Aware (NASDAQ:AWRE) reported second-quarter fiscal 2026 revenue of $3.3 million, down from $3.9 million a year earlier, as lower perpetual software license revenue and slower federal procurement activity weighed on results. Chief Executive Officer and President Ajay Amlani said the quarter came in below management’s expectations, citing the timing variability of the company’s standalone product business and disruption associated with the government shutdown.
For the quarter ended June 30, net loss widened to $2.6 million, or $0.12 per diluted share, from $2 million, or $0.08 per diluted share, in the prior-year period. Adjusted EBITDA loss was $2.3 million, compared with a $1.4 million loss a year earlier.
Platform strategy and product updates
The strategy is aimed at government and commercial organizations managing multiple biometric vendors, systems and data sources. Amlani cited company research showing that 98% of organizations using biometrics are interested in orchestration capabilities, while those organizations use an average of three biometric vendors.
During the quarter, Aware added ROC and Mitek as integrated technology partners for the Awareness Platform. Amlani said ROC provides biometric matching technology, while Mitek brings identity verification and liveness detection capabilities to the platform.
The company also announced updates to its Intelligent Liveness and Intelligent Matching technologies. Aware said its liveness capabilities use optical and spectral analysis intended to verify that biometric images originate from a real camera sensor in real time, while maintaining a passive experience that typically takes less than two seconds. Its matching algorithm enhancements are designed to deliver an approximately 10-times lower false non-match rate than previous generations and support sub-second one-to-N matching across large biometric datasets.
Federal opportunity and commercial relevance
Amlani said the company has seen renewed activity in the federal market following normalized Department of Homeland Security operations in May. He cited increased conversations, requests for information, procurement activity and program momentum related to homeland security, border modernization, airport infrastructure, traveler processing and biometric identity verification.
He referenced publicly visible DHS and Transportation Security Administration initiatives, including DHS Traveler Processing and Vetting Software, TSA’s Gold+ and Secure Identity Management support initiatives, and the DHS Interagency Border Inspection System. However, Amlani said the timing and revenue impact from these opportunities remain difficult to predict.
In response to questions about specific government programs, including Mexico’s national biometric ID initiative and biometric data-sharing arrangements, Amlani said Aware does not comment on specific customer pursuits, bids or programs. He said the company sees broader public activity around biometric modernization, interoperability, border security and traveler processing as areas where its technology is relevant.
Amlani also said government and commercial customers face similar challenges from AI-enabled fraud, regulatory pressure and the need to offer secure digital experiences with limited user friction. He said commercial customers can view government adoption as a signal of security, reliability and scalability, while government agencies benchmark commercial technology for usability and flexibility.
Costs, balance sheet and outlook
Chief Financial Officer David Traverse said second-quarter operating expenses rose to $6 million from $5.9 million in the prior-year period. The increase reflected costs associated with 2025 hires, partially offset by spending reductions made during the first half of 2026.
For the first six months of fiscal 2026, revenue totaled $6.6 million, compared with $7.5 million a year earlier. Operating expenses increased to $13 million from $11.3 million, including $700,000 in one-time severance costs and higher compensation costs tied to 2025 hiring. The six-month net loss was $6 million, or $0.28 per diluted share, compared with a $3.4 million loss, or $0.16 per diluted share, in the prior-year period.
- Second-quarter revenue: $3.3 million, versus $3.9 million a year earlier.
- Second-quarter net loss: $2.6 million, or $0.12 per diluted share.
- Second-quarter adjusted EBITDA loss: $2.3 million.
- Cash equivalents and marketable securities at quarter-end: approximately $16.8 million.
- Debt at quarter-end: none.
Traverse said Aware reduced operating expenses by $4 million on an annualized basis beginning in the second quarter and expects lower expenses during the second half as those actions become more fully reflected in results. The company expects second-half revenue to improve from first-half levels, supported by typical seasonality, subscription renewals and customer activity that tend to be weighted toward the back half of the year.
Management cautioned that quarterly results may continue to vary based on perpetual license timing, procurement cycles, renewal schedules and service activity. Amlani said the company is not yet where it wants to be, but remains focused on near-term opportunities, expense discipline, existing customer support and further development of the Awareness Platform.
Chief Revenue Officer Brian Krause said the Awareness Platform, announced earlier this year, is market-ready and available for customer demonstrations, trials and procurement. He also said a top-15 global financial institution secured as a customer a year ago has renewed into its second year and evaluated additional Aware technology during the second quarter for potential future use.
About Aware (NASDAQ:AWRE)
Aware, Inc is a technology company specializing in biometric software and image processing solutions. Its core offerings include fingerprint, face and iris recognition algorithms, biometric template management, and mobile enrolment tools designed to capture and verify identities in secure environments. The company’s software development kits (SDKs) and web services APIs enable system integrators, device manufacturers and application developers to embed biometric and forensic capabilities into their products and services.
Founded in 1986 and headquartered in Bedford, Massachusetts, Aware evolved from an imaging technology provider into a leading vendor of biometric software.
