AWARE INC /MA/
For the period ended Sep 30, 2025. Filed Oct 31, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2025 · Filed Oct 31, 2025
AWRE$0.97+1.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-06-30; filed 2025-08-01.
0000950170-25-101395
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-09-30; filed 2025-10-31.
0001193125-25-260701
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 55 previous paragraphs and 57 current paragraphs.
29 unchanged; 26 reworded; 1 added; 0 removed; 0 previous and 1 current paragraphs rearranged.
Tables are not compared: 1 previous and 1 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (1)
Current report
Cost of revenue increased 71% from $0.3 million in the three months ended September 30, 2024 to $0.5 million in the three months ended September 30, 2025. Cost revenue as a percentage of total revenue increased from 7% in the third quarter of 2024 to 10% in the current year third quarter. The $0.2 million increase was the result of increased software license costs.
Reworded paragraphs (26)
Previous wording
Revenue and operating loss for the three months ended June 30, 2025 were $3.9 million and $2.0 million, respectively. These results compared to revenue of $4.3 million and operating loss of $1.3 million for the three months ended June 30, 2024. The decrease in revenue and operating loss in the current three month period was primarily due to a $0.4 million decrease in software license revenue and an increase by $0.2 million in operating expenses resulting from additional headcount hired in the first half of 2025.
Current wording
Revenue and operating loss for the three months ended September 30, 2025 were $5.1 million and $1.3 million, respectively. These results compared to revenue of $3.8 million and operating loss of $1.5 million for the three months ended September 30, 2024. The increase in revenue was primarily due to a $1.4 million increase in software license revenue, which was partially offset by a $0.2 million decrease in services and other revenue. The decrease in operating loss was primarily due to the $1.3 million increase in revenue and partial offset by $0.4 million in operating expenses resulting from additional headcount in 2025.
Previous wording
Revenue and operating loss for the six months ended June 30, 2025 were $7.5 million and $3.8 million, respectively. These results compared to revenue of $8.7 million and operating loss of $2.6 million for the six months ended June 30, 2024. The decrease in revenue and operating loss in the current six month period was primarily due to a $1.2 million decrease in software license revenue.
Current wording
Revenue and operating loss for the nine months ended September 30, 2025 were $12.6 million and $5.1 million, respectively. These results compared to revenue of $12.6 million and operating loss of $4.1 million for the nine months ended September 30, 2024. The changes to revenue was primarily due to a $0.2 million increase in software license revenue, $0.1 million increase in software maintenance and partially offset by $0.3 million decrease in services and other revenue. The decrease in operating loss was primarily due to $1.0 million increase in operating expenses resulting from additional headcount in 2025.
Previous wording
Software license revenue decreased 22% from $1.8 million in the three months ended June 30, 2024 to $1.4 million for the three months ended June 30, 2025. As a percentage of total revenue, software license revenue decreased from 42% in the second quarter of 2024 to 36% in the current year quarter. The $0.4 million decrease in software license revenue was due primarily to a decrease in perpetual licenses sales due to fewer one-time license deals in the current quarter.
Current wording
Software license revenue increased 115% from $1.2 million in the three months ended September 30, 2024 to $2.5 million for the three months ended September 30, 2025. As a percentage of total revenue, software license revenue increased from 31% in the third quarter of 2024 to 49% in the current year quarter. The $1.4 million increase in software license revenue was due primarily to an increase in perpetual licenses sales due to an increase in one-time license deals in the current quarter.
Previous wording
Software license revenue decreased 31% from $4.0 million in the six months ended June 30, 2024 to $2.7 million for the six months ended June 30, 2025. As a percentage of total revenue, software license revenue decreased from 45% in the six months ended June 30, 2024 to 36% in the six months ended June 30, 2025. The $1.2 million decrease in software license revenue was due primarily to a decrease in perpetual licenses sales of $0.8 million due to fewer one-time license deals in the current quarter and a $0.4 million decrease in license revenue related to subscription contracts as a result of timing of renewal of licenses.
Current wording
Software license revenue increased 2% from $5.1 million in the nine months ended September 30, 2024 to $5.3 million for the nine months ended September 30, 2025. As a percentage of total revenue, software license revenue increased from 41% in the nine months ended September 30, 2024 to 42% in the nine months ended September 30, 2025. The $0.2 million increase in software license revenue was due primarily to an increase in perpetual licenses sales.
Previous wording
Software maintenance revenue was $2.2 million in each of the three months ended June 30, 2025 and 2024. As a percentage of total revenue, software maintenance revenue increased from 50% in the second quarter of 2024 to 56% in the current year second quarter.
Current wording
Software maintenance increased 5% from $2.3 million in the three months ended September 30, 2024 to $2.4 million in the three months ended September 30, 2025 and 2024. As a percentage of total revenue, software maintenance revenue decreased from 59% in the third quarter of 2024 to 46% in the current year third quarter.
Previous wording
Software maintenance revenue was $4.3 million in each of the six months ended June 30, 2025 and 2024. As a percentage of total revenue, software maintenance revenue increased from 49% in the six months ended June 30, 2024 to 58% in the current year period.
Current wording
Software maintenance revenue increased 2% from $6.6 million in the nine months ended September 30, 2024 to $6.7 million for the nine months ended September 30, 2025. As a percentage of total revenue, software maintenance revenue increased from 52% in the nine months ended September 30, 2024 to 53% in the current year period.
Previous wording
Services and other revenue in the six months ended June 30, 2025 and 2024 was $0.4 million and $0.5 million, respectively. As a percentage of total revenue, services and other revenue increased from 5% in the second quarter of 2024 to 6% in the current year period.
Current wording
Services and other revenue decreased 45% from $0.4 million in the three months ended September 30, 2024 to $0.2 million in the three months ended September 30, 2025. As a percentage of total revenue, services and other revenue decreased from 11% in the three months ended September 30, 2024 to 5% in the current year period.
Previous wording
Services and other revenue in the three months ended June 30, 2025 and 2024 was $0.3 million and $0.4 million, respectively. As a percentage of total revenue, services and other revenue decreased from 8% in the second quarter of 2024 to 7% in the current year second quarter.
Current wording
Services and other revenue decreased 27% from $0.9 million in the nine months ended September 30, 2024 to $0.6 million in the nine months ended September 30, 2025. As a percentage of total revenue, services and other revenue decreased from 7% in the nine months ended September 30, 2024 to 5% in the current year period.
Previous wording
Cost of revenue was $0.3 million in each of the three months ended June 30, 2025 and 2024. Cost revenue as a percentage of total revenue increased from 6% in the second quarter of 2024 to 9% in the current year second quarter. For both the three months ended June 30, 2025 and the three months ended June 30, 2024, cost of revenue of $0.3 million was composed of $0.1 million of engineering costs to perform customer services, $0.1 million of amortization of intangible assets, and $0.1 million for software license and hardware costs.
Current wording
Cost of revenue increased 28% from $0.8 million in the nine months ended September 30, 2024 to $1.1 million in the nine months ended September 30, 2025. Cost of revenue as a percentage of total revenue increased from 6% in the nine months ended September 30, 2024 to 9% in the current year period. The $0.3 million increase was the result of increased software license costs.
Previous wording
Cost of revenue was $0.6 million and $0.5 million in the six months ended June 30, 2025 and 2024, respectively. Cost revenue as a percentage of total revenue increased from 6% in the six months ended June 30, 2024 to 8% in the current year period. For the six months ended June 30, 2025, cost of revenue of $0.6 million was composed of $0.2 million of engineering costs to perform customer services, $0.2 million of amortization of intangible assets, and $0.2 million for software license and hardware costs. For the six months ended June 30, 2024, cost of revenue of $0.5 million was composed of $0.2 million of engineering costs to perform customer services, $0.2 million of amortization of intangible assets, and $0.1 million for software license and hardware costs.
Current wording
For the nine months ended September 30, 2025 cost of revenue was composed of $0.5 million for software license and hardware costs, $0.3 million of engineering costs to perform customer services, and $0.3 million of amortization of intangible assets.
Previous wording
Total engineering costs increased 6% from $1.9 million in the three months ended June 30, 2024 to $2.1 million in the three months ended June 30, 2025. As a percentage of total revenue, total engineering costs increased from 45% in the three months ended June 30, 2024 to 53% in the same current year quarter.
Current wording
Total engineering costs increased 13% from $2.0 million in the three months ended September 30, 2024 to $2.2 million in the three months ended September 30, 2025. As a percentage of total revenue, total engineering costs decreased from 51% in the three months ended September 30, 2024 to 43% in the same current year quarter.
Previous wording
Total engineering costs decreased 4% from $4.2 million in the six months ended June 30, 2024 to $4.1 million in the six months ended June 30, 2025. As a percentage of total revenue, total engineering costs increased from 48% in the six months ended June 30, 2024 to 54% in the same current year period.
Current wording
Total engineering costs increased 1% from $6.2 million in the nine months ended September 30, 2024 to $6.3 million in the nine months ended September 30, 2025. As a percentage of total revenue, total engineering costs decreased from 50% in the nine months ended September 30, 2024 to 49% in the same current year period.
Previous wording
The spending increase for the three months ended June 30, 2025 compared to the same prior year quarter was primarily due to increased headcount in the first half of 2025. The decreases for the six months ended June 30, 2025 compared to the same prior year periods was primarily due to decreased headcount that was only partially offset by new hires in the first half of 2025. We anticipate engineering expenses to increase during the remainder of 2025 as we ramp up investment to support strategic product development initiatives.
Current wording
The spending increase for the three and nine ended September 30, 2025 compared to the same prior year period was primarily due to increased headcount 2025. We anticipate engineering expenses to increase during the remainder of 2025 as we ramp up investment to support strategic product development initiatives.
Previous wording
Selling and marketing expense decreased 6% from $2.1 million in the three months ended June 30, 2024 to $2.0 million in the same three month period of 2025. As a percentage of total revenue, selling and marketing expense increased from 33% in the second quarter of 2024 to 41% in the corresponding period in 2025.
Current wording
Selling and marketing expense increased 13% from $1.9 million in the three months ended September 30, 2024 to $2.1 million in the same three month period of 2025. As a percentage of total revenue, selling and marketing expense decreased from 48% in the third quarter of 2024 to 41% in the corresponding period in 2025.
Previous wording
Selling and marketing expense decreased 9% from $4.0 million in the six months ended June 30, 2024 to $3.6 million in the same six month period of 2025. As a percentage of total revenue, selling and marketing expense increased from 46% in the six months ended June 30, 2024 to 48% in the corresponding period in 2025.
Current wording
Selling and marketing expense decreased 2% from $5.9 million in the nine months ended September 30, 2024 to $5.7 million in the same nine month period of 2025. As a percentage of total revenue, selling and marketing expense decreased from 46% in the nine months ended September 30, 2024 to 45% in the corresponding period in 2025.
Previous wording
The spending decreases for the three months ended June 30, 2025, compared to the same prior year was primarily due to lower headcount. The spending decreases for the six months ended June 30, 2025, compared to the same prior year periods was primarily due to lower headcount including the departure of our chief revenue officer in 2024 who was not replaced until March 2025 and the departure of our chief product officer in 2024.
Current wording
The spending increases for the three months ended September 30, 2025, compared to the same prior year was primarily due to one time savings for the three months ended September 30, 2024 related to the reversal of accrued bonus expense as a result of the departure of our chief revenue officer in September 2024. The spending decreases for the nine months ended June 30, 2025, compared to the same prior year period was primarily due to lower headcount including the departure of our chief revenue officer in 2024 who was not replaced until March 2025 and the departure of our chief product officer in 2024.
Previous wording
General and administrative expense increased 11% from $1.4 million for the three months ended June 30, 2024 to $1.6 million for the three months ended June 30, 2025. As a percentage of total revenue, general and administrative expense was 33% in the second quarter of 2024 and 41% in the corresponding period of 2025.
Current wording
General and administrative expense increased 29% from $1.3 million for the three months ended September 30, 2024 to $1.7 million for the three months ended September 30, 2025. As a percentage of total revenue, general and administrative expense was 34% in the third quarter of 2024 and 33% in the corresponding period of 2025.
Previous wording
General and administrative expense increased 17% from $2.8 million for the six months ended June 30, 2024 to $3.2 million for the six months ended June 30, 2025. As a percentage of total revenue, general and administrative expense was 32% in the six months ended June 30, 2024 and 43% in the corresponding period of 2025.
Current wording
General and administrative expense increased 20% from $4.1 million for the nine months ended September 30, 2024 to $4.9 million for the nine months ended September 30, 2025. As a percentage of total revenue, general and administrative expense was 32% in the nine months ended September 30, 2024 and 40% in the corresponding period of 2025.
Previous wording
The expense increase for the three months ended June 30, 2025 compared to the same prior year period was primarily due to the impact of increase in stock compensation expense of $0.1 million and increase in profession services and recruiting fees of $0.1 million,
Current wording
The expense increase for the three months ended September 30, 2025 compared to the same prior year period was primarily due to the impact of an increase in stock compensation expense of $0.1 million, an increase in payroll-related expense of $0.1 million, and an increase in professional services fees of $0.1 million.
Previous wording
The expense increase for the six months ended June 30, 2025 compared to the same prior year period was primarily due to the impact of a $0.1 million signing bonus paid to Mr. Amlani in connection with his appointment as our chief executive officer, an increase in professional services of $0.1 million related to strategic advisor hired as part of our chief executive officer transition, an increase in stock compensation expense of $0.1 million and an increase in compensation expense of $0.1 million. Fluctuations in general and administrative expenses are expected depending on specific activities in a period.
Current wording
The expense increase for the nine months ended September 30, 2025 compared to the same prior year period was primarily due to the impact of a $0.1 million signing bonus paid to Mr. Amlani in connection with his appointment as our chief executive officer, an increase in compensation expense of $0.3 million, an increase in professional services fees of $0.2 million, and an increase in stock compensation expense of $0.2 million. Fluctuations in general and administrative expenses are expected depending on specific activities in a period.
Previous wording
Interest Income. Interest income was $0.2 million and $0.3 million in the three months ended June 30, 2025 and 2024, respectively. Interest income was $0.5 million and $0.6 million in the six months ended June 30, 2025 and 2024, respectively. The decrease in interest income in each of the three and six months ended June 30, 2025 was primarily the result of lower average cash balances during the current year periods.
Current wording
Interest Income. Interest income was $0.2 million and $0.3 million in the three months ended September 30, 2025 and 2024, respectively. Interest income was $0.7 million and $0.9 million in the nine months ended September 30, 2025 and 2024, respectively. The decrease in interest income in each of the three and nine months ended September 30, 2025 was primarily the result of lower average cash balances during the current year periods.
Previous wording
We expect interest income to decrease slightly over the remainder of 2025 due to a lower projected average cash balance.
Current wording
We expect interest income to decrease slightly over the remainder of 2025 due to a lower projected average cash balance and lower interest rates.
Previous wording
Income taxes. Total income tax expense was $26 thousand and $39 thousand for the three months ended June 30, 2025 and 2024, respectively. Total income tax expense was $34 thousand and $39 thousand for the six months ended June 30, 2025 and 2024, respectively. The income tax expense relates to limitations on the usage of net operating loss carryforwards generated in years beginning after December 31, 2017.
Current wording
Income taxes. Total income tax expense was $5 thousand and $15 thousand for the three months ended September 30, 2025 and 2024, respectively. Total income tax expense was $38 thousand and $54 thousand for the nine months ended September 30, 2025 and 2024, respectively. The income tax expense relates to limitations on the usage of net operating loss carryforwards generated in years beginning after December 31, 2017.
Previous wording
At June 30, 2025, we had cash, cash equivalents and marketable securities of $23.7 million, which represented a decrease of $4.1 million from December 31, 2024. The decrease in cash, cash equivalents and marketable securities was primarily due to the impact of $4.1 million of cash used in operating activities.
Current wording
At September 30, 2025, we had cash, cash equivalents and marketable securities of $22.5 million, which represented a decrease of $5.3 million from December 31, 2024. The decrease in cash, cash equivalents and marketable securities was primarily due to the impact of $6.4 million of cash used in operating activities.
Previous wording
Cash used in investing activities was $1.5 million in the first six months of 2025, which primarily consisted of $1.5 million of net purchases of marketable securities and $45,000 thousand used for the purchase of fixed assets.
Current wording
Cash used in investing activities was $0.2 million in the first nine months of 2025, which primarily consisted of $0.1 million of net purchases of marketable securities and $45 thousand used for the purchase of fixed assets.
Previous wording
Cash used by financing activities was $88 thousand in the first six months of 2025, which primarily consisted of cash used to repurchase shares of our common stock.
Current wording
Cash used by financing activities was $82 thousand in the first nine months of 2025, which primarily consisted of cash used to repurchase shares of our common stock.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
For the three months ended September 30, 2025 cost of revenue was composed of $0.3 million for software license and hardware costs, $0.1 million of engineering costs to perform customer services, and $0.1 million of amortization of intangible assets.