authID Q2 2025 Earnings Call Transcript

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Provided by Quartr
August 14, 2025

Key Takeaways

  • Positive Sentiment: AuthID reported its highest quarterly revenue ever, with Q2 sales jumping to $1.4 million from $0.3 million last year and the prior quarter.
  • Positive Sentiment: The recently launched IDX platform aims to eliminate supply chain identity fraud by combining facial biometrics with an end-to-end identity management standard without replacing existing systems.
  • Positive Sentiment: Strategic alliances with NEC for global IDX deployment and with Proof for integrated fraud prevention are in place, with revenue contributions expected to begin in Q3.
  • Negative Sentiment: Operating expenses rose to $5.9 million in Q2, driving a net loss of $4.4 million—up from $3.3 million a year ago—due to increased headcount investment and a $0.8 million credit loss provision.
  • Positive Sentiment: As of June 30, the company held $8.3 million in cash, with a remaining performance obligation of $13.8 million and ARR of $5.8 million, positioning it to meet its $18 million bookings target for 2025.
AI Generated. May Contain Errors.
Earnings Conference Call
authID Q2 2025
00:00 / 00:00

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Operator

Good afternoon, everyone, and thank you for participating in today's conference call to discuss AuthID's Second Quarter twenty twenty five Financial Results. At this time, all participants are in a listen only mode. Please be advised that today's conference is being recorded. After the speakers' presentation, there will be a question and answer session. I would now like to hand the conference over to AuthID's General Counsel, Graham Arad. Graham, please go ahead.

Graham Arad
Graham Arad
General Counsel at authID

Thank you, operator. Greetings and good afternoon. This is Graham Marad, General Counsel of AuthID. Welcome to the OrthID second quarter twenty twenty five results conference call. As a reminder, this conference is being recorded.

Graham Arad
Graham Arad
General Counsel at authID

Joining me on today's call are our CEO, Ron DeGuro our CFO, Ed Salito and our Founder and CTO, Tom Serke. By now, you should have access to today's press release announcing our second quarter twenty twenty five results. If you have not received this, the release can be found on our website at investors.authid.ai under the News and Events section. Throughout this conference call, we will be presenting certain non GAAP financial information. This information is not calculated in accordance with GAAP and may be calculated differently from other companies similarly titled non GAAP information.

Graham Arad
Graham Arad
General Counsel at authID

Quantitative reconciliation of our non GAAP adjusted EBITDA information to the most directly comparable GAAP financial information appears in today's press release. Before we begin our formal remarks, let me remind everyone that part of our discussion today will include forward looking statements. Such forward looking statements are not guarantees of future performance, and therefore, you should not put undue reliance on them. These statements are subject to numerous risks and uncertainties that could cause actual results to differ materially from what we expect. Some of these risks are mentioned in today's press release.

Graham Arad
Graham Arad
General Counsel at authID

Others are discussed in our Form 10 ks and other filings, which are made available at www.sec.gov. Finally, if you are listening to this call via the webcast, you will be able to see the results presentation and advance the slides yourself as prompted by our speakers. I'd now like to introduce our CEO, Ron DeGuro.

Rhon Daguro
Rhon Daguro
CEO & Director at authID

Thank you, Graham, and thank you all for joining us today. I am very excited about the progress we have made through the 2025. We recorded by far our highest quarterly revenue in off ID's history, 1,400,000.0. This is a testament to our team's plan to sign clients and bring them live. We are starting to reap the benefits of our strategy, and we will cover our financial results momentarily.

Rhon Daguro
Rhon Daguro
CEO & Director at authID

But first, I'd like to provide updates on the business. Since joining off ID, I have had the belief that every single identity management strategy will require facial biometrics in order to combat the advancements of AI being used and abused by fraudsters. No CISO on their own can defend against the current threats they face today with the identity systems they installed even just a year ago. We see this playing out in the news almost every day, with data breaches taking place at incredibly high rates. Every identity stack will have to incorporate facial biometrics as either an additional signal or as the main signal to determine who is behind the device.

Rhon Daguro
Rhon Daguro
CEO & Director at authID

I believe that AuthID can solve this problem for companies who have to manage multiple identities from contractors, vendors, and suppliers. In response to this pressing issue, we recently launched our IDX platform in late July. We believe IDX is one of the biggest advances in the identity industry that will eliminate identity fraud, specifically within supply chain workforce. We do this by integrating our highly accurate biometric authentication with a platform developed from the most comprehensive, accountable, and reusable identity management standard for a working end to end supply chain identity management solution. The IDEXX Identity solution will be able to exchange an identity that is accountable, deterministic, accurate, and compliant without having to abandon existing identity management infrastructure already in place in a manner that meets regulatory and compliance requirements so that CSOs will ultimately know every single identity in their system.

Rhon Daguro
Rhon Daguro
CEO & Director at authID

More to come on IDX, but now let me cover our second quarter twenty twenty five highlights in comparison to our last earnings call. During our Q1 twenty twenty five earnings call, we stated our ambition to sign another major Fortune five hundred customer this year. So this earnings call, I am pleased to report that we have gone live in production with a UK based Fortune Global five hundred customer that is using our privacy key product. After a successful pilot pushed out to thousands of employees for proofing and password reset, we were able to take that deployment live, leveraging the integration already in place from the pilot. We hope to greatly expand this deployment as we work toward the long term partnership with significant financial upside.

Rhon Daguro
Rhon Daguro
CEO & Director at authID

Additionally, last quarter, I discussed our potential partnership with a major global biometric hardware provider in which we were in advanced discussion to implement joint product development and sales. So this quarter, I'm excited that I finally get to share that major global biometric hardware provider is NEC, a multinational leader in IT and technology solutions, which has over a 100,000 employees in over 50 countries who has been a leader in biometric solutions since 02/2007. With the support of NEC that introduced a similar product known as Symphonic Trust in Japan, we will be able to successfully demonstrate interoperability of a reusable identity between two companies over two countries, United States and Japan, without any changes to the incumbent identity management systems that were in place before IDX. This has never been done before. And to further our relationship with NEC, we are very excited to add Ram Mengani, a former NEC executive, as a critical member of our board of directors.

Rhon Daguro
Rhon Daguro
CEO & Director at authID

We are excited about our partnership and growth opportunities ahead of us. Also last quarter, I had shared that we have been confirmed as the vendor of choice for a major identity fraud prevention platform. So this earnings call, I am very pleased to finally say their name. AuthID signed an agreement with Proof, one of the largest identity fraud platforms in the world. In fact, we are actively working towards the go live of our first joint customer in the coming weeks.

Rhon Daguro
Rhon Daguro
CEO & Director at authID

We've been very active with Proof through our joint thought leadership webinars, where we have met with customers to share Proof's newly enhanced capabilities with AuthID's platform. This collaboration is not just the customer story. It's a clear vote of confidence from one of the largest independent fraud platforms in the world. I know our investors are eager to understand the financial benefits of our agreement with Proof. And while I wish we could be more specific, our partnership terms are required to keep that confidential.

Rhon Daguro
Rhon Daguro
CEO & Director at authID

However, investors will begin to see the revenue impact from the partnership through our financials starting in Q3 of this year. And finally, we continue to advance our contract negotiations with a very large Fortune five hundred international human capital company in preparation for a global rollout, where we remain confident that we will sign a long term commitment soon, and we will provide an update again when we have news to share. These achievements further illustrate how our technology investments and innovations are in demand from major enterprise customers and partners. Let me now cover the recent progress made across our platform and existing partnerships. One practical shift to note is that we are emphasizing performance based production level pilots to showcase our capabilities to prospects.

Rhon Daguro
Rhon Daguro
CEO & Director at authID

This has been an effective strategy rather than just relying on proof of concept. Once the pilot is completed, it is far easier to transition their environment from pilot to full production since the integrations have already been in place. This requires a full level of effort on our teams early in the sales cycle and demands a lot of attention, but it has been proven to be an effective way to earn customer trust, shorten our goal lifetime and time to revenue. With regard to our technology improvements, I'd note that just after launching PrivacyKey, we immediately began improving the technology in order to better serve our customers. In this case, we have upgraded PrivacyKey with a one to many search capability, which has already been put into place in production pilots.

Rhon Daguro
Rhon Daguro
CEO & Director at authID

This update gives companies the ability to scan multiple faces and return the results lightning fast with the highest accuracy in the marketplace. As a result, our channel partners have been happy to introduce us to additional target customers, which represent an increase in sales pipeline. Our channel partners also add the benefit of bringing us into their key verticals, which helps expand our total addressable market. Before handing it to Ed, let me revisit IDX, our major technological new product milestone. The IDX platform is a global platform built on a fast adopted standard of the accountable digital identity association or ADIA founded by Ramesh Keshanapali.

Rhon Daguro
Rhon Daguro
CEO & Director at authID

Along with NEC, no one else has leveraged this new standard into working software. In fact, the ADIA is merging with the Secure Identity Alliance, which includes ZoomInfo, IDEMIA, the FBI, and other security minded organizations. This puts off ID in good company and gives us greater visibility and credibility when prospecting customers across the globe. Many large enterprises use contractors who in turn use other contractors for a variety of business operations. Supply chain identity management is a big problem for large companies since they cannot properly vet the identities of their vendor contractors because of various rules and compliance regulations.

Rhon Daguro
Rhon Daguro
CEO & Director at authID

From an investment perspective, the identity management market is estimated to be 61,000,000,000 by 2032 by Fortune Business Insights. OPD can only participate in the authentication subset of this market. But with IDX, OPD is now able to play in the entire market space. Our TAM has dramatically increased and our launch partner NEC is one of the largest biometric hardware providers in the world. We are still in the early stages of IDX and we look forward to sharing more about our expectations for this new product once we're in a position to provide a well informed financial forecast.

Rhon Daguro
Rhon Daguro
CEO & Director at authID

Currently, we partner with identity management companies and rely on them to try to solve supply chain identity management problem. When we go into a new engagement and our customers want to implement capabilities like IDX, we are not limited to their existing identity management provider anymore, which will allow us to close larger deals faster. I'm very pleased with our second quarter results and progress made through the first half of the year. Will now take us through the financials in greater detail. Thank you, Ron,

Ed Sellitto
Ed Sellitto
CFO at authID

and thank you all for joining us today. I look forward to walking you through our Q2 results. Looking at our Q2 twenty twenty five GAAP results, total revenue for the quarter increased significantly to $1,400,000 compared to $300,000 last year and $300,000 in Q1. The strong revenue growth in Q2, both sequentially and year over year, was primarily driven by the go live of several contracts signed earlier in 2024. These implementations have now been successfully delivered and are contributing meaningfully to top line results.

Ed Sellitto
Ed Sellitto
CFO at authID

Operating expenses for Q2 were $5,900,000 compared to $3,600,000 a year ago and $4,700,000 last quarter. The year over year increase is primarily due to increased headcount investment in sales and R and D. The sequential increase is primarily driven by a $800,000 impact related to provision for estimated credit loss expense. This represents a credit risk assessment related to certain customer contracts. While this provision reflects our estimated risks, we continue to have strong confidence in our ability to collect on these customer contracts.

Ed Sellitto
Ed Sellitto
CFO at authID

Net loss for the quarter was $4,400,000 of which non cash charges were 1,100,000.0 This compares to a net loss of $3,300,000 for the same period last year, which included $800,000 in non cash and one time severance charges and a net loss of $4,300,000 in the previous quarter. Net loss per share for the quarter was $0.33 compared with $0.34 a year ago and $0.40 last quarter. Turning to RPO on the next slide. Remaining Performance Obligation, or RPO, represents the minimum revenue expected to be recognized from our signed contracts based on our customers' contractual commitments. As of 06/30/2025, our total RPO was $13,800,000 a decrease of approximately $100,000 over the prior quarter as we recognized contracted revenue in Q2 and also added new contracts signed in the quarter.

Ed Sellitto
Ed Sellitto
CFO at authID

Our RPO for Q2 compares favorably with the RPO at the same period last year, which was $4,200,000 We expect to recognize the full RPO of $13,800,000 over the entire life of our contracts, which are typically signed with a three year term. Turning to our balance sheet highlights. As of June 30, our cash balance totaled $8,300,000 which includes approximately $8,500,000 in net proceeds received from our successful capital raises in April and May 2025. Our common shares outstanding stood at 13,400,000 with 2,200,000.0 shares added from our fundraise. We will use these funds for a number of priorities, including closing key deals with Fortune 500 prospects, generating revenue growth through our recent IDX platform launch, as well as by implementing and ramping our customer base.

Ed Sellitto
Ed Sellitto
CFO at authID

On to our non GAAP results on the next slide. Adjusted EBITDA loss was $3,400,000 for Q2 compared with a $2,500,000 loss for the same period last year and a $3,900,000 loss last quarter. As described with our operating expense results, the year over year increase in EBITDA loss is primarily due to increased headcount investment in sales and R and D, as well as the Q2 provision for estimated credit loss expense. We also monitor and report on annual recurring revenue, or ARR, which is defined as the amount of recurring revenue earned during the last three months of the relevant period as determined in accordance with GAAP, multiplied by four. ARR as of Q2 is $5,800,000 compared to $1,100,000 of ARR as of Q2 twenty twenty four and $1,200,000 as of last quarter.

Ed Sellitto
Ed Sellitto
CFO at authID

Turning to BAR, or booked annual recurring revenue, which is the projected amount of annual recurring revenue we believe will be earned under contracted orders looking at eighteen months from the date of signing of each customer contract. The gross amount of BAR signed in the 2025 was $2,200,000 up from $600,000 of gross BAR a year ago and $10,000 in Q1. The increase in BAR for the quarter was led by the signing of PRUV, the identity fraud platform Ryan called out earlier. As previously explained during our quarterly earnings call, BAR comprises two components, which we refer to as CAR and UAC. CAR, or Committed Annual Recurring Revenue, represents the total annual customer contractual commitment through fixed license fees and minimum usage commitments.

Ed Sellitto
Ed Sellitto
CFO at authID

These commitments are directly recognized as revenue in each contract year after each customer goes live with the service. Q2 twenty twenty five CAR represents $900,000 approximately 41% of reported VAR. UAC, or Estimated Usage Above Commitment, is an estimate of annual customer usage that will exceed contractual commitments. Q2 UAC represents the remaining $1,300,000 or 59% of reported VaR. Turning to our revenue growth stages on the next slide.

Ed Sellitto
Ed Sellitto
CFO at authID

I will finish off by summarizing the progress we're seeing through our revenue growth stages. The first milestone we use to monitor our growth is bookings, as measured by bar. In Q2, we realized a total gross bar of $2,200,000 We're excited to begin closing the major large enterprise and platform partnership deals that we discussed last quarter and expect to continue accelerating our bookings growth over the remainder of 2025 as we add pipeline and progress our key large enterprise and platform partnership deals. The next milestone is our remaining performance obligation, or RPO. As I detailed earlier, as of Q2 we have secured approximately 13,800,000 in RPO, a number that we expect to increase as our bookings continue to grow throughout the remainder of the year.

Ed Sellitto
Ed Sellitto
CFO at authID

Our third milestone is revenue recognized in accordance with GAAP. Our Q2 year to date revenue of $1,700,000 already surpasses our twenty twenty four full year revenue by approximately $900,000 and we expect this growth to continue throughout the year as our existing signed contracts continue to go live and ramp. And as we've called out in prior earnings calls, we are increasing our focus on customer retention and expansion this year as our customer contracts mature. We continue working to build on our customer expansions and grow our customer relationships by adding tangible value and helping our customers achieve their objectives, as well as expand and identify new use cases. Overall, we look forward to building on our Q2 momentum.

Ed Sellitto
Ed Sellitto
CFO at authID

As we previously stated, our goal is to deliver $18,000,000 in bar for 2025. We remain on track to meeting our expectations and look forward to updating our investors again in our Q3 call. With that, operator, we would now like to open up for questions.

Operator

Thank you. Our first question comes from Gary Brody with Deep Knowledge Investing. You may proceed.

Gary Brode
Managing Partner at Deep Knowledge Investing

Hey, guys. I've got a question about the financials. Ed, you might be the right person to answer this. So it looks like you took in $1,200,000 of deferred revenue in the quarter. First, can you talk a little bit about where that came from?

Gary Brode
Managing Partner at Deep Knowledge Investing

And then second, you're showing annual recurring revenue of $5,800,000 which is the quarter's revenue times four. But if you took in $1,200,000 of deferred revenue in the quarter, is that recurring?

Ed Sellitto
Ed Sellitto
CFO at authID

Hey, Gary. Nice to hear your voice. Thanks for the question. So, two part question. The first was about the deferred revenue, the $1,200,000 and that came from invoices that we received from customer contracts that have not yet been recognized as revenue.

Ed Sellitto
Ed Sellitto
CFO at authID

So, we have some invoices that have been issued based on our contract terms that come ahead of the revenue recognition, and so we do expect those invoices and deferred revenue to contribute and roll into revenue over the coming quarters as revenue gets recognized, number one. And number two, you're sorry, can you repeat the second part of your question again?

Gary Brode
Managing Partner at Deep Knowledge Investing

Well, I think you've answered. The second part of the question is, is that actual actually recurring? But if what you're saying is that the deferred revenue came from invoices from customer contracts where you guys are about to start providing services, then it is recurring, and your $5,800,000 of annual recurring revenue is accurate. Am I understanding you correctly?

Ed Sellitto
Ed Sellitto
CFO at authID

That's correct. The amounts that are in deferred revenue results are coming from contract driven invoices that are recurring in nature are just yet to be recognized according to our revenue recognition policy.

Gary Brode
Managing Partner at Deep Knowledge Investing

Okay. Got it. Alright. And then can I ask you do you want me to jump back in the queue, or can I ask you a few questions about the approved deal?

Ed Sellitto
Ed Sellitto
CFO at authID

Go ahead, Gary.

Gary Brode
Managing Partner at Deep Knowledge Investing

Okay. So on the webinar that Dale did earlier this week with Prove, they said something on the call that implied you guys were very close to or you had a working combined model, and that that was already up and running. They didn't say it, but it was implied. And then today, you guys were talking about being very close to launching with Prove and one of their customers. So I'm assuming that that's correct, that there is a working model for the combined company, for the combined services rather, and then you guys are about to start, providing services to a Proof customer.

Gary Brode
Managing Partner at Deep Knowledge Investing

When would you anticipate first of all, is that correct? And second, when would you anticipate starting to collect revenue with that contract?

Rhon Daguro
Rhon Daguro
CEO & Director at authID

Hey, Gary. I'll I'll take that question, and thank thank you for that question. Yep. Can you hear me loud and clear? Just wanna make sure.

Gary Brode
Managing Partner at Deep Knowledge Investing

Yeah. Crystal clear.

Ed Sellitto
Ed Sellitto
CFO at authID

Alright. Fantastic.

Rhon Daguro
Rhon Daguro
CEO & Director at authID

So, the prove the prove partnership is actually almost like, two parts. The first part is, you know, off ID has capabilities with onboarding. So our our, we call it document verification onboarding a new customer, new client. We have those capabilities that proof has had other partners for, and that piece and that technology where we're partnering with them can be realized very quickly. No integrations.

Rhon Daguro
Rhon Daguro
CEO & Director at authID

We just perform we perform better than most in the marketplace. And that's kind of like how we won the partnership to be able to work with proof. That's that's that part number one. So there's a, there's an integration piece that really is very simple to do. The second part that's a little more strategic where proved is as the largest fraud platform out there.

Rhon Daguro
Rhon Daguro
CEO & Director at authID

They, they are aligning with that previous statement. I said in my comments that every identity stack is going to have to either incorporate a biometric signal in part, or in whole to add to their service just because fraud is so rampant, especially with AI. So, the second part is is the part that's a little bit more strategic for proof. And and that is the part that we are working very closely with them to build our technology close into their stack and to make it an offering within the proof, platform. I don't wanna give the name away that they're using.

Rhon Daguro
Rhon Daguro
CEO & Director at authID

So let them let them, announce that. But that that is the second part that's a lot more strategic for us, and we're very excited about that as well. But we'll we'll we'll temper the announcements with Proof and allow them to do that. But, really, that's a two part partnership, and which is why we're excited about it.

Gary Brode
Managing Partner at Deep Knowledge Investing

Okay. So And then

Rhon Daguro
Rhon Daguro
CEO & Director at authID

I think you have a second question. Right?

Gary Brode
Managing Partner at Deep Knowledge Investing

Yeah. The the other question on that is at what point will you start collecting revenue? Because it sounds like you're close, but I don't, you know, I don't wanna be overly optimistic.

Rhon Daguro
Rhon Daguro
CEO & Director at authID

Yeah. So, so in my comments, I said we're about to take a customer live here in a couple days. In reality, we you know, hopefully, hope hopefully, it's tomorrow, but we don't know yet. We will see. But we're very close to taking one one of the one of our joint customers live on that first part of that partnership that I just described.

Rhon Daguro
Rhon Daguro
CEO & Director at authID

So, on the, you know, like I said, I described the two parts. The first part of that partnership that doesn't require massive integration, that's the that's the first initiative, and we're gonna be hopefully taking one of those joint customers live here in the next coming coming days. So so the the main question is when will we start to see those results? Yes. We're gonna see them a heck of a lot sooner than ever before because we're now taking those customers live here shortly.

Gary Brode
Managing Partner at Deep Knowledge Investing

Okay. So if if you do go live within the next day, week, something like that, there will be revenue in this quarter, the third quarter related to that?

Rhon Daguro
Rhon Daguro
CEO & Director at authID

If transactions are being called, which we hope they will be, if transactions being called, they should be billed, we should be able to invoice.

Ed Sellitto
Ed Sellitto
CFO at authID

Once we go live, just to reiterate, once we go live, we will start to recognize the contractual commitment portion of the contract as we as we normally do.

Gary Brode
Managing Partner at Deep Knowledge Investing

Alright, guys. That's very helpful. I do have more questions, but I don't wanna monopolize the call. Why don't you see if other people have questions? And I'll, you know, hit 11 after and get back in line.

Ed Sellitto
Ed Sellitto
CFO at authID

Thanks, Gary.

Operator

Thank you. And as a reminder, to ask a question, please press 11 on your telephone. Our next question comes from Gary Brody with Deep Knowledge Investing. You may proceed.

Gary Brode
Managing Partner at Deep Knowledge Investing

Okay. Well, glad to be back. Can we talk about the Indian contract that you guys signed last November? Have you started providing services, or are you still in ramp up condition with the company?

Rhon Daguro
Rhon Daguro
CEO & Director at authID

We are working with them, and we're still we're still ramping, but we are we are we are engaged with them. Yes. Okay.

Gary Brode
Managing Partner at Deep Knowledge Investing

So you're working on it that hasn't gone live yet. Is that right?

Rhon Daguro
Rhon Daguro
CEO & Director at authID

That's right.

Gary Brode
Managing Partner at Deep Knowledge Investing

Okay. And that I'm assuming then that you haven't recognized revenue from them at this point. Is that right?

Ed Sellitto
Ed Sellitto
CFO at authID

I'll just clarify Ron's comment. We we are still ramping them, but we did we did go live and and deliver the service to to the customer.

Gary Brode
Managing Partner at Deep Knowledge Investing

Okay. So have you sorry, go ahead.

Ed Sellitto
Ed Sellitto
CFO at authID

Yeah. No, I just wanted to clarify that. Sorry, Derek. Go ahead.

Gary Brode
Managing Partner at Deep Knowledge Investing

Thanks, Ed. So thank you. So have you started collecting revenue from them yet?

Ed Sellitto
Ed Sellitto
CFO at authID

Yes. Yes. We are we are recognizing started to recognize revenue as we went live with the customer. That's right.

Gary Brode
Managing Partner at Deep Knowledge Investing

Okay. That's great. And then when you announced the deal, I believe there was a provision in there that you're supposed to collect $3,300,000 of revenue each year, twenty five, twenty six, twenty seven. Given that you didn't start collecting revenue at the beginning of the year from them, understandably, there's no way you're gonna be able to launch in two months. Do you still expect to collect the $3,300,000 from them this year that you discussed was a contractual obligation before?

Ed Sellitto
Ed Sellitto
CFO at authID

Yes. So, said differently, we do recognize in the first contract year, given that there's a delay in go live for contracts of any kind, if we have a commitment for the first year, we do recognize that commitment throughout the remainder of the first contract year. So, if it's several, a month or two or more that's not recognized, we'll recognize it in the balance of the first contract year. We would, by the end of contract year one, we would have recognized the first year's worth of commitment.

Gary Brode
Managing Partner at Deep Knowledge Investing

Okay. Ed, I just want to clarify something there because I got a little confused with it. If the contractual obligation is 3,300,000.0, and I'm just gonna say for the purposes of this conversation, I'm not trying to back in a corner, but let's just say, hypothetically, you guys started collecting revenue July 1. Does that mean you expect to collect $3,300,000 from that contract this calendar year or half of that because you'll have been collecting revenue for half the year?

Ed Sellitto
Ed Sellitto
CFO at authID

We would recognize all of it in the first contract year, and we would just recognize it in the period between when they start to go live and when the contract year ends.

Gary Brode
Managing Partner at Deep Knowledge Investing

Got it. Okay. So basically, you are anticipating collecting $3,300,000 from this contract in the second half of this year?

Ed Sellitto
Ed Sellitto
CFO at authID

Yes. That's a fair inference. Yeah.

Gary Brode
Managing Partner at Deep Knowledge Investing

Okay. Well, that's that's incredible given the revenue number you guys just posted. That's really good news. Okay. And then on the NEC deal, I I know with IDX, the implications are enormous.

Gary Brode
Managing Partner at Deep Knowledge Investing

Are you guys able to talk at all about a booking estimate, a guaranteed minimum revenue, term of the contract, or when you might start providing services or collecting revenue? Can you give us any detail on any other thing?

Rhon Daguro
Rhon Daguro
CEO & Director at authID

Yeah. I'll take that. Unfortunately, not at this time. So we just released the product. We have the, we have the technology, looking to go into certain customers for a pilot, and we're trying to still flush that all out and trying to even understand the deal cycle and deal motion and what the what the pricing terms are.

Rhon Daguro
Rhon Daguro
CEO & Director at authID

We don't have that all flushed out. I do have my own ambitious goals that I wanna achieve, but I need to put some more form formula behind that. And so we'll we'll share that as soon as we can, but very, very excited to to get to that point here shortly.

Gary Brode
Managing Partner at Deep Knowledge Investing

Okay. Then let me ask the question in a different way. You guys are at 2,200,000.0 in bookings so far this year, and I believe that includes the approved deal. And then you got the YeniQ deal with an unspecified number, and then you talked about a, UK Fortune 500 retailer or a Fortune 500 international benefits company. Are you still comfortable with the $18,000,000 of bookings you talked about the last couple of quarters?

Rhon Daguro
Rhon Daguro
CEO & Director at authID

Yeah. Absolutely. Absolutely.

Gary Brode
Managing Partner at Deep Knowledge Investing

Okay. Got it. And then the last question I've got for you is, I know last year you guys had some delays and spent a lot of time and money upgrading the software to enterprise capable. Is it reasonable to assume with the approved deal and the NEC deal that that work is done to a level that you're satisfied with, or is there still more to do?

Rhon Daguro
Rhon Daguro
CEO & Director at authID

It's done to the level where we can win deals, but there's definitely more to do. And so we're learning more as we go into these larger enterprise opportunities to see what adjustments and stuff we need to make, but it's not nowhere near the major overhaul that was required to release basically two brand new products, two brand new SKUs into the marketplace. It's tough to just do one, but to do two in in such a a short period of time is obviously really tough. But at the same time, it was what our customers needed and wanted, and nobody was fulfilling it. So we're we we we think we made the right adjustments.

Rhon Daguro
Rhon Daguro
CEO & Director at authID

I know we made the right adjustments, and that's how we're able to, enter these these particular large opportunities and and have a really high probability of winning them.

Gary Brode
Managing Partner at Deep Knowledge Investing

Okay. So you're more in the kind of normal r and d phase as opposed to the, oh, crap. We have to overhaul the whole thing phase where you were last year.

Rhon Daguro
Rhon Daguro
CEO & Director at authID

I like the way you worded it, but, yes, it's it's not the, holy crap anymore. It's it's a, hey. This is working. It's stable. Like, one of the things we described in my comments was we were in these pilots and POCs, and now we're advancing past them.

Rhon Daguro
Rhon Daguro
CEO & Director at authID

That's that's because the product has been, showing very, very effective for our customers and clients. If those pilots did not go the way they needed to go, then obviously, we'd be in a different situation as opposed to moving to, finalizing and then moving things to longer term relationships with these customers. So if the product is working very well, in that regard, but we're absolutely not slowing down on innovation and improving the product sets. Just like for privacy key, you know, we wanted that one to 1,000,000,000 false match rate. We wanted that twenty two milliseconds authentication.

Rhon Daguro
Rhon Daguro
CEO & Director at authID

We wanted, all that speed. And then our customer said we want to also scan thousands of faces, and we want you to pinpoint Gary's face out of this entire population. Can you do it? And, of course, we weren't gonna say no. So we did.

Rhon Daguro
Rhon Daguro
CEO & Director at authID

We did it, and we delivered it, and the customers were happy.

Gary Brode
Managing Partner at Deep Knowledge Investing

Got it. Okay. Thanks for the clear straightforward answers, both you and Ed. Again, I'll step back and let somebody else ask questions. Thank you.

Operator

Thank you. Our next question comes from Dean Cedercookis with DeCA Capital. You may proceed.

Analyst

Hi, congratulations on the quarter. It looks like you're making good progress. I was wondering if you could elaborate on the pilots. It would be nice to have some idea of the scope. Can you comment on that?

Analyst

You know, how many customers or employees are part of some of these pilots? That's one. And then number two, how quickly can these get scaled up? What's the go live process and the time to revenue compared with the normal, you know, twelve to eighteen months? How short is it once you sign a contract with these that you've already piloted to actually going live and getting revenue?

Rhon Daguro
Rhon Daguro
CEO & Director at authID

I'm just trying to remember all those parts, Dean. So thank you for the question. This is a business area that I'm I'm super fired up about. Because right now, when we were doing traditional, let's say, sales motion with large enterprises, they have a committee that says, hey, you need to go through vendor supplier. And then what we need to do is put you in a sandbox.

Rhon Daguro
Rhon Daguro
CEO & Director at authID

And then we're gonna do a proof of concept with maybe five to 10 users. We're gonna probably run a couple tools, make sure you don't crash. And then based off of the POC results, which is usually unlimited data, they're gonna go ahead and make a decision, and they'll either go for off ID or not. And we've been successful with those POCs, but that time period can go anywhere between, you know, three to six to nine months, just because you're in a large enterprise. We made a change, and I know and and I want to take full credit for it, but I also want to recognize what's happening in the marketplace.

Rhon Daguro
Rhon Daguro
CEO & Director at authID

The marketplace has been very good to us with AI causing all kinds of problems and havoc. And so for these companies to evaluate the technology faster, instead of doing that POC that I just described, they're saying, hey, you know what, instead of putting you in a sandbox, let's put you in the real production live environment. Let's put you in full blown production live environment on live data centers that are that are operating our current existing systems today. But what we'll do for the test, instead of rolling it out to, let's say, a 100% of the population within that organization, we're gonna roll it out to 1%, then 5%, then 10%. And so right now, for our customers, that could be, you know, tens of thousands of people, which is why we're we're pretty fired up.

Rhon Daguro
Rhon Daguro
CEO & Director at authID

And when they see the performance live, that means that if they want to move forward with off ID, it's a flip of the switch to go live. And it's a flip of the switch for us to go time to revenue. And it's a flip of the switch for us to be able to not have to worry about, you know, making sure the integrations work, all the testing work or any of that stuff. So for us, that's the right way to go. We've been trying that we've been successful.

Rhon Daguro
Rhon Daguro
CEO & Director at authID

We don't know if that's gonna be the standard moving forward, but heck, we're gonna darn try. But it does require our team to be 100% staffed for that customer upfront on the deal as opposed to typically they're 100% staffed after we close the deal. Because if we have a forecast to close the deal, we then know how to staff up and ramp up. But if we're trying to put all these resources in the beginning, it's gonna be a lot tougher. We're gonna spend a little bit more money, but we're we're finding that that's the faster way for time to revenue.

Rhon Daguro
Rhon Daguro
CEO & Director at authID

So we're, sorry for the long winded answer, but we're figuring that out. But we believe the shift to pilots is gonna be a good way for us to go to a time to revenue faster.

Analyst

That's great. So what it sounds like is you've done a lot of the plumbing work already that you would normally have done over that twelve month period or even more in some cases to get to the full bar number.

Rhon Daguro
Rhon Daguro
CEO & Director at authID

You nailed it. You absolutely nailed it. That those pieces and areas where y'all have been asking us to figure out how to go live faster. This was one of those key ways, that allowed it to happen. And, again, I like to take full credit for it, but no.

Rhon Daguro
Rhon Daguro
CEO & Director at authID

Because a lot of our customers are getting hit right now, and they don't have that time to do the POC way. They need to figure it out now. So, that so we so I think in combination of AI rising, so if the bet is AI is gonna get better and better and better to help these fraudsters perform more damage faster and faster and faster, we should be able to accelerate our side. So the danger on our side is do we we have to staff up. And so we have to be able to make sure that we can do that and do that and predict that and, again, be mindful of our spending, but that is a shift in our process.

Rhon Daguro
Rhon Daguro
CEO & Director at authID

And it may require, hopefully not, but it may require a little bit more resources upfront.

Analyst

Okay, well, was gonna be my next question. Actually because

Rhon Daguro
Rhon Daguro
CEO & Director at authID

you're asking about scale, Yeah,

Analyst

that is, I mean, it sounds like you're on the cusp of being able to really get some revenue in here or at least convert this to real ARR very quickly between these pilots converting to contracts and going to revenue much faster. And number two, the prove deal, and this without even really getting into the NEC deal, which sounds huge, but a little earlier stage. And are but are you also in pilot with anybody with that technology or not really yet?

Rhon Daguro
Rhon Daguro
CEO & Director at authID

On the so okay. So there there there are two parts there, but I'll I'll answer the last one. On on the idea on the IDX side with with with NEC, We're not yet, but we're moving into those. And so we're we're working diligently on that. But, another, I guess I guess that when you're when you're talking about prove, were you asking whether we're integrated there? Because I'm not sure.

Analyst

Well, my understanding, or at least my interpretation is that that could be almost plug and play with the approved customer database that's already there since you, I think I heard, have essentially integrated with their system? Or I don't want to put words in your mouth. That was just my interpretation.

Rhon Daguro
Rhon Daguro
CEO & Director at authID

Yeah. Yeah. Let me let me go back. So like, so with prove it's like a two part partnership. Part one is is our stuff that works today out of the box.

Rhon Daguro
Rhon Daguro
CEO & Director at authID

And their current customers right now prove doesn't do what off ID does. So they're so the proof customers can benefit from the off ID technology through the proof platform so that that that they can take advantage of that today. And that's what's go about to go live hopefully soon. The longer term strategy for prove is to incorporate biometrics inside their entire core platform, essentially like an OEM. And so that has not been completed yet.

Rhon Daguro
Rhon Daguro
CEO & Director at authID

We're still working on that with them. And, again, I'm not gonna reveal their strategy with that. But from a from a biometric perspective, we we are working with prove to be their their core biometric technology.

Analyst

Okay. Well, thank you. I think that's all I have for now.

Operator

Thank you. Our next question comes from Kelsey Jones with Verana Capital. You may proceed.

Philip Broenniman
Managing Partner & Portfolio Manager at Varana Capital

Oh, it's not Kelsey Jones, it's Phil Brennaman. Kelsey works with me. My question, hey Ron, very interesting quarter clearly. My question, I'm not one who typically ask questions, but I think the question I have is probably a little bit on the forefront of many investors minds. I'm gonna put it out there and see what your response is on behalf of, I guess, all of us.

Philip Broenniman
Managing Partner & Portfolio Manager at Varana Capital

First, shout out to Gary Broad for helping open up the conversation here, asking good astute questions. So your organization, you and your team have received a fair bit of criticism about the communication or kind of lack thereof evidenced by the company. And even while understanding that there is tension between your counterparts, your clients and what you can reveal versus what we want to know as investors. Have you guys given some thought about how to upgrade the paradigm? So we don't feel so, you know, bluntly kind of completely lost by rather anodyne press releases?

Rhon Daguro
Rhon Daguro
CEO & Director at authID

Yeah, absolutely. Thank you, Phil. And I appreciate the question. And certainly empathetic to the request. And so what we've done internally is we've set a process where we know that there's a blackout period, which then the investors don't know about that.

Rhon Daguro
Rhon Daguro
CEO & Director at authID

And then we haven't set up time to speak with investors in a dedicated way. So either the investors reach out sporadically to to the leadership team. We then have to figure out how to work that into a schedule because the leadership team is is is very, we're over we're over we're over strapped here. We're overworked and and, hopefully you can appreciate that. And so sometimes we can't respond in a way in an ad hoc moment.

Rhon Daguro
Rhon Daguro
CEO & Director at authID

So what we are going to do and what we started to do after this call is that we are reaching out to those folks who have asked questions in the past. We could not answer due to the blackout period for our internal policy, and we are reaching out. We're scheduling time for with people like yourself in a dedicated way where you can spend an intimate time with me and the leadership team to ask questions and get more more details for for the questions you have as opposed to kinda like this, you know, reach out whenever you you wanna reach out and and then hopefully we respond whenever we can. And and and maybe we respond quickly. Maybe we don't respond depending on what the time period is, whether it's a blackout or not.

Rhon Daguro
Rhon Daguro
CEO & Director at authID

So we wanna schedule the time with you all, and and then have a better cadence in that way. So it's more predictable. And then I I could actually spend more intimate time with you when I'm not in a blackout period and answer your questions. So we're we're hoping that will will alleviate that.

Philip Broenniman
Managing Partner & Portfolio Manager at Varana Capital

Some of that is it will be helpful, but bluntly, spending a lot of time answering my questions doesn't help the business grow. So I'm not really interested in taking you away too much from your primary duties. I'm speaking more to the press release communications. The information that's provided in these press releases that were all scrutinizing probably too closely, but nonetheless, it's all we have traditionally gotten. They tend to be quite bereft of helpful insights.

Philip Broenniman
Managing Partner & Portfolio Manager at Varana Capital

That's what I'm really speaking to. I would love to hear the dulcet tones of your voice more often, but really for everyone's benefit, how do we get more information in these press releases so people can feel at least somewhat satisfied that things are progressing nicely other than, hey, we have this and we're not gonna tell you what it is. So just take our word for it.

Rhon Daguro
Rhon Daguro
CEO & Director at authID

Phil, if if my customers would allow me to tell you the details of the contract for the financial terms that you're looking for so that you can make an investment, I would tell you this. Our customers will not let us do that. So to the point where we can get that information so that we can share, we're gonna work really hard to get you that get get you what you need while making sure that we adhere to our customers' privacy.

Philip Broenniman
Managing Partner & Portfolio Manager at Varana Capital

Well, I understand. There's obviously tension on the other side. I would just ask you guys to pay as much attention to providing that additional information as you can. So with that, I'll let it go. I'm sure Gary is back in the queue, and I'd like to hear what he asks. Thank you.

Operator

Thank you. At this time, this concludes our question and answer session. I would now like to turn the call back over to Mr. DeGuro for any closing remarks.

Rhon Daguro
Rhon Daguro
CEO & Director at authID

Well, thank you, everyone, and and certainly thank you for the question. Thank you for listening today. If you have any further questions about our progress like I talked about earlier, definitely reach out to investor.relations@authid.ai. Would like to would would gladly set up time to be able to answer any additional questions that came from this call or post call that we didn't answer. And if not, we look forward to speaking more with you when we report our third quarter results in November. Thank you, everyone.

Operator

Thank you. Ladies and gentlemen, this does conclude today's teleconference.

Executives
    • Graham Arad
      Graham Arad
      General Counsel
    • Rhon Daguro
      Rhon Daguro
      CEO & Director
    • Ed Sellitto
      Ed Sellitto
      CFO
Analysts
    • Gary Brode
      Managing Partner at Deep Knowledge Investing
    • Analyst
    • Philip Broenniman
      Managing Partner & Portfolio Manager at Varana Capital
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