authID (AUID) Q4 2025 Earnings Transcript

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Date

Tuesday, March 31, 2026 at 5 p.m. ET

Call participants

• Chief Executive Officer — Rhoniel Daguro
• Chief Financial Officer — Ed Sellitto
• General Counsel — Graham Arad

Takeaways

• Total Revenue -- $0.4 million for the quarter, representing 2x growth compared to the prior year’s $0.2 million, per CFO Ed Sellitto.
• Full-Year Revenue -- $2.0 million, up 129% from $0.9 million in the prior year, driven by new enterprise customers going live.
• GAAP Operating Expenses -- $4.5 million for the quarter, down from $4.9 million in the prior-year quarter; full year expenses were $20.2 million, up from $15.6 million, due to expanded sales, R&D investment, sales shares issued, and a $0.8 million credit loss expense.
• Net Loss -- $4.0 million for the quarter ($1.1 million noncash), compared to $4.6 million prior-year ($0.6 million noncash); full-year net loss was $17.9 million ($3.8 million noncash), compared to $14.3 million ($2.8 million noncash).
• Net Loss per Share -- $0.28 quarterly, improved from $0.42 prior-year; full-year net loss per share was $1.38 versus $1.40.
• Remaining Performance Obligation (RPO) -- $2.2 million at year end, down $1.4 million sequentially due to reduced contracted minimums from a customer with delayed growth; RPO was $14.3 million at the prior year-end, primarily affected by previously discussed contract issues.
• Adjusted EBITDA Loss -- $3.0 million for the quarter versus $4.1 million prior-year; full-year adjusted EBITDA loss was $14.4 million, up from $11.9 million.
• Annual Recurring Revenue (ARR) -- $1.8 million as of quarter-end, up from $1.7 million in Q3 and $0.8 million prior-year, reflecting successful enterprise adoption.
• Booked Annual Recurring Revenue (bARR) -- $0.1 million in the quarter, down from $7.1 million prior-year due to termination of a major 2024 deal; full-year bARR was $2.4 million versus $9.0 million in 2024, split as $1.1 million committed and $1.4 million usage above commitments.
• Production Agreement Highlight -- The company signed a full production deployment with a top 20 global retailer utilizing the PrivacyKey technology, including a contractual expansion pathway.
• Major ecosystem expansion -- authID (NASDAQ:AUID) announced a partnership embedding its technology within MajorKey Technologies and the Microsoft (NASDAQ:MSFT) Entra Suite channel, resulting in a new jointly launched product, IDProof+.
• New fintech distribution -- Agreement reached with a platform powering over 100 banks, enabling broad reach to U.S. financial institutions through a single integration.
• Privately recognized technology -- PrivacyKey named Best Digital Trust solution for ID verification at the 2025 PayTech Awards, providing independent industry validation.
• Mandate framework launch -- The company introduced its authID Mandate solution in November, providing biometric-anchored AI agent governance, real-time monitoring, and a tamper-evident audit trail.
• NVIDIA Connect program acceptance -- NVIDIA (NASDAQ:NVDA) Connect program for AI and machine learning acceleration, supporting GPU-powered biometric and policy application development, now includes authID.
• Active pipeline -- The CEO reported a pipeline exceeding $30 million in active enterprise engagements including advanced sales cycles and proof-of-concept phases.
• Recent strategic integrations -- Integration with ServiceNow (NYSE:NOW) Store enables access to over 8,400 contact centers globally, including most Fortune 500 companies.
• OEM and new platform partnerships -- Announced an OEM agreement with a reusable identity and background platform and disclosed near-finalization of contracts with additional industry solution providers.
• Sales cycle commentary -- Sales cycles for large enterprise deals are materially longer than previously projected, which delayed revenue and bARR realization.
• Underlying revenue trend -- The company stated that core business revenue from "customers who are live, ramping and paying grew substantially," after removing one-time accounting impacts.

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Risks

• CFO Ed Sellitto reported, "our total RPO was $2.2 million, a decrease of $1.4 million versus last quarter," citing reduction in contracted minimum fees due to a customer’s delayed business growth.
• Full-year bARR fell to $2.4 million from $9.0 million because "The decrease in bARR for the quarter reflects continued longer sales cycles associated with our enterprise deals."
• Two "early large engagements underperformed," resulting in combined revenue concessions of approximately $884,000, and the company is not recognizing further revenue from these contracts until terms are revised.
• The full-year net loss increased to $17.9 million from $14.3 million, attributed to larger operating expenses including headcount growth and noncash charges.

Summary

authID (NASDAQ:AUID) reported significant full-year revenue growth and expansion of high-profile enterprise partnerships, while acknowledging the negative impact of prolonged sales cycles and past customer setbacks on bookings and performance obligations. The company disclosed a full production win with a major global retailer, ecosystem access through partnerships with MajorKey Technologies and Microsoft, and strategic integrations with platforms such as ServiceNow. The introduction of proprietary products like PrivacyKey and the Mandate framework, combined with NVIDIA Connect program acceptance, were positioned as differentiators in AI-governed identity. Management highlighted a $30 million deal pipeline and affirmed stabilization of operating expenses, but also indicated that recognized bARR and RPO remain below prior-year levels due to delayed customer ramp and earlier contract attrition.

• CEO Rhoniel Daguro emphasized that marquee organizations across multiple sectors are actively evaluating authID, describing current prospect engagement levels as a "pivotal moment" for the company.
• The call detailed that enterprise Go-Lives, not pilots or proofs of concept, drove measurable ARR increases, indicating real customer deployment beyond test phases.
• Financial improvement was reflected in sequentially lower operating expenses and a smaller net loss per share post-expense stabilization, though overall net loss rose on an annual basis.
• Recent integrations and platform wins are intended to accelerate future penetration into Fortune 500 and major financial organizations, leveraging established technology ecosystems.

Industry glossary

• IDaaS: Identity as a Service; a cloud-based offering providing scalable, on-demand digital identity management including authentication and verification.
• PrivacyKey: authID’s enterprise biometric authentication solution that does not store biometric templates, designed for secure identity verification and password reset processes.
• bARR: Booked Annual Recurring Revenue; projected ARR from all signed contracts, including committed revenue plus estimated overages, calculated over an 18-month forward horizon post-signing.
• cARR: Committed Annual Recurring Revenue; portion of bARR representing contractually committed minimum recurring revenue excluding usage-based upsell components.
• RPO: Remaining Performance Obligation; the minimum revenue expected from signed contracts based on contractual commitments not yet recognized as revenue.
• Mandate: authID’s governance policy and technical solution for binding AI agents to verified human oversight, anchoring agent activity to biometric-verified sponsors with tamper-evident audit trails.

Full Conference Call Transcript

Operator: Good day, and thank you for standing by. Welcome to the authID Q4 and Full Year 2025 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker for today, Graham Arad, General Counsel. Please go ahead.

Graham Arad: Thank you, operator. Greetings, and good afternoon. This is Graham Arad, General Counsel of authID. Welcome to the authID Fourth Quarter and Full Year 2025 Results Conference Call. As a reminder, this conference is being recorded. Joining me on today's call are our CEO, Rhon Daguro; and our CFO, Ed Sellitto. By now, you should have access to today's press release announcing our fourth quarter and full year 2025 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. 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.

Others are discussed in our Form 10-K for the fiscal year ended December 31, 2025, and other filings, which are made available at www.sec.gov. I'd now like to introduce our CEO, Rhon Daguro.

Rhoniel Daguro: Thank you, Graham, and thank you all for joining us today. I want to start by saying that I am incredibly excited about the market interest in authID and its technology. What is happening around this company right now and what I get to share with you today, I believe is a pivotal moment for authID. Let me tell you why. Over the past year, there were major shifts in our market. The world woke up to identity, not the theoretical version of identity security that people have talked about for years, but the real urgent boardroom level version with the top 2 issues that are keeping CEOs up at night.

Issue number one, the rise of deepfakes to trick existing authentication systems; and issue number two, the rise of rogue AI agents accessing systems without human accountability and without human control. The most amazing part about this problem is that these companies are reaching out to authID for a solution, companies that are some of the most powerful, most recognized, most consequential organizations on the planet. We are talking about the companies that define entire industries, companies that manage more assets, more transactions and more users than many countries have citizens. These are companies that, frankly, a year ago, existed in a universe we had no access to, getting a meeting with them was a dream.

And today, they are calling us. They are not just asking questions. They want to see what our technology can do. They want RFPs completed. They want demos. They want to do full-blown proof of concepts. They want to explore deeper partnerships. Pick any major industry, financial services, professional services, technology, retail, health care, and I can tell you, we are in active conversations with one or more of the top players in that space. Every single one of them has the same problem. And every single one of them is increasingly convinced that authID has the solution. I can't name them today for contractual confidentiality reasons.

And believe me, I wish I could because the names would speak for themselves. But I want to be very clear, these are not casual conversations. These are serious advanced engagements with organizations that do not waste their time. The fact that they are in the room with us, the fact that authID has earned a seat at the table with some of the most sophisticated enterprises in the world tells you everything you need to know about the quality of our technology. That's the backdrop for everything I'm going to share with you today. Now let me get into specifics.

Let me walk you through what we signed and announced in 2025 because the published wins are significant in their own right. We announced a full production agreement with one of the top 20 retailers in the world, a major European retail chain with a global footprint. And I want to be precise about something here. This is not a pilot. This is not a proof of concept. This is a live production deployment of our PrivacyKey technology, securing the identity verification and password reset system for their workforce, their back-office staff, their call centers. And the agreement includes a contractual pathway to expand this deployment into their retail stores worldwide.

One of the largest retailers on Earth evaluated every option available in the market and chose authID. That is meaningful. We announced a partnership with MajorKey Technologies, one of the most respected identity security firms in the Microsoft ecosystem, a certified Microsoft Entra Suite services partner. Through this collaboration, authID's proof technology is now being brought to the Microsoft customers globally. And MajorKey launched IDProof+, a product built in direct collaboration with authID to deliver high assurance biometric identity verification into the Microsoft environment. Think about what that means for distribution. 18 months ago, we could not access the Microsoft channel. Today, we're embedded in it.

We continue to expand our partnership with NESIC, a subsidiary of NEC Corporation, a $20 billion global technology company. Phase 1 of our multiphase strategy with NESIC is live embedding authID inside their Symphonict Trust platform for identity verification and employee onboarding. And together, we launched IDX, a platform that provides enterprise-grade identity assurance for distributed workforces, supply chain and now AI agents. We signed an agreement with a fintech platform that powers more than 100 banks, institutions with assets ranging from $10 billion to $150 billion each. This is a single contract that gives authID a path to reach an enormous network of financial institutions through one integration.

We also signed agreements with the pipeline group entering the lead generation market specifically to validate remote workforce for onboarding, continuous authentication and account recovery; and with an international bank for identity onboarding, verification and authentication. Across every one of these wins, the message is the same. The world's most demanding enterprise customers are choosing authID. This is because of our proprietary technology that we spent over 2 years rebuilding from the ground up. Let me tell you what we built in 2025 and continue to enhance at a rapid pace by leveraging the power of today's AI coding platforms because this is the foundation that is making all of these conversations possible.

The pace at which we are delivering these enhancements is growing rapidly, and we are able to achieve this now without significantly increasing our engineering headcount. I'll start with PrivacyKey, which provides biometric authentication without storing biometrics. This product is now live in production at enterprise scale and the market is recognizing it. PrivacyKey was named Best Digital Trust solution for ID verification and authentication at the 2025 PayTech Awards. That is independent validation from the payments industry that our technology is setting the standard. Next is IDX, delivering enterprise identity assurance for distributed workforces, supply chains and AI agents. This is the platform that is opening conversations we could not have 2 years ago.

And in November 2025, we unveiled the authID Mandate framework, our comprehensive governance model for Agentic AI security. I want to spend a moment on this because I think it's one of the most important things we've ever announced. Here's the problem every enterprise CEO is facing right now. They want to deploy AI agents. The business case is obvious. The efficiency gains are very real, but the accountability is not there. An AI agent operating with a phishable token or a static API key with no biometric anchor to a human being is a liability. If something goes wrong, a fraudulent transaction, a data breach, a compliance violation who is responsible?

The answer today for most enterprises is no one. In 2026, with the launch of OpenClaw, CEOs are now faced with an even bigger challenge, AI agents representing employees. Mandate solves this. It binds every AI agent to a verified human sponsor using biometric anchored identity. It defines what the agent is authorized to do, monitors everything in real time and produces a tamper-evident audit trail for every action. And in November, we were accepted in the NVIDIA Connect program, giving us access to NVIDIA's AI and machine learning frameworks to accelerate the development of our GPU-powered biometric and policy engines. We are building our new applications, leveraging the PartnerConnect ecosystem that is powering the next generation of AI.

That is exactly where we need to be. Now let me address our 2025 financials before passing it to Ed to cover the numbers in more detail. Two early large engagements underperformed. You know about both of these from the Q3 call. This is not news. The combined concessions for the full year were approximately $884,000. Those situations are behind us. The relationships remain active, and we are not recognizing further revenue from either contract until we reach resolution on revised terms. Despite this setback, our underlying revenue in Q4 was over 2x what it was a year ago, $406,000 versus $200,000. The core business, the customers who are live, ramping and paying grew substantially.

The headline net revenue number is impacted by onetime accounting adjustments that do not fully reflect the value of what we are building. Our full year gross bARR of $2.4 million came in below the $6 million revised target that I said on the Q3 call due to the sales cycles on these enterprise deals being longer than we modeled. However, the market demand for authID is high. The technology is winning, and we have a pipeline of over $30 million in active engagements with a significant number of large enterprise accounts. It takes time to close these deals and the trajectory is moving in the right direction. In 2026, our momentum is increasing.

In January, we announced our integration with ServiceNow, adding authID to the ServiceNow Store, making it successful to over 8,400 contact centers worldwide, including 85% of Fortune 500 companies. Also in January, one of the world's largest workforce solutions providers selected authID and our technology partner, TurboCheck, to protect its hiring, onboarding and daily workforce operations. In February, a U.S. point-of-sale lending platform selected authID for merchant onboarding and consumer origination. And earlier this month, we launched our platform with a fintech bringing advanced identity validation and AI deepfake authentication to over 100 financial institutions.

Beyond these exciting new announcements, we also signed an OEM partnership with a reusable identity and background screening platform, and are in the process of finalizing agreements with 2 additional platforms providing services ranging from leading identity and information solutions to industry and smart city data solutions. Before I turn it over to Ed, I want to leave you with this. The company you see today reflects the work over the last 2 years to retool, rebuild and reposition our technology as needed to meet the requirements of the marketplace, driven by strict compliance around the usage of biometrics, the accuracy required for biometrics to be 1-in-1-billion and the great dangers that Agentic AI can create.

Now our technology is more advanced. Our pipeline continues to grow with high-quality accounts. Our OEM partnerships involve critical ecosystems, and the world finally has recognized the deterministic identity problem that authID was built to solve in the new world of AI. I'll now hand it over to our CFO, Ed Sellitto, to discuss our financial results.

Ed Sellitto: Thank you, Rhon, and thank you all for joining us today. I'll now review the financial results for the fourth quarter and 2025 fiscal year. Looking at our GAAP results. Total revenue for the quarter was $0.4 million compared to $0.2 million last year. For the year, total revenue was $2.0 million compared with $0.9 million a year ago, representing a year-over-year increase of 129%. Operating expenses for Q4 were $4.5 million, down from $4.9 million last year. For the full year, operating expenses were $20.2 million compared with $15.6 million in 2024.

The 2025 year-over-year increase is primarily due to the full year impact of headcount investment in sales and R&D as we continue to execute our enterprise sales strategy as well as sales shares issued to management advisers and credit loss expense related to certain customer contracts of approximately $0.8 million. The year-over-year investment growth leveled out in the fourth quarter as we have largely held investments steady through 2025, while working to sign key enterprise clients from our pipeline. Net loss for the quarter was $4.0 million, of which noncash charges were $1.1 million compared with a net loss of $4.6 million a year ago, of which noncash charges were $0.6 million.

For the full year, net loss was $17.9 million, including $3.8 million in noncash charges. This compares with a net loss of $14.3 million for the same period last year, which included $2.8 million in noncash charges. Our net loss per share for the quarter improved to $0.28 compared with $0.42 a year ago. For the full year, net loss per share improved slightly to $1.38 compared with $1.40 last year. Turning to RPO. Our 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 December 31, 2025, our total RPO was $2.2 million, a decrease of $1.4 million versus last quarter due to a reduction of contracted minimum fees related to a customer with delayed growth in their business. This compares with an RPO of $14.3 million at the same period last year, impacted by the customer contracts discussed in Q3. We believe the RPO reductions from our earlier contracts are now fully factored in with our recent bookings from enterprise customers exhibiting much more predictability in their business and stability in our RPO going forward. We expect to resume RPO growth in 2026 as we gain traction closing additional enterprise deals in our pipeline in the coming months.

On to our non-GAAP results. Adjusted EBITDA loss was $3.0 million for Q4 compared with a $4.1 million loss for the same period last year. For the full year, adjusted EBITDA loss was $14.4 million compared with an $11.9 million loss last year. The increase in EBITDA loss for the year is primarily due to the increase in operating expenses, However, we are seeing this start to turn around in Q4 as expense stabilization and increased customer revenue are beginning to improve our bottom line. Next is annual recurring revenue, or ARR, which is defined as the amount of recurring revenue recognized during the last 3 months of the relevant period multiplied by 4.

ARR as of Q4 is $1.8 million compared to $1.7 million of ARR as of Q3 and $0.8 million for the same period last year. The year-over-year growth reflects our continued efforts to sign and go live with established market leaders including Prove Identity and the major global retailers signed this year. Turning to bARR or Booked Annual Recurring Revenue, which is the projected amount of annual recurring revenue we believe will be earned under contracted orders looking at 18 months from the date of signing of each customer contract. The gross amount of bARR signed in the fourth quarter of 2025 was $0.1 million, down from $7.1 million of gross bARR a year ago.

Our Q4 2024 bARR was driven by the large deal with our next-generation AI partner in India, which was subsequently terminated as discussed in Q3. For the full year, 2025 gross bARR was $2.4 million compared with $9.0 million in 2024. The decrease in bARR for the quarter reflects continued longer sales cycles associated with our enterprise deals as we progress through these more extensive sales conversations. As previously explained during our quarterly earnings call, bARR comprises two components, which we refer to as cARR and UAC. The 2025 cARR or Committed Annual Recurring Revenue represents $1.1 million or approximately 44% of reported bARR.

UAC or estimated Usage Above Commitments is an estimate of annual customer usage that will exceed contractual commitments. UAC represents the remaining approximate $1.4 million of 2025 bARR, approximately 56% of reported bARR. I'll conclude by revisiting our progress aligned to the revenue growth stages we report each quarter. The first milestone we use to monitor our growth is bookings, as measured by bARR. As I mentioned earlier, in 2025, we realized a total gross bARR of $2.4 million compared with $9.0 million last year. Despite this year-over-year reduction, we are seeing our momentum build, both regarding the number of new enterprise prospects in our pipeline and their progression through proof-of-concept tests and contract discussions.

While the time line for these larger enterprise deals continues to draw out longer than expected, the excitement and demand for our privacy-preserving biometric solutions is growing from our customers and prospects. We remain committed to bringing more of these deals with market-leading organizations over the finish line in 2026. The next milestone is our remaining performance obligation or RPO. Our 2025 RPO of $2.2 million is a number that we expect to climb back towards its previous levels as we move past the negative onetime adjustments from earlier customers and plan to further grow our enterprise customer base in the coming months. Our third milestone is revenue recognized in accordance with GAAP.

Our 2025 revenue of $2.0 million grew approximately $1.1 million over the same period last year as we went live with significant new enterprise customers in 2025. And as we've called out in prior earnings calls, customer retention and expansion remains an important focus of ours, particularly in establishing that our customers get value from using our solutions. We are pursuing multiple expansion opportunities with our customer base to explore new use cases and grow the scope of our usage within their organizations.

I'll end by saying that although 2025 has brought some turbulence, particularly from the earlier customers we signed back in 2023 and 2024, we've shown that despite that turbulence, we can acquire enterprise customers, deliver significant value, achieve meaningful revenue growth and position ourselves for a step change in our growth trajectory this year as we capitalize on the momentum we've built across our product development, customers and partners. With that, I'll turn it back to the operator.

Operator: [Operator Instructions] At this time, I will now turn the call back over to Rhon Daguro, CEO. Please go ahead with closing remarks.

Rhoniel Daguro: Thank you all for joining us today. If you have any further questions about our progress, please reach out to our Investor Relations team at investor-relations@authid.ai. We look forward to speaking with you again soon. Thank you.

Operator: This concludes today's program. Thank you so much for joining. You may now disconnect.

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