Aware reported lower revenue but narrower losses for the third quarter, as reduced expenses helped offset weaker sales. The biometric identity software company also reported growth in recurring revenue and new customer activity in government and commercial markets, while saying more consistent revenue remains a priority.
The results reflect cost cuts implemented earlier in 2026, which Aware expects to produce about $4 million in annualized savings. For the first nine months, however, net loss and adjusted EBITDA loss widened from a year earlier.
Third-quarter results
– Revenue was $4.4 million, down from $5.1 million in the same quarter last year.
– Recurring revenue rose to about $4.0 million from about $3.6 million. It includes subscription, maintenance and recurring usage-based revenue, and can vary with contract terms, renewals and customer activity.
– Operating expenses fell to $5.4 million from $6.4 million. The quarter was the first full quarter to reflect the cost-reduction measures introduced earlier in the year.
– Operating loss narrowed to about $0.9 million from about $1.3 million. Net loss was $0.8 million, or $0.04 per diluted share, versus $1.1 million, or $0.05 per share, a year ago.
– Adjusted EBITDA loss, a non-GAAP measure, was $0.5 million, compared with $0.8 million.
Business developments
– A government agency selected Aware to deploy Intelligent Liveness capabilities from its Awareness Platform. Aware described the engagement as a new step toward serving high-assurance identity environments.
– The company said it has seen increased solicitation activity for biometric identity programs since funding was restored for most of the Department of Homeland Security. It cautioned that federal procurement timing remains difficult to predict.
– Aware established a commercial relationship with an Adobe Acrobat Sign distributor, with new customer activity in Latin America. The arrangement brings biometric security capabilities to customers using Adobe Acrobat Sign.
– Management said interest in the Awareness Platform and its Intelligent Liveness module has strengthened the sales pipeline, as commercial customers seek to address AI-enabled fraud and manage their own biometric systems.
First nine months of 2026
– Revenue was $11.1 million, down from $12.6 million in the prior-year period. Recurring revenue increased to about $9.6 million from $9.2 million.
– Operating expenses totaled $18.4 million, up from $17.7 million. The comparison includes about $0.7 million in one-time severance costs, primarily in the first quarter, and higher compensation tied to hires made in 2025; spending cuts partly offset those increases.
– Net loss widened to $6.8 million, or $0.31 per diluted share, from $4.4 million, or $0.21 per share. Adjusted EBITDA loss was $6.1 million, compared with $3.8 million.
– Aware ended September with about $15.4 million in cash, cash equivalents and marketable securities, and no debt.
What changes for investors
The quarter shows progress on expense control and recurring revenue, alongside lower overall sales. The new government engagement and commercial relationship add to Aware’s customer activity, but management says the key task is converting opportunities into more consistent revenue while keeping spending disciplined.