Company: AWRE
Filing Date: 2025-08-01
Form Type: 10-Q
Source: 0000950170-25-101395
Chunk: 21

Company: AWARE INC /MA/
Filing Date: 2025-08-01
Form: 10-Q
Item: Item 8
Chunk 21
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    Software license sales have historically fluctuated, and we expect software license revenue to continue to fluctuate since these sales are based on the timing of projects with our customers and partners.Our market strategy is to continue to focus on our legacy government biometrics markets and expand into new commercial biometrics markets.  We are unable to predict future revenue from commercial markets as these are emerging markets.  Software maintenance.  Software maintenance consists of revenue from the sale of software maintenance contracts. Software maintenance contracts entitle customers to receive software support and software updates, if and when they become available, during the term of the contract.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.  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.  Services and other revenue. Services revenue consists of fees we charge to perform software development, integration, installation, and customization services. Similar to software license revenue, services revenue depends on our ability to win biometrics systems projects either directly with end user customers or in conjunction with channel partners.  Other revenue consists of hardware fees that are included with some of our software licenses.  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. 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. Services and other revenue fluctuate dependent on when we commence new projects and when we complete projects that were started in previous periods.Cost of revenue.  Cost of revenue consists primarily of engineering costs to perform customer services projects