David Traverse: I will take that one. Dave Barcelo’s departure from the company is not the result of any dispute or disagreement on any matter. As Bob mentioned earlier, we are thankful for all of Dave’s leadership during these past 3 years. We do anticipate incurring some one-time severance costs, which will be reflected in our Q4 and full year 2023 results. However, we still remain on track to exit the year due to operating cash flow.
Matt Glover: Thanks David. A question for Craig, over the past couple of quarters, you have announced a few product enhancements. How are you picturing the evolution of Aware’s technology?
Craig Herman: Sure. Aware’s technology is primarily driven by our ability to both predict and adapt to the market’s needs. Right now, we are focused on three trends in this market. The first being increased adoption of cloud-based solutions. Two, cross-platform mobile support. And finally, greater interest in deep learning and AI. By focusing on these three areas, we can tailor our technology to be easily and rapidly deployable for any emerging use case or changes in the market. Following the pandemic, digital crime became more advanced and widespread.
Matt Glover: Thanks Craig. Another one for you, you have mentioned in previous calls that you are focused on growing the commercial side of the business, what progress have you made?
Craig Herman: Yes. So, as we talked about earlier, Aware’s strong reputation in the government space has been generating momentum for the company on the commercial side. The confidence government agencies, especially those in larger governments like the U.S. and Europe, have in our technology is starting conversations with larger, more recognizable brands, which we can then leverage to accelerate our breakthrough into the commercial space.
Matt Glover: Next question, Bob, there was a significant improvement in operating cash flow compared to last year. What drove this?
Bob Eckel: Well, thanks Matt. And I think this improvement in cash flow really, it boils down to our persistent execution of our growth strategy and our cost structure optimization efforts. We have been working on optimizing our costs, as you know. And we continue to ramp adoption for all the solutions and really driving for a leaner operational model. Through our recent product enhancements Craig was talking about earlier and we have been talking about in the press releases, with the launch of our formal partnership ecosystem, we have really expanded our technologies use cases and made it more accessible to more of the population. So, the upgrades we have rolled out this year to Knomi and AwareID enabled our partners and sales team to go-to-market with more versatile, secure, easy-to-use solutions, and that resulted in increased sales and up-selling.
Additionally, the view of our formal partner ecosystem and pricing tiers now allows organizations of all sizes from start-ups to global enterprises to adopt Aware’s technology. And lastly, our partnership program really maximized the potential reach of our current and future partnerships without significantly increasing our go-to-market costs.
Matt Glover: Thanks Bob. Our next question, Aware spoke with the CIO of Banca Decebal [ph] at Identity Week America last month. How has the partnership evolved over the years? And what impact has the relationship had in terms of other opportunities for Aware?
Craig Herman: Sure. Banca Decebal, it was one of the pioneers in the Brazilian financial sector. To incorporate biometrics and has for the past 7 years, they used Knomi to validate account access and credit applications for their customers. Since deploying Knomi, the bank has had very low levels of fraud even with the number of transactions increasing nearly ten-fold in the last 5 years and the recent evolution of criminal activity. Digital crime has become more advanced and widespread throughout Brazil as technology became an integral part of everyday life. This increase in online fraud and digitization has created opportunities for Aware to gain market share in sectors like e-commerce, sporting events, etcetera. Moreover, Aware’s success to warding a new malware designed to attack banks like Banca Decebal could translate into additional opportunities within the global financial sector as the software is now being exported to the United States and Europe.
