並記錄各種方法的機會。我們的產品組合適用於我們想要滲透到商業領域的不同市場領域。

So moving that forward now together with the marketing and sales leadership folks and we're now incorporating all this detail into our presentation of ourselves to the commercial market and the execution of our sales strategy. My opinion, my insights is that our solutions are really feature rich, and there's a lot of opportunities to attract and delight customers and our strategic focus areas.

因此，現在與行銷和銷售領導人員一起向前推進，我們現在將所有這些細節納入我們向商業市場的展示和銷售策略的執行中。我的觀點和見解是，我們的解決方案功能確實豐富，並且有很多機會來吸引和取悅客戶以及我們的策略重點領域。

And we're also taking care of through this approach to really work through a framework of repeatability and adding leverage. And that affords us the ability to tie, learn and take that corrective action as we work together to drive our market penetration.

我們也透過這種方法來真正透過可重複性和增加槓桿作用的框架來工作。這使我們能夠在共同努力推動市場滲透的過程中結合、學習並採取糾正措施。

And I truly believe with my experience in the commercial identity market, I'm going to enable the team to execute at a faster rate while reducing the amount of time needed to bring new product enhancements to the market.

我堅信，憑藉我在商業身分市場的經驗，我將使團隊能夠以更快的速度執行任務，同時減少將新產品增強功能推向市場所需的時間。

Craig, you mentioned removing nonperforming partners from your partner program this quarter. Could you elaborate on this process? Additionally, what, in fact, you expect this partner program optimization to have on your business going forward?

克雷格，您提到本季將表現不佳的合作夥伴從合作夥伴計畫中剔除。能詳細說明一下這個過程嗎？此外，實際上，您期望此合作夥伴規劃優化對您的業務未來有何影響？

Certainly, we don't find performing versus nonperforming partners using multiple metrics are key indicators of a successful partner. This could include resources assigned to the biometrics on the partner side, overall business focus, marketing resources and usually the actually utilization of our resources for enablement and co-marketing.

當然，我們並不認為使用多個指標的績效夥伴與績效不佳的合作夥伴是成功合作夥伴的關鍵指標。這可能包括分配給合作夥伴生物識別技術的資源、整體業務重點、行銷資源以及通常我們的資源用於支援和聯合行銷的實際利用情況。

We also assess the partners, engagement and joint sales efforts and their consistency in bringing new opportunities as well as the revenue growth through the partnership. Expanding our recurring revenue market share relies heavily on an active, engaged and enabled partnered partner ecosystem.

我們還評估合作夥伴、參與度和聯合銷售努力及其在帶來新機會方面的一致性以及透過合作夥伴關係實現的收入成長。擴大我們的經常性收入市場份額在很大程度上依賴活躍、參與和支持的合作夥伴生態系統。

We want partners who actively contribute to our mutual success, not just carrier name. We're a lean organization and we want to be effective, efficient and focus our resources on partners that are also invested in driving the revenue needle.

我們希望合作夥伴能夠為我們的共同成功做出積極貢獻，而不僅僅是營運商的名字。我們是一個精幹的組織，我們希望變得有效、高效，並將我們的資源集中在也投資於推動收入成長的合作夥伴上。

We regularly review these metrics to identify value, adding partners those consistently falling short, maybe consider non-performing. This ongoing evaluation helps us optimize our program focus resources on relationships that drive results for both parties by mine by maintaining high partnership standards with creating a more efficient ecosystem that will support our long-term growth objectives.

我們定期檢視這些指標以識別價值，並加入那些持續達不到要求、可能被視為表現不佳的合作夥伴。這種持續的評估有助於我們優化我們的計劃，將資源集中在關係上，透過維持高合作夥伴標準，創建一個支持我們長期成長目標的更有效率的生態系統，為雙方帶來成果。

Bob, could you break down the key factors behind the 54% year-over-year reduction in Q2 operating loss, which areas improved most was this driven more by revenue growth or expense management. Are these improvements sustainable at how to how to be aligned with the overall financial strategy?

鮑勃，您能否詳細分析第二季度營運虧損年減 54% 背後的關鍵因素，其中改善最多的領域更多是由收入成長或費用管理推動的。這些改進在如何與整體財務策略保持一致方面是否可持續？

A 54% year-over-year reduction in operating loss was a combination of revenue growth and cost optimization initiatives that we've implemented and executed over the past several quarters that started back in Q3 of 2023.

營業虧損年減了 54%，這是我們從 2023 年第三季開始的過去幾季實施和執行的營收成長和成本優化措施的結合。

As we anticipated in our previous earnings calls, Q2 Q2 has indeed seen more substantial benefits from these efforts. So our approach has been twofold. As I mentioned before, cost management, we've been diligent and deliberate with our spending carefully evaluating each expense to ensure it aligns with our strategic objectives.

正如我們在先前的財報電話會議中所預期的那樣，第二季確實從這些努力中看到了更實質的好處。所以我們的方法是雙重的。正如我之前提到的成本管理，我們一直勤勉、審慎地支出，仔細評估每項支出，以確保其符合我們的策略目標。

This enables us to leverage our product offerings that are most in demand on the revenue growth side. Simultaneously, we've focused on driving increased top line and recurring revenue growth in this through term and subscription contracts, which is also positively impacted our bottom line.

這使我們能夠利用收入成長方面最需要的產品。同時，我們致力於透過定期合約和訂閱合約來推動收入成長和經常性收入成長，這也對我們的利潤產生了積極影響。

It also overall growth with profitability remains a top priority for us, and we're committed to maintaining this balance between the prudent cost management and the strategic investments for growth. So overall, this planned reduction in operating loss aligns with our overall strategy of achieving sustainable profitability while still investing in areas that drive long-term growth.

整體成長和獲利能力仍然是我們的首要任務，我們致力於在審慎的成本管理和成長策略投資之間保持這種平衡。因此，總體而言，計劃減少營運損失符合我們實現可持續獲利能力的整體策略，同時仍投資於推動長期成長的領域。

Thanks, Bob. Craig, we've got a multipart question here. Can you update us on our progress in the gaming sector, including the reception at the recent I. gaming event and any new partnerships, what unique challenges or opportunities are you seeing for our biometric solutions and gaming Also are there other sectors showing increasing demand for our technologies, we are repositioning ourselves to capitalize on these opportunities?

謝謝，鮑伯。克雷格，我們有一個由多個部分組成的問題。您能否向我們介紹我們在遊戲領域的最新進展，包括最近的I. 遊戲活動的接待情況和任何新的合作夥伴關係，您認為我們的生物識別解決方案和遊戲有哪些獨特的挑戰或機遇？ 還有其他領域對生物辨識解決方案的需求不斷增長嗎？

Yeah, we're super excited about the gaming industry and what we've been able to do quite honestly, in a short amount of time in this industry. We've secured some key partnerships that are really driving traction with new customers on this front.

是的，我們對遊戲產業以及我們在短時間內在這個產業中所能夠做的事情感到非常興奮。我們已經建立了一些重要的合作關係，這些合作夥伴關係確實在這方面吸引了新客戶。

We're still learning the market a bit as well as the regulation nuances. There is a great need for a complete biometric based KYC solution that is definite. It needs to be easily implemented and supported. So We coupled this with our recent productized integration with new commerce, this has given us some great momentum in the marketplace.

我們仍在了解市場以及監管的細微差別。非常需要一個完整的基於生物辨識的明確的 KYC 解決方案。它需要易於實施和支援。因此，我們將這一點與最近與新商業的產品化整合相結合，這為我們在市場上帶來了巨大的動力。

Another one that we're really excited about and starting to see some traction is the access control market. This is a massive market that spans across both physical and online access control and specifically through our partner network biometric solutions for access control issues are becoming more of a consistent request for especially seeing these use cases arise in the Middle East and our Latine markets.

我們真正感到興奮並開始看到一些吸引力的另一個市場是訪問控制市場。這是一個涵蓋實體和線上存取控制的龐大市場，特別是透過我們的合作夥伴網路生物辨識解決方案來解決存取控制問題，尤其是在中東和拉丁美洲市場出現這些用例時，這已變得越來越一致的要求。

Bob, do you have an updated target timeframe for reaching a sustainable cash flow positive operation?

鮑勃，您是否有實現可持續現金流正營運的更新目標時間表？

Yeah, I'll take that. As you know, we've made significant progress relative to leveraging our existing technology, which includes our software stack across multiple solutions in our product suite, and we're maximizing our investment.

是的，我會接受的。如您所知，我們在利用現有技術方面取得了重大進展，其中包括我們產品套件中跨多個解決方案的軟體堆疊，並且我們正在最大化我們的投資。

So this has allowed us, as I just said a moment ago to reduce our operating expenses by 8% in the first half of 2024 compared to 2023, while also growing revenue 17% in the same period. So we feel that we're well positioned to continue to grow our top line revenue, and that should result in sustainable positive cash flow in the near future.

因此，正如我剛才所說，這使我們能夠在 2024 年上半年比 2023 年減少 8% 的營運費用，同時同期收入也成長 17%。因此，我們認為我們有能力繼續增加我們的營收，這應該會在不久的將來帶來可持續的正現金流。

Thanks, Bob. Our next question, could you provide an update on the software one partnership traditionally what differentiates aware on the AWS marketplace?

謝謝，鮑伯。我們的下一個問題是，您能否提供有關軟體合作夥伴關係的最新信息，傳統上，AWS 市場上的差異化意識是什麼？

Sure. We continue to work with software one, and they've helped us considerably, especially especially in the Brazilian market there. I find it a fantastic thing, technology partner to us and continue to give us great guidance on the AWS Marketplace side, we needed to invest in additional development to really satisfy some of the specific requirements that have come up in the process of note, we made a decision as a business to focus these resources in areas that have a direct line to revenue while working through the specific requirements in parallel.

當然。我們繼續與第一軟體合作，他們給了我們很大幫助，尤其是在巴西市場。我發現這是一件很棒的事情，我們的技術合作夥伴，並繼續在 AWS Marketplace 方面為我們提供了很好的指導，我們需要投資額外的開發才能真正滿足過程中出現的一些特定要求，我們作為一個企業，決定將這些資源集中在與收入直接相關的領域，同時滿足特定要求。

This building as well as the additional momentum that we're gaining in some of the markets that are targeted by AWS coupling these two really makes us feel really good about our differentiation when we do enter into the marketplace. The AWS Marketplace is still a part of our strategy but based on what we're seeing in the markets currently behind buying behaviors and cycles, where you're really taking advantage of other partner driven opportunities in the short term.

這種建設以及我們在 AWS 結合這兩者的一些目標市場中獲得的額外動力確實讓我們在進入市場時對自己的差異化感到非常滿意。AWS Marketplace 仍然是我們策略的一部分，但根據我們目前在市場中看到的購買行為和週期背後的情況，您可以在短期內真正利用其他合作夥伴驅動的機會。

Next question throughout the years, $0.4 million license expansion in Europe, what kind of user organization is there?

下一個問題是，多年來，在歐洲進行了 40 萬美元的許可證擴展，那裡有什麼樣的用戶組織？

Sure. I can't go into the specific one, but it is a government entity in Europe, one that we have been working with and also alongside a partner. So this is this touches both our government sector as well as our partnership ecosystem and anything is expansion of additional licenses. So what we're seeing is more and more users leveraging our platform and our tools in Europe.

當然。我無法透露具體的一個，但它是歐洲的一個政府實體，我們一直在與該實體合作，同時也是一個合作夥伴。因此，這既涉及我們的政府部門，也涉及我們的合作夥伴生態系統，任何事情都涉及額外許可證的擴展。因此，我們看到越來越多的用戶在歐洲利用我們的平台和工具。

Thanks, Craig. Our next question, when you say commercial identity Are you referencing KYC compliance and checkout identity products?

謝謝，克雷格。我們的下一個問題是，當您提到商業身分時，您是否指的是 KYC 合規性和結帳身分產品？

I think that one's for me, Heidi. Yes, I am. And honestly, if you've been in this space as long as I was over 12 years. You know that I think a lot of identity began as KYC compliance. But as we have traversed into completely being densified and everything is a digital experience that when you talk about being an identity, it's really covering both.

我想那是給我的，海蒂。我是。老實說，如果你在這個領域工作的時間和我一樣長，已經超過 12 年了。你知道，我認為很多身分認證都是從 KYC 合規性開始的。但隨著我們已經進入完全緻密化，一切都是數位體驗，當你談論身份時，它實際上涵蓋了兩者。

So I was there from that transition where we started, you know, doing KYC primarily for compliance in a digital environment. To the state we're in now where anytime there's data collection or collection of biometrics, somebody's verifying something about you on your phone.So I've seen it all

因此，我從我們開始進行 KYC 的過渡開始，主要是為了數位環境中的合規性。就我們現在所處的狀態而言，只要有資料收集或生物辨識資訊收集，就會有人在您的手機上驗證有關您的資訊。

At this time. This concludes our question and answer session. Your question wasn't answered, please e-mail Aware's IR team at AWR. Is it gateway dash GRP.com. I'd now like to turn the call back over to Bob for closing remarks.

此時。我們的問答環節到此結束。您的問題未得到解答，請向 AWR 的 Aware IR 團隊發送電子郵件。是網關破折號 GRP.com 嗎？我現在想將電話轉回給鮑勃，讓他作結束語。

Yes. I just wanted to thank all of you for joining us today. And as always, I'd like to express my sincere appreciation to our employees, partners, shareholders for their unwavering commitment and support. For those seeking more information, I encourage you to review our investor presentation on our corporate website that provides additional details about our strategic initiatives, and we look forward to updating you further on our progress during our next webcast. Matt, back over to you.

是的。我只是想感謝大家今天加入我們。像往常一樣，我要向我們的員工、合作夥伴、股東表達衷心的感謝，感謝他們堅定不移的承諾和支持。對於那些尋求更多信息的人，我鼓勵您查看我們公司網站上的投資者演示文稿，其中提供了有關我們戰略計劃的更多詳細信息，我們期待在下一次網絡廣播中進一步向您介紹我們的進展情況。馬特，回到你身邊。

Thanks Bob. I'd like to remind everyone that a recording of today's call will be available for replay via link in the Investor section of the company's website. Thank you for joining us for today for our second quarter 2024 conference call. You may now disconnect.

謝謝鮑勃。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。感謝您今天參加我們的 2024 年第二季電話會議。您現在可以斷開連線。