Aware Reports Third Quarter Financial Results
Recurring revenue increased and quarterly losses narrowed, but nine-month revenue and net results remained below prior-year levels.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Rhea-AI Summary
Aware (NASDAQ: AWRE) reported third-quarter 2026 revenue of $4.4 million, down from the same quarter a year earlier. Revenue was $5.1 million in the prior-year quarter, while recurring revenue rose to approximately $4.0 million from approximately $3.6 million. Net loss narrowed to $0.8 million, or $0.04 per diluted share, from $1.1 million, or $0.05 per diluted share.
Quarterly operating expenses fell to $5.4 million from $6.4 million. Aware expects its cost-reduction actions to generate approximately $4.0 million in annualized savings. A government agency selected its Intelligent Liveness capabilities, and it established a relationship with Adobe Acrobat Sign's distributor. Nine-month revenue declined to $11.1 million from $12.6 million, and net loss widened to $6.8 million from $4.4 million. Aware ended September with approximately $15.4 million in cash, cash equivalents and marketable securities and no debt.
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Hollow bars mark forward-looking points. How the balance works
Positive
- Major point. Forward-looking: it has not happened yet and may not happen.Cost-reduction actions are expected to generate approximately $4.0 million in annualized savings.
- Moderate pointThird-quarter recurring revenue rose to approximately $4.0 million from approximately $3.6 million a year earlier.
- Moderate pointThird-quarter operating expenses fell to $5.4 million from $6.4 million a year earlier.
- Moderate pointThird-quarter net loss narrowed to $0.8 million, or $0.04 per diluted share, from $1.1 million, or $0.05.
- Moderate pointQuarter-end liquidity totaled approximately $15.4 million in cash, cash equivalents and marketable securities, with no debt.
6 minor points
- Minor pointThird-quarter operating loss narrowed to $940,000 from $1.295 million a year earlier.
- Minor pointThird-quarter adjusted EBITDA loss, a non-GAAP measure, narrowed to $0.5 million from $0.8 million a year earlier.
- Minor point. Forward-looking: it has not happened yet and may not happen.Government agency customer selected Intelligent Liveness capabilities from the Awareness Platform for deployment.
- Minor pointNew relationship with Adobe Acrobat Sign's distributor included new customer activity in Latin America.
- Minor pointNine-month recurring revenue increased to approximately $9.6 million from approximately $9.2 million a year earlier.
- Minor pointNine-month services and other revenue rose to $964,000 from $918,000 a year earlier.
Negative
- Moderate pointThird-quarter revenue declined to $4.4 million from $5.1 million a year earlier.
- Moderate pointNine-month net loss widened to $6.8 million, or $0.31 per diluted share, from $4.4 million, or $0.21.
- Moderate pointCash and cash equivalents fell to $2.428 million at September 30 from $7.269 million at December 31, 2025.
- Minor pointNine-month revenue declined to $11.1 million from $12.6 million a year earlier.
- Minor pointNine-month operating loss widened to $7.330 million from $5.107 million a year earlier.
7 minor points
- Minor pointNine-month adjusted EBITDA loss widened to $6.1 million from $3.8 million a year earlier.
- Minor pointNine-month operating expenses increased to $18.4 million from $17.7 million, including approximately $0.7 million in one-time severance.
- Minor pointMarketable securities fell to $12.947 million at September 30 from $15.026 million at December 31, 2025.
- Minor pointSoftware license revenue fell to $1.938 million quarterly and $3.923 million year-to-date, from $2.525 million and $5.261 million.
- Minor pointSoftware maintenance revenue fell to $2.105 million quarterly and $6.171 million year-to-date, from $2.199 million and $6.451 million.
- Minor pointThird-quarter services and other revenue fell to $374,000 from $405,000 a year earlier.
- Minor pointFederal procurement cycles remain difficult to predict, Aware said.
News Explained
A government agency selected Aware to deploy Intelligent Liveness, but management describes converting the engagement into an active customer as progress, placing the disclosed state at selection rather than active-customer status.
Details
Market move: AWRE +7.00% vs previous close. 3Q26 earnings report
On Oct 28, the day this news came out, the latest delayed price for AWRE is 7.00% above the previous close. Our momentum scanner has recorded 8 alerts for this stock so far that day. The latest delayed price is $1.00. Relative volume is elevated at 2.7x the average.
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Key Figures
- Total revenue
- $4,417 thousand vs. $5,129 thousand
- Third quarter 2026 vs. third quarter 2025
- Operating expenses
- $5,357 thousand vs. $6,424 thousand
- Third quarter 2026 vs. third quarter 2025
- Net loss
- $791 thousand vs. $1,053 thousand
- Third quarter 2026 vs. third quarter 2025
- Net loss per diluted share
- $0.04 vs. $0.05
- Third quarter 2026 vs. third quarter 2025
- Adjusted EBITDA loss
- $548 thousand vs. $810 thousand
- Third quarter 2026 vs. third quarter 2025
Previous Earnings Reports
-
Q2 revenue declined year over year and net loss widened; the reported share reaction was positive.
-
Q3 2025 revenue grew year over year and adjusted EBITDA loss improved; the reported share reaction was negative.
24h Move is the share-price change in the day after each event; other market factors may also have contributed.
Key Terms
adjusted ebitda financial
non-gaap financial
marketable securities financial
forward-looking statements regulatory
AI-generated analysis. How Rhea-AI works. Not financial advice.
BURLINGTON, Mass., Oct. 28, 2026 (GLOBE NEWSWIRE) -- Aware, Inc. (NASDAQ: AWRE), a global leader in biometric orchestration, today reported financial results for the third quarter ended September 30, 2026.
Third Quarter 2026 Operational Highlights
- Selected by a government agency customer to deploy Intelligent Liveness capabilities from the Awareness Platform, marking an important step forward for the platform’s use in high-assurance identity environments.
- Established a new commercial relationship with Adobe Acrobat Sign's distributor, with new customer activity in Latin America.
- Realized the impact of cost-reduction actions implemented earlier in 2026, actions expected to generate approximately
$4.0 million in annualized savings, contributing to a reduction in operating loss compared with the prior-year period.
Management Commentary
“Third-quarter revenue was
“During the quarter, Aware was selected by a government agency customer to deploy Intelligent Liveness capabilities from the Awareness Platform. This represents a new government agency engagement and gives us an opportunity to demonstrate how biometric orchestration and Intelligent Liveness can support high-assurance identity environments,” Amlani said. “Since funding for most of the Department of Homeland Security was restored, we have seen increased solicitation activity for the biometric identity programs we pursue, as agencies look to allocate funding to improve national security, modernize legacy biometric and identity systems, and improve user experiences. While federal procurement cycles remain difficult to predict, converting our new federal government engagement into an active customer represents meaningful progress.”
Aware also continued to expand its commercial business, including a new relationship with Adobe Acrobat Sign's distributor, delivering biometric security for customers using Adobe Acrobat Sign, with new customer activity in Latin America. The release of the Awareness Platform and investments into its Intelligent Liveness module have reinvigorated the pipeline as commercial customers look to expand their use of biometrics to defend against AI-enabled fraud attacks. Specifically, customers increasingly seek to control their own biometric systems rather than depend on a single vendor.
“We are encouraged by the progress we are seeing across both customer expansion and recurring revenue,” Amlani said. “While recurring revenue can fluctuate from quarter to quarter, increasing the recurring component of the business over time should help create a more durable revenue foundation.”
Operating expenses dropped to
“Reducing expenses alone is not the objective,” Amlani added. “We need to pair a more efficient cost structure with stronger and more consistent revenue performance. Our strategy remains centered on the Awareness Platform and its biometric orchestration capabilities, helping organizations more easily deploy, manage and modernize biometric identity systems.”
“Our focus as we close 2026 and enter 2027 is execution,” Amlani concluded. “We need to expand the customers we already have, convert the opportunities we are pursuing, improve the quality and durability of our revenue, and remain disciplined about where we invest.”
Third Quarter 2026 Financial Results
Revenue for the quarter was
Recurring revenue was approximately
Operating expenses for the quarter were
Operating loss for the quarter was approximately
Net loss for the quarter was
Adjusted EBITDA (a non-GAAP metric reconciled below) loss was
Nine-Month 2026 Financial Results
Revenue for the nine months ended September 30, 2026, was
Recurring revenue was approximately
Operating expenses for the nine months ended September 30, 2026, were
Net loss for the nine-month period was
Adjusted EBITDA loss was
Aware ended the third quarter with approximately
Webcast
Aware management will host a webcast today, October 28, 2026, at 5:00 p.m. Eastern time to discuss these results and provide an update on business conditions. A question-and-answer session will follow management’s prepared remarks.
Date: Wednesday, October 28, 2026
Time: 5:00 p.m. Eastern time (2:00 p.m. Pacific time)
Webcast: Register Here
The presentation will be made available for replay in the investor relations section of the Company’s website. The audio recording will be available for approximately 90 days following the live event.
About Aware
Aware, Inc. (NASDAQ: AWRE) is a proven global leader in biometric orchestration and identity solutions. Its Awareness Platform transforms biometric data into actionable intelligence, empowering organizations to verify identities and prevent fraud with speed, accuracy, and confidence. Designed for mission-critical enterprise environments, the platform delivers intelligent, scalable architecture, real-time insights, and reliable security—ensuring precise identification when every millisecond matters. Aware is headquartered in Burlington, Massachusetts. To learn more, visit our website or follow us on LinkedIn and X.
Safe Harbor Warning
Portions of this release contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not statements of historical fact rather they reflect Aware’s current expectations concerning future events and are subject to risks and uncertainties, such as the effectiveness of Aware’s business strategy, pipeline and customer conversion, government funding and procurement, costs savings, operating expenses, revenue mix, financial outlook and the growth of the biometrics markets, including the possibility that government selections, commercial relationships and sales opportunities may not result in anticipated deployments or revenue, and that expected cost savings may not be fully realized or sustained. Aware wishes to caution you that there are factors that could cause actual results to differ materially from the results indicated by such statements. Aware undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. The reader is cautioned not to unduly rely on forward-looking statements when evaluating the information presented in this release.
Risk factors related to our business include, but are not limited to: i) the changes we are implementing in our business to drive growth in our business may not be successful on the timeline we expect, or at all; ii) our operating results may fluctuate significantly and are difficult to predict; iii) we derive a significant portion of our revenue from government customers, and our business may be adversely affected by changes in the contracting or fiscal policies of those governmental entities; iv) a significant commercial market for biometrics technology may not develop, and if it does, we may not be successful in that market; v) we derive a significant portion of our revenue from third party channel partners; vi) the biometrics market may not experience significant growth or our products may not achieve broad acceptance; vii) we face intense competition from other biometrics solution providers; viii) our business is subject to rapid technological change; ix) our software products may have errors, defects or bugs which could harm our business; x) our business may be adversely affected by our use of open source software; xi) we rely on third party software to develop and provide our solutions and significant defects in third party software could harm our business; xii) part of our future business is dependent on market demand for, and acceptance of, the cloud-based model for the use of software; xiii) our operational systems and networks and products may be subject to an increasing risk of continually evolving cybersecurity or other technological risks which could result in the disclosure of company or customer confidential information, damage to our reputation, additional costs, regulatory penalties and financial losses; xiv) our intellectual property is subject to limited protection; xv) we may be sued by third parties for alleged infringement of their proprietary rights; xvi) we must attract and retain key personnel; xvii) our business may be affected by government regulations, government cost cutting initiatives and adverse economic conditions; xviii) we may make acquisitions that could adversely affect our results; xix) we may have additional tax liabilities.
We refer you to the documents Aware files from time to time with the Securities and Exchange Commission, specifically the section titled Risk Factors in our annual report on Form 10-K for the fiscal year ended December 31, 2025 and other reports and filings made with the Securities and Exchange Commission.
| AWARE, INC. CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (In thousands, except per share data) (unaudited) | |||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||
| Revenue: | |||||||||||||||
| Software licenses | $ | 1,938 | $ | 2,525 | $ | 3,923 | $ | 5,261 | |||||||
| Software maintenance | 2,105 | 2,199 | 6,171 | 6,451 | |||||||||||
| Services and other | 374 | 405 | 964 | 918 | |||||||||||
| Total revenue | 4,417 | 5,129 | 11,058 | 12,630 | |||||||||||
| Costs and expenses: | |||||||||||||||
| Cost of revenue | 439 | 419 | 1,294 | 858 | |||||||||||
| Research and development | 2,296 | 2,131 | 8,051 | 6,013 | |||||||||||
| Selling and marketing | 1,148 | 2,103 | 4,357 | 5,730 | |||||||||||
| General and administrative | 1,474 | 1,771 | 4,686 | 5,136 | |||||||||||
| Total costs and expenses | 5,357 | 6,424 | 18,388 | 17,737 | |||||||||||
| Operating loss | (940 | ) | (1,295 | ) | (7,330 | ) | (5,107 | ) | |||||||
| Interest income | 155 | 247 | 531 | 726 | |||||||||||
| Loss before provision for income taxes | (785 | ) | (1,048 | ) | (6,799 | ) | (4,381 | ) | |||||||
| Provision for income taxes | 6 | 5 | 15 | 39 | |||||||||||
| Net loss | $ | (791 | ) | $ | (1,053 | ) | $ | (6,814 | ) | $ | (4,420 | ) | |||
| Other comprehensive loss income, net of tax: | |||||||||||||||
| Unrealized loss on available-for-sale securities | (60 | ) | (110 | ) | (168 | ) | (63 | ) | |||||||
| Comprehensive loss | $ | (851 | ) | $ | (1,163 | ) | $ | (6,982 | ) | $ | (4,483 | ) | |||
| Net loss per share – basic | $ | (0.04 | ) | $ | (0.05 | ) | $ | (0.31 | ) | $ | (0.21 | ) | |||
| Net loss per share – diluted | $ | (0.04 | ) | $ | (0.05 | ) | $ | (0.31 | ) | $ | (0.21 | ) | |||
| Weighted-average shares – basic | 21,726 | 21,202 | 21,677 | 21,188 | |||||||||||
| Weighted-average shares – diluted | 21,726 | 21,202 | 21,677 | 21,188 | |||||||||||
Prior-period amounts have been reclassified to conform to the current period presentation.
| AWARE, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) (unaudited) | |||||||
| September 30, 2026 | December 31, 2025 | ||||||
| ASSETS | |||||||
| Cash and cash equivalents | $ | 2,428 | $ | 7,269 | |||
| Marketable securities | 12,947 | 15,026 | |||||
| Accounts and unbilled receivables, net | 5,866 | 4,358 | |||||
| Property and equipment, net | 326 | 477 | |||||
| Goodwill and intangible assets, net | 4,422 | 4,689 | |||||
| Right of use assets | 3,380 | 3,642 | |||||
| All other assets, net | 1,407 | 1,734 | |||||
| Total assets | $ | 30,776 | $ | 37,195 | |||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
| Accounts payable and accrued expenses | $ | 1,996 | $ | 1,975 | |||
| Deferred revenue | 5,006 | 5,115 | |||||
| Operating lease liability | 3,729 | 3,968 | |||||
| Total stockholders’ equity | 20,045 | 26,137 | |||||
| Total liabilities and stockholders’ equity | $ | 30,776 | $ | 37,195 | |||
Non-GAAP Measures
We define adjusted EBITDA as U.S. GAAP net loss plus depreciation of fixed assets and amortization of intangible assets, stock-based compensation expenses, interest income, and income tax provision. We discuss adjusted EBITDA in our quarterly earnings releases and certain other communications, as we believe adjusted EBITDA is an important measure. We use adjusted EBITDA in internal forecasts and models when establishing internal operating budgets, supplementing the financial results and forecasts reported to our Board of Directors, and evaluating short-term and long-term operating trends in our operations. We believe that the adjusted EBITDA financial measure assists in providing an enhanced understanding of our underlying operational measures to manage the business, to evaluate performance compared to prior periods and the marketplace, and to establish operational goals. We believe that the adjusted EBITDA adjustments are useful to investors because they allow investors to evaluate the effectiveness of the methodology and information used by management in our financial and operational decision-making.
We define recurring revenue as the portion of Aware revenue that is based on a term arrangement and is likely to continue in the future, such as annual maintenance or subscription contracts. We use recurring revenue as a metric to communicate the portion of our revenue that has greater stability and predictability. We believe that recurring revenue assists in providing an enhanced understanding of the effectiveness of our efforts to transition to a subscription-based business model.
Adjusted EBITDA and recurring revenue are non-GAAP financial measures and should not be considered in isolation or as a substitute for financial information provided in accordance with U.S. GAAP. These non-GAAP financial measures may not be computed in the same manner as similarly titled measures used by other companies. We expect to continue to incur expenses similar to the financial adjustments described above in arriving at adjusted EBITDA and investors should not infer from our presentation of this non-GAAP financial measure that these costs are unusual, infrequent or non-recurring. The following table includes the reconciliations of our U.S. GAAP net loss, the most directly comparable U.S. GAAP financial measure, to our adjusted EBITDA for the three and nine months ended September 30, 2026 and 2025 and our U.S. GAAP revenue, the most directly comparable U.S. GAAP financial measure, to our recurring revenue for the three and nine months ended September 30, 2026 and 2025.
| AWARE, INC. Reconciliation of GAAP Net loss to Adjusted EBITDA (In thousands) (unaudited) | |||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||
| September 30, | September 30, | September 30, | September 30, | ||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||
| Net loss | $ | (791 | ) | $ | (1,053 | ) | $ | (6,814 | ) | $ | (4,420 | ) | |||
| Depreciation and amortization | 139 | 143 | 418 | 431 | |||||||||||
| Stock based compensation | 253 | 342 | 843 | 904 | |||||||||||
| Interest income | (155 | ) | (247 | ) | (531 | ) | (726 | ) | |||||||
| Provision for income taxes | 6 | 5 | 15 | 39 | |||||||||||
| Adjusted EBITDA loss | $ | (548 | ) | $ | (810 | ) | $ | (6,069 | ) | $ | (3,772 | ) | |||
| AWARE, INC. Revenue Breakout (In thousands) (unaudited) | |||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||
| September 30, | September 30, | September 30, | September 30, | ||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||
| Recurring revenue: | |||||||||||||||
| Software subscriptions | $ | 1,777 | $ | 1,182 | $ | 3,051 | $ | 2,458 | |||||||
| Software maintenance | 2,105 | 2,199 | 6,171 | 6,451 | |||||||||||
| Services and other | 125 | 174 | 403 | 272 | |||||||||||
| Total recurring revenue | 4,007 | 3,555 | 9,625 | 9,181 | |||||||||||
| Non-recurring revenue: | |||||||||||||||
| Software licenses | 161 | 1,343 | 872 | 2,803 | |||||||||||
| Services and other | 249 | 231 | 561 | 646 | |||||||||||
| Total non-recurring revenue | 410 | 1,574 | 1,433 | 3,449 | |||||||||||
| Total revenue | $ | 4,417 | $ | 5,129 | $ | 11,058 | $ | 12,630 | |||||||
Prior-period amounts have been reclassified to conform to the current period presentation.
Aware is a registered trademark of Aware, Inc.
| Company Contact Delaney Gembis Aware, Inc. 781-687-0300 marketing@aware.com | Investor Contact David Traverse Aware, Inc. 781-687-0300 IR@Aware.com |
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
What were Aware's third-quarter 2026 revenue and earnings?
Aware reported revenue of $4.4 million and a net loss of $0.8 million, or $0.04 per diluted share. In the third quarter of 2025, revenue was $5.1 million and net loss was $1.1 million, or $0.05 per diluted share.
When did Aware's 2026 cost reductions begin fully affecting quarterly results?
The third quarter of 2026 was the first full quarter reflecting savings from cost reductions implemented earlier in the year. Aware expects those actions to generate approximately $4.0 million in annualized savings.
What does Aware include in recurring revenue?
Aware includes revenue recognized from subscription, maintenance and recurring usage-based arrangements in recurring revenue. The measure can fluctuate between quarters because of renewal timing, contract structures, customer activity and the mix of revenue recognized in a given period.