Company: AWRE
Filing Date: 2025-08-01
Form Type: 10-Q
Source: 0000950170-25-101395
Chunk: 22

Company: AWARE INC /MA/
Filing Date: 2025-08-01
Form: 10-Q
Item: Item 8
Chunk 22
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, amortization of intangible assets related to acquisitions, and other third-party costs that are included with some of our software licenses.  Such costs primarily include: i) engineering salaries, stock-based compensation, fringe benefits, and facilities; ii) engineering consultants and contractors; iii) software license fees; and iv) hardware costs.

17

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. 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. Gross margins on revenue are a function of: i) the nature of the projects; ii) the level of engineering difficulty and labor hours required to complete project tasks; iii) how much we were able to charge; and iv) product mix.  We expect that gross margins on services and other revenue will continue to fluctuate in future periods based on the nature, complexity, and pricing of future projects and product mix.Research and development expense.  Research and development expense consists of costs for: i) engineering personnel