Craig Herman: Absolute? I’m hearing you speak more generally regarding our approach to targeting, our targeting is really twofold based on geography and industry vertical. We have worked hard to establish a foothold in LatAm, North America and the Middle East. Based on geography, we focus on relevant industry verticals for the region. For example, as you know, financial services a target in LatAm and the Middle East. We’ve shared gaming as a target across all our target geographies. Of course, we have our government cost targets to build on strong foundations in North America and Europe as well. We continue to disrupt the law enforcement space in the US with our Aware Avis offer. We are planning to maintain our position and look to grow in a number of other verticals here in North America and around the world through our partner ecosystem and direct.
Matt Glover: David, Bob mentioned that you further reduced annual operating costs by more than $1 million in Q1 2024. What can you tell us about the recurring operating costs you anticipate?
David Traverse: Thanks, Matt. So, we continue to be focused on revenue growth and really specifically the recurring revenue that Bob mentioned earlier. But we also need — we’re also maintaining kind of the discipline in our spending. So with the changes we’ve made in the past few quarters, we’ll continue to drive towards profitability based on the timing of the actions over the past few quarters, including some that we made in the first quarter of 2024, we should begin to see the cost savings benefits of that million that Bob talked about in the second quarter of this year. And that was in addition to some of the cost saving initiatives we didn’t have second half of last year.
Matt Glover: Thanks, David. Craig, what can you share about legacy customer conversions?
Craig Herman: Sure. You know, first let’s start with me be really clear that we are actively looking to add new logos to our customer base and partner ecosystem. That said, as we emphasize our subscription first business model, our primary focus was on expanding our recurring revenue streams. During 2023, we intensified our efforts in this regard by leveraging our newly formed customer success model. Our team is the perfect position to show our customers, the advantage of a subscription-based model versus license. Feedback has been positive in all size and we are having increasing success converting legacy customers to subscription models. This brings more predictability for us, as well as our customers. In one example during the fourth quarter, we converted a significant legacy OEM to an annual subscription, which will continue to help minimize quarter-to-quarter fluctuations.
In 2024, we are incentivizing our teams to drive additional subscription revenue and take advantage of our cloud offer.
Matt Glover: Another one for you Craig. Last quarter you brought in or revenue operations expert. What changes has this had on the company’s sales process?
Craig Herman: You got it. I talked a bit about rev ops person earlier. And in Q4, we brought — we brought her in to help focus on upgrading our sales technology and processes to give us a 360 degree view of our customers. The impact so far has been tremendous. The advantages but all members of Aware can now see what is happening with our customers and partners in near real-time. We have also been focused on marketing to sales lead flow process and handoff which is critical for our growing business. This again is a combination of process and technology to ensure that we can track leads from first touch to close one opportunities. This visibility and the corresponding KPIs give us the ability to invest and focus in specific areas of the funnel to improve our follow-up, messaging and overall impact through throughout our lead funnel.
Matt Glover: And Craig, from a technology perspective, what areas are you focused on in 2024?
Craig Herman: We continually advance Aware’s technology by adapting to and anticipating market demands. Following numerous product enhancements this year, we are confident in the robustness of our industry-recognized biometric identity platform, capable of effectively addressing current challenges while maintaining top tier security and enhancing user experience. We are poised to further expand our reach and product adoption of our industry’s recognized biometric identity platform family of offerings through the introduction of bespoke tools tailored to the unique requirements of our target sectors. These include financial services, gaining access control and online certification and testing.
Matt Glover: Thanks, Craig. Our next question, could you see a positive impact to your business based on any of the proposed or potential solutions to the border and illegal immigration problem?
Craig Herman: Absolutely. This is where we’ve had global experience with this and it is hitting home more right now. But we have worked with a global government as well as the US government and where we saw other areas where there was a large influx of immigrants, we see transactions spike up. So the need for additional services, additional technology as well as our usage-based pricing which is based on transaction also goes up. So yes, this will have — typically will have an impact on our bottom line.
Matt Glover: Thank you, Craig. At this time this concludes our question-and-answer session. If your question wasn’t answered please e-mail Aware’s IR team at awre@gateway-grp.com. I’d now like to turn the call back over to Bob for closing remarks.
