Ipsidy Inc Stock

Good day, and thank you for standing by. Welcome to the authID 2026 Annual Stockholders Meeting. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your speaker today, Rhon Daguro, CEO. Please go ahead.

Good morning. My name is Rhon Daguro, CEO of authID. I will be serving as Chairman for this meeting. On behalf of the company, I want to welcome you and thank you for attending this meeting of the stockholders. I would like to introduce our nonexecutive directors, Ken Jisser, Michael Koehneman, Kunal Mehta, Ram Menghani and Jacqueline White. Also with us is our General Counsel and Secretary, Graham Arad; and Chief Financial Officer, Ed Sellitto, who are in attendance on this webcast.

We will proceed with the formal business of the meeting as set out in the notice, which was sent to all stockholders. As a reminder, this meeting is being recorded. The meeting is called to order. Graham Arad, General Counsel and Corporate Secretary, will act as Secretary of this meeting.

If any stockholder has any questions about the resolutions that are to be proposed at this meeting, please post them now using the Q&A button at the top right corner of your screen, and we will address them prior to dealing with those proposals.

If you are a registered shareholder and you have not yet voted, please do so now by going to investorvote.com/AUID. You must be logged on as a stockholder with your control number in order to vote. If you are a beneficial owner of shares held in street name and you wish to vote in person at this annual meeting, you needed to have made arrangements with your broker prior to the meeting. And if you have not done so, I regret you will not be able to vote at this time.

[ Christopher Perkins ] from Computershare has been appointed as Inspector of Elections for this meeting. He has taken the customary oath of office, which will be filed with the permanent records of the meeting. Mr. Chairman?

Will the Secretary please report the number of shares outstanding and entitled to vote at this meeting?

The Board of Directors set the close of business on May 7, 2026, as the record date for stockholders entitled to vote -- entitled to notice of and to vote at this meeting. A certified list of stockholders entitled to vote at the meeting is available and may be inspected by any stockholder. As of the record date, 16,132,487 shares of common stock were outstanding, each share being entitled to 1 vote on all matters before the meeting.

Under the bylaws, 1/3 of the shares entitled to vote present or represented by proxy constitute the quorum necessary to conduct business at the annual meeting. A tally by the inspector of election indicates that a quorum is present and the meeting will proceed on that basis. A final count of the exact number of shares present will be included in the minutes of this meeting. The Secretary will summarize the business of the meeting as set forth in the notice of the meeting and proxy statement filed June 1, 2026.

This meeting has been called to consider and vote upon the election of the 6 directors, named in the notice to serve until the next Annual Meeting of Stockholders; two, to consider the ratification of Cherry Bekaert LLP as the independent auditors of the books and accounts of the company for the fiscal year ending December 31, 2026; three, to consider the approval and ratification of the adoption of the 2026 Equity Incentive Plan and an allocation of 3.5 million shares of common stock for issuance under the 2026 plan; and four, to transact such other business as may properly come before the meeting.

Directors will be elected by a plurality of the shares of common stock present and voting in person or by proxy at this meeting. A majority of the votes cast is required to approve the auditor appointment and the approval of the 2026 plan.

This meeting will take up separately each of the items of business. Mr. Secretary, have any questions been received relating to the resolutions?

No, Mr. Chairman.

The first order of business is the election of directors. I recognize Graham Arad.

On behalf of the Board, I nominate the following persons for election as directors of the company to hold office until the next Annual Meeting of Stockholders and until their successors are duly elected and qualified: Rhoniel A. Daguro, Ken Jisser, Michael L. Koehneman, Kunal Mehta, Ram Menghani and Jacqueline L. White.

I second the nominations.

As no further nominations were timely received in accordance with the bylaws, I hereby declare that nominations for directors are closed.

We will now proceed with the consideration of the remaining matters set forth in the notice of the meeting.

Mr. Chairman, I move the adoption of the following resolution: Resolve that the Board of Directors' selection of Cherry Bekaert LLP as the independent auditors to audit the books and accounts of the company for the fiscal year ending December 31, 2026, is hereby ratified and approved.

I second the motion.

Mr. Chairman, I move the adoption of the following resolution: Resolve that the 2026 Equity Incentive Plan, the 2026 plan, be and it is hereby adopted, ratified and approved and that there be allocated to and reserved for issuance under the 2026 plan, 3.5 million shares of common stock as well as, a, the balance of the shares that were not allocated to awards under the company's 2024 Equity Incentive Plan, the '24 incentive plan; and b, any shares which are forfeited or canceled under awards granted under the 2024 Incentive Plan or other prior or subsequent compensation plans or otherwise, which will become available for issuance under the 2026 plan.

I second the motion.

The polls are now closed. The votes on the election of directors and the other matters proposed to the meeting will now be tallied.

I ask the secretary to report on the vote on the proposals presented at the meeting.

Thank you, Mr. Chairman. The inspector has reported that the following nominees received the highest number of votes for election as directors: Rhoniel A. Daguro, Ken Jisser, Michael L. Koehneman, Kunal Mehta, Ram Menghani, Jacqueline L. White. More than a majority of the shares cast have been voted in favor of the ratification of the appointment of Cherry Bekaert LLP as independent auditors for the fiscal year ending December 31, 2026, as well as the approval of the 2026 Incentive Plan. The precise voting numbers will be reported in the Form 8-K to be filed following the meeting.

I therefore declare that the aforementioned directors have been elected members of the Board of Directors to hold office until the next Annual Meeting of Stockholders and until their successors are duly elected and qualified. I also declare that the stockholders have approved all the remaining resolutions proposed at the meeting.

The meeting is now adjourned, and I thank all stockholders for their support and participation in the meeting. Our next meeting with investors will be for the second quarter earnings call, which will be held in early August.

Thank you, operator.

[indiscernible] today's conference. Again, thank you for participating. You may now disconnect.

Okay. Thank you very much. Have a good day.

Good day, and thank you for standing by. Welcome to the authID First Quarter 2026 Earnings Conference Call. [Operator Instructions]. Please be advised today's conference is being recorded.

I would now like to hand the conference over to your first speaker today, Graham Arad, General Counsel. Please go ahead.

Thank you, operator. Welcome to the authID First Quarter 2026 Results Conference Call. As a reminder, this conference is being recorded. Joining me on today's call are our CEO, Ron Daguro; and our CFO, Ed Sellitto.

By now, you should have access to today's press release announcing our first quarter 2026 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-Q for the first quarter ended March 31, 2026, and other filings, which are made available at www.sec.gov.

I'd now like to introduce our CEO, Ron Daguro.

Thank you, Graham, and thank you all for joining us today. Q1 2026 represents an inflection point for authID. Rather than simply reporting incremental progress, the company executed a deliberate and multidimensional strategy, simultaneously strengthening the balance sheet, restructuring the cost base, advancing its technology and deepening its enterprise pipeline. The compounding effect of these actions is expected to materially improve our business performance across the remaining 3 quarters of fiscal 2026 and position the company for a substantially stronger entry into fiscal year 2027.

The compounding effect of these actions is expected to materially improve our business performance across the remaining 3 quarters of fiscal 2026 and position the company for a substantially stronger entry into fiscal year 2027.

In late April 2026, authID secured $4.2 million in Bridge Loan Financing, enabling the company to continue advancing its engagements with some of the largest enterprises in the world, organizations that operate on long procurement cycles and rigorous vendor evaluation. These are not sprint to close engagements. They are structured, deliberate evaluations with high-value outcomes. The Bridge Financing ensures that authID continues to work with these organizations for the duration of their evaluation and decision-making. It also allows the company to work on converting its pipeline into contracted revenue.

Additionally, as communicated in our recent financing press release, our financial advisers continue to actively evaluate a broader range of strategic opportunities, including capital markets initiatives, partnership structures and other alternatives aimed at enhancing shareholder value and supporting long-term growth.

Starting in Q2 2026, the company made a targeted reduction in operating expenses, yielding approximately $3.5 million in annualized savings and the company will realize this benefit during the remainder of 2026 and into 2027. This was a strategic reallocation of capital designed to concentrate resources on the highest value activities and preserve full operational and technical capacity from organizational efficiency achieved through the use of AI automation tools.

Next, I'll provide an update on our technology and sales pipeline. Let me start with the recent technology milestone that customers have been asking for, and I truly believe it is one of the most significant announcements in our company's history.

Last month, we launched the industry's first quantum resistant biometric authentication platform, which is a technology milestone with significant commercial implications. Quantum computing is no longer a theoretical future risk. There is now commercially available quantum technology that is already capable of compromising conventional encryption. The window for enterprises to harden their identity infrastructure against quantum threats is dramatically shrinking every day.

authID's PrivacyKey platform addresses this threat through a dual layer approach. Layer 1, missed standard quantum-resistant encryption algorithms and Layer 2, cryptographic key sharding which distributes key segments across separate storage locations, eliminating single point of failure vulnerabilities.

Importantly, unlike other biometric systems, the authID platform generates and immediately destroys cryptographic keys and biometric data upon the transaction completion, meaning there is no stored biometric data to steal. Between these 2 approaches, we are ensuring defense against any single breach or insider attack. That is the heart of PrivacyKey. We believe we now offer the only biometric identity platform purpose built to withstand quantum era threats, and we are ready to provide this solution to the market. It's incredibly powerful and the deployment of this tech is completely transparent to the customer. The company is already in discussion with one of the world's largest banks regarding testing and deployment of this capability. Given the scale of potential enterprise contracts in the financial services sector, a single production win could represent transformative revenue to authID.

I am pleased to report on another significant engineering achievement. Build to service not just domestic banking and other industries, but also to address regulatory requirements in the EU and around the world. We have added support for biometrically secured digital IDs, including mobile drivers licenses. Per Juniper research, the digital ID marketplace was $51 billion last year and will continue to grow. At the same time, there will be close to 150 million mobile driver licenses issued by 2030. authID can secure these digital IDs with biometric assurance while protecting user privacy.

We have also included an even more powerful feature, verifiable credentials or VCs. These allow consumers to establish a biometric route of trust that helps them onboard to critical platforms, such as banking, retail and health care services in just 2 clicks. This is a game-changing onboarding process long awaited by the market, which is used to seeing 15 clicks to achieve the same result.

Digital IDs with verifiable credentials represents the current demand by consumers wanting to control and secure their own online journey. We are already working with our partners to bring our solution to the market to address their customers streamline onboarding and verifiable credential demand.

Looking at our sales. The forward revenue story for authID is anchored in its proof-of-concept pipeline. As of Q1 2026, the company is actively engaged with more than a dozen prospective customers spanning retail, banking, fintech, crypto, industrial and chip manufacturing and health care. These are not exploratory conversations. They are structured evaluations being conducted by household name enterprises that manage assets, transactions and user bases comparable in scale to sovereign economies.

There are 4 key dynamics worth highlighting. First, top-tier enterprise concentration, the pipeline includes top 3 companies in retailing, banking and technology hardware, winning even one of these represents a potentially company-defining contract.

Second, rigorous evaluation process. The fact that these organizations are conducting thorough technical evaluations is a signal of commercial seriousness, not hesitation. When organizations of this scale engage in a proof of concept testing, we are evaluating vendors for long-term, high-value partnerships.

Third, successful channel leverage. Nearly half of the largest pipeline accounts have been sourced through channel partners including Formula5 and MajorKey, both Microsoft ecosystem specialists. This channel infrastructure dramatically reduces customer acquisition costs and accelerate access to regulated industry verticals.

And fourth, cross-industry validation, the breadth of industries represented in the pipeline demonstrates that authID's biometric identity platform is not a single vertical solution. It is a horizontal infrastructure for enterprise identity assurance.

The conversion of even a modest portion of this pipeline into production contracts during Q2 through Q4 2026 would represent a step change in future revenue. Given the recurring transactional based nature of authID's revenue model, each new production customer adds to the company's compounding monthly revenue base.

Now let me address our Q1 2026 financials. Q1 2026 continues to reflect meaningful progress in our revenue trajectory. We generated approximately $480,000 in revenue during the quarter compared to approximately $296,000 in the same period last year, representing a year-over-year growth of approximately 62%. This growth reflects continued adoption by our existing enterprise customers and the ramp of new customer deployments we brought live over the past year. At the same time, we took specific steps to reduce our operating expenses while maintaining the full operational and technical capacity needed to serve our customers and advance our pipeline.

I'd like to leave you with the following. Looking at the full year of 2026 and into fiscal year 2027, the financial structure of authID is materially more favorable than it was entering 2026. This is based on 6 key structural improvements now in place.

First, our revenue base grew 62% year-over-year, with production customers expanding transaction volumes. Second, we reduced our annualized cost structure by $3.5 million, improving burn efficiency moving forward. Third, $4.2 million in Bridge Financing is securing the runway to close active pipeline engagements. Fourth, a new release of quantum-resistant biometric authentication, in digital ID enabled platform that is technologically ahead of the entire market. Fifth, a channel partner ecosystem generating nearly half of the top pipeline accounts. And six, conducting more than a dozen active enterprise POCs, with the potential for multiple production conversions in the second half of 2026.

The combination of accelerating revenue, structural cost savings and expanding enterprise pipeline creates the conditions for authID to reach cash flow sustainability and long-term financial independence.

I'll now hand it over to Ed to walk us through the first quarter financials.

Thank you, Ron, and thank you all for joining us today. I'll now review the financial results for the first quarter of fiscal year 2026.

Looking at our GAAP results, total revenue for Q1 was approximately $480,000 compared with $296,000 in Q1 of last year and representing year-over-year growth of 62%. This increase reflects revenue from new enterprise customer contracts that have gone live over the past year. Operating expenses for the quarter were $5.0 million compared to $4.7 million in Q1 of last year. This is driven by $0.5 million in increased year-over-year stock-based compensation expense and also reflects the continued stabilization of our employee and vendor expenses. Going forward, we expect to realize more significant operating expense reductions as we start to see the benefits of the Q2 cost savings initiative that Ron mentioned earlier.

Net loss for Q1 2026 was $4.5 million, of which noncash charges were approximately $1.0 million, primarily comprised of stock-based compensation. This compares to a net loss of $4.3 million in Q1 2025, of which noncash charges were $0.5 million. Net loss per share for Q1 improved to $0.28 and compared to $0.40 per share in Q1 of last year and remaining flat compared with a net loss of $0.28 per share we reported in Q4.

Turning to RPO. 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 March 31, 2026, our total RPO was $2.0 million down slightly from $2.2 million in Q4 due to the recognition of contracted revenue in Q1, which was greater than the new customer contract commitments signed in the quarter. We expect to resume RPO growth in the second half of 2026 as we work to complete proof-of-concept tests and close our key enterprise deals in the coming months.

On to our non-GAAP results. Adjusted EBITDA loss for Q1 2026 was $3.4 million compared to $3.9 million in Q1 2025, an improvement of $0.5 million year-over-year. This improvement reflects our continued focus on operating efficiency while maintaining the core capabilities needed to serve our customers and advance our pipeline.

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 Q1 is $1.9 million compared to $1.8 million of ARR as of Q4 and $1.2 million for the same period last year. The year-over-year growth represents our continued efforts to sign and go live with established market leaders including proved identity and the major global retailers signed last 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 Q1 was $0.08 million compared with $0.01 million of bARR signed in Q1 of last year.

As previously explained during our quarterly earnings calls, bARR comprises 2 components, which we refer to as cARR and UAC. The Q1 2026 cARR, or committed annual recurring revenue, represents 38% of reported bARR. UAC, our estimated usage above commitment, is an estimate of the annual customer usage that will exceed contractual commitments. UAC represents the remaining 62% on of reported Q1 bARR.

Next, I'll revisit our progress aligned to the revenue growth stages we report each quarter. The first milestone we monitor is bookings, as measured by bARR. As I just noted, Q1 2026 gross bARR was $0.08 million. We continue to see our pipeline progress through proof-of-concept evaluations and subsequent contract discussions. While the time line for these larger enterprise deals continues to extend, the demand for our privacy-preserving biometric solutions is strong with these major enterprise prospects and we remain committed to bringing these larger deals over the finish line in the remainder of 2026.

The next milestone is our remaining performance obligation or RPO. Our Q1 2026 RPO of $2.0 million reflects its contracted customer commitments, and we expect this to grow in line with the additional enterprise deals that are signed later this year.

Our third milestone is revenue recognized in accordance with GAAP. Our Q1 2026 revenue of approximately $480,000 represents 62% growth versus Q1 2025, continuing the trajectory of meaningful revenue expansion we've been building. And as we 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're also pursuing multiple expansion opportunities with our customer base to explore new use cases and grow their scope of usage within their organizations.

I'll conclude by noting that we ended Q1 with approximately $1.2 million in cash on hand. Cash used in operating activities was approximately $3.4 million for the quarter compared with approximately $5.4 million in Q1 2025, a meaningful year-over-year improvement, reflecting our initial efforts to reduce our expense base, and we expect to see continued benefits from our recent Q2 expense reduction initiative.

As Ron noted, we also secured over $4 million in Bridge Financing in early Q2, which extends our runway as we continue to work towards closing the late-stage enterprise deals in our pipeline as well as pursuing strategic opportunities that will enhance shareholder value and support long-term growth.

With that, I'll turn it back to the operator.

[Operator Instructions]. Our first question comes from Ricky Solomon with Wilmot.

Ron, can you possibly give any more detail you're comfortable with about the POCs you're working on now?

Yes. Ricky, thank you for the question. This is probably the more exciting part of what's been happening here at authID. These POCs, there's roughly about 20 of them. that we have on target. These represent, I would say, top 3 of every single vertical that they're in, which is super exciting. These are the biggest and the best household names of the bunch. I think the thing that we have to navigate through and which are what we're really good at is that these organizations are very thorough, and they have a very specific onboarding process for the vendors, and we've gone through all of that, which is exciting. And then we get to go head-to-head with the other competitors, which again, is very exciting for us because we know we're going to do well.

So we're in that process today. This is the most amount of POCs we've ever been with this highest caliber of clients. And we're looking forward to being able to knock those down here in the next couple of quarters.

[Operator Instructions]. Our next question is the follow-up from Ricky Solomon.

Just 1 more question. Can you describe the state of our technology. I know we have the quantum resistant -- quantum resistant press release and all that. But can you just compare like where we stand in terms of our technology stack compared to, say, who are your couple of competitors are in going -- going for these POCs you're talking to?

Yes. Thanks again for that question as well. I'm actually glad you brought up the quantum because I wanted to expand on that. Over the last 2 years, and you've known this over actually the last 3 years, as authID has been trying to get into the enterprise and to kind of prove our enterprise worthiness and be world-class, each of these RFPs and each of these organizations have always asked us about quantum. They knew that it was around that it's coming, but it wasn't necessarily here yet. So this is not a new thing for us.

When we had built our technology and retooled it with PrivacyKey, we knew that PrivacyKey was geared up and ready for -- was ready to be quantum resistant. And then again, actually, last couple of weeks ago when we actually made that release and quantum resisted biometrics with PrivacyKey. We're super excited about this.

Now why is this super important in the space? Right now, there's 2 major trends that are converging. One is obviously AI and that's actually been bringing authID to the forefront in terms of fraud and attacks and identity. But the second one is the actual increase in compute and quantum.

Why is quantum such a big deal? Because that is the technology that's to be able to break encryption. So all modern day encryption that we know today will be at risk to quantum computing. There was a release just 3 weeks ago, how open publicly available quantum was able to break a 15-bit encryption. And so with that being said, it is actually right around the corner for us. And so authID super excited to be able to notify our customers and then also notify the public that we just have -- we just really start quantum-resistant biometrics. And that's going to absolutely -- we're already in the forefront around privacy, but now we're going to be on the forefront of being future-proofed against all quantum compute threats in the future. So that definitely has enhanced our platform.

There's nobody in the space that we know of right now that has a purpose-built quantum-resistant biometric authentication solution. I assume they're going to start to put that in place because they saw the news of the threats just 3 weeks ago. But we've had it built in and we're activating and we're releasing to the marketplace for our customers. So we're super excited about that. Thank you for the question.

[Operator Instructions]. And I'm not showing any further questions. I'd like to turn the call back over to Ron.

Thank you, everyone, for joining us today. If you have any further questions about our progress, please reach out to the investor handle, [email protected], and look forward to speaking to you again.

Thank you. Ladies and gentlemen, this does conclude today's presentation. We thank you for your participation. You may now disconnect, and have a wonderful day.

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.

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.

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.

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

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 [email protected]. We look forward to speaking with you again soon. Thank you.

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

Good day, and thank you for standing by. Welcome to the authID Q3 Fiscal 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 first speaker today, Graham Arad, General Counsel. Please go ahead.

Thank you, operator. Greetings and good afternoon. This is Graham Arad, General Counsel at authID. Welcome to the authID Third Quarter 2025 Results Conference Call. As a reminder, this conference is being recorded. Joining me on today's call are our CEO, Rhon Daguro; our CFO, Ed Sellitto; and our Founder and CTO, Tom Szoke. By now, you should have access to today's press release announcing our third quarter 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 and other filings, which are made available at www.sec.gov. Finally, if you're 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, Rhon Daguro.

Thank you, Graham, and thank you all for joining us today. I will walk you through our top line performance, our customer and partner updates, our product and technology updates and our priorities for the remainder of the year. Since becoming CEO, our management team has sought to build a balanced portfolio of both Fast 100 companies with potential for explosive growth and FAT 100 companies with stable operations and strong balance sheet.

Initially, we focused on the Fast 100 as authID had not yet built the reputation to be credible with the FAT 100. That began to change in 2025 with the addition of several FAT 100 clients that I will be sharing with you today. While making great progress this year with numerous prospective key customers, we unfortunately saw two major early FAT 100 engagements underperform, resulting in negative net revenue for the third quarter.

In 2024, we signed a customer contract with clear assurances and the expectation that the customer would meet their contractual obligations. However, as reflected in our financials, the customer faced significant challenges to meet the agreed-upon requirements. And as disclosed in our 10-Q, we proactively stopped recognizing revenue from them.

We are still in active conversations with this customer who continues to make introductions to more potential customers, but we do not plan to recognize any further revenue from them until we agree on revised terms and they complete the changes they are making to implement their new business model.

Regarding the second customer contract, we recorded approximately $700,000 in estimated concessions that relate to an annual usage minimum fee payable at the end of the year. While this customer is experiencing its own business challenges, they remain a valued and strategic partner to us as we believe their activity will ramp over time, but we have adjusted our revenue to reflect this timing.

The accounting adjustments for these two contracts drove the negative net revenue for the quarter. On the next slide, in terms of new contracts, in the third quarter, we booked two large enterprise customers, and we booked two smaller customers, which were not enough to offset the revenue adjustments. These four contracts represent $200,000 in bARR for the third quarter of 2025.

The first contract, which was announced in a press release, is one of the largest global retailers based in the U.K. and represents significant validation of authID's technology. They are initially using authID biometric authentication to protect their back-office employee workforce and call centers. The second contract is a Phase 1 of a multiphase strategy where we embed authID inside NESIC's platform.

NESIC, a sub of NEC, will use authID for identity verification and employee onboarding. The third contract is with The Pipeline Group, a fast-growing lead generation company who will use authID to onboard remote workers, monitor worker activity and to authenticate remote workers into core systems. This represents our entry into the growing lead generation market.

The final contract is with an international bank for identity onboarding and identity verification and authentication. On to the next slide. It's important to note that authID's new customer list and target customer list is much different today than a year ago. The caliber and the scale of customer opportunities we are now engaged in have improved significantly and reflect the excitement around our unique technology.

To that end, I think it is important for me to share some of the descriptions of the customers we are actively engaged with. While we are not permitted to provide the names of these customers for contractual reasons, some notable examples include household names across target industries that will expand our reach.

First, a global leader in payroll technology, the largest global biometric hardware provider, a global leader in digital payments, a Tier 1 AI chip manufacturer, global professional sports organizations, one of the largest European retail chains, a major U.S. healthcare network, a global cosmetics retailer, a national U.S. specialty retailer, a leading U.S. energy company, a Fortune 500 identity and access management company, a major luxury hotel operator and one of the largest hotel brands.

Again, these are not just targets, but active engagements with industry principles. Even a year ago, none of these top-tier organizations would have considered authID. Today, they are actively engaging with us because of the quality of our technology. Just this list alone represents over $20 million in bARR authID is actively engaged in closing. Our goal was to close enough of these opportunities to achieve our $18 million bARR target for 2025.

Unfortunately, due to the longer sales cycles of these enterprise deals, our new bARR target for 2025 is now reduced to $6 million. Moving to the next slide; the strongest endorsement of our technology comes from our current channel partners. We have over 25 partners, many of which are the most established category leaders in their respective markets. Let me tell you about three partners specifically.

Last quarter, I described our enthusiasm and appreciation for our partnership with NESIC, a part of NEC Corporation, which is a $20 billion global company that can work with anyone they choose. They chose authID, an incredibly powerful statement about our technology. authID is now embedded in NESIC software.

Building on this partnership, NESIC and authID have agreed to work together to deliver enterprise identity management and Agentic AI security solutions. Another key partner is Prove, one of the largest identity security platforms in the industry. Prove has selected authID's PrivacyKey product as the biometric authentication solution for their next-generation platform.

The unique cryptographic signing capability of PrivacyKey opens new business opportunities for Prove and authID. Last quarter, I mentioned that we were working on signing a joint customer with Prove. I'm happy to note that this joint customer, a fintech company that provides digital infrastructure for more than 150 banks has contracted with authID directly to launch our technology into their platform. We signed a contract with them in October with their first bank going live next month.

Finally, MajorKey, one of the largest Microsoft providers of identity solutions and services announced last week their launch of IDProof+, leveraging biometric technology developed in collaboration with authID. This is another example of companies launching their most important services and capabilities on authID's core technology. We just discussed how our partnerships lead us to new opportunities.

Now I'm going to talk about our greatest strength, authID's products and technology. On the next slide, as part of the foundational rebuild needed when I joined authID, we had to make significant product breakthroughs to unlock enterprise adoption, specifically for our FAT 100 large enterprise accounts. In response to this need, we introduced two major innovations that I've already mentioned.

The first one is PrivacyKey, which is biometric authentication without storing biometrics. As expected, with the existing contracts signed, PrivacyKey adoption is ramping. The next one is IDX, which provides enterprise scalability and identity assurance for distributed workforces and supply chain and biometrically secures humans, non-humans and AI agents. Let me comment on the term AI agents.

On the next slide, AI agents represent a massive opportunity in the market today. Industry analysts project trillions to flow through Agentic AI commerce and hundreds of billions of that will be for Agentic AI security. And we've already heard from customers that they are slow rolling the launch of Agentic AI projects due to the lack of governance because unaccountable AI agents bring substantial risk of misuse and abuse.

In response, we have added new capabilities to our IDX platform to tie each AI agent to a human to create accountability for all AI agent actions and behaviors. IDX provides accountability, compliance, security and audit for the Agentic AI-driven enterprise, and I believe we are going to be the most important company leading that category. The development of these innovations was required to deliver a strong foundation of capabilities and tech innovation.

Many customers, partners and industry experts acknowledge we have some of the best technology in the market. If you pick any industry, we are talking to the #1 and the #2 in that space. The best companies want to use the best technology available, and I believe we have that capability, which brings me to my final slide. The market is starting to value biometric solutions as an indispensable technology.

To us, this has been obvious for years, but the market is waking up to the identity risks of AI. I say all of this to reiterate that authID is viewed as one of the few leaders in the marketplace for biometric authentication, AI defect detection and now agentic AI security. The demand is so high for biometrics that a major identity company just recently acquired a biometrics company. We have received incredible validation of our technology with some of the largest and most valuable companies in the world.

Therefore, our mandate for the remainder of the year and into 2026 is clear: continue to serve the companies that entrust us to manage their biometric authentication needs and win the $20 million-plus in enterprise deals we are currently engaged in. We have made incredible progress to-date. And as a shareholder myself, I've never been more excited about the future of authID.

Thank you very much for listening. And now I'll turn it over to our CFO, Ed Sellitto.

Thank you, Rhon, and thank you all for joining us today. I'll now review the financial results for the quarter. As Rhon discussed earlier, our third quarter was impacted by contractual challenges with two customers. Our resulting third quarter revenue adjustments exceeded our sales in the quarter, resulting in negative net revenue. I will expand on these adjustments in a moment.

Looking at our GAAP results. For this quarter, we are breaking out our revenue into both gross and net revenue. Net revenue is equal to gross revenue minus any customer discounts and concessions. Gross revenue for the quarter was $0.6 million compared to $0.2 million last year. Net revenue, which reflects Q3 concessions totaling $0.7 million was a negative $0.1 million compared with a positive $0.2 million last year.

For additional context, I'll expand on Rhon's earlier comments regarding the two contracts impacting net revenue. The first contract is with the partner signed in October 2024, who was delayed in ramping their usage due in part to a change in their own go-to-market strategy as well as recent challenges that arose with doing business in international markets.

After we experienced delays in payments from this customer in the second quarter of 2025, the customer ultimately made a partial payment in the third quarter, but asked for a contract amendment before committing to making further payments. Since then, we have received no further payments nor have we amended our contract.

Until any further negotiations are concluded, we seized revenue recognition for this contract and adjusted contract balances to reflect only the amount of approximately $0.4 million that has been paid to-date. The second contract that impacted our third quarter revenue relates to the $0.7 million in concessions estimated to be granted to a customer who is also delayed in their usage and is tracking significantly below their annual minimum usage commitment.

This customer was signed in 2023 and began ramping in 2024 toward their commitment. The customer's usage declined unexpectedly due to shifts in their marketing strategy and remained significantly below the minimum commitment by September 30, 2025, despite consistent communication from the customer that they projected their usage to resume its growth. That said, the customer has paid all amounts due for their actual usage in compliance with our agreements.

Given the customer's strategic importance to the company as well as management's belief in their future anticipated usage growth and ongoing new business development opportunities, the company expects to make a concession on the annual minimum fee in order to maintain the relationship going forward. Revenue and performance obligation for this customer were adjusted in the third quarter to account for the estimated concession.

Before moving on to the remaining financial results, I want to reiterate Rhon's sentiment that while we hope these customers can deliver growth in their business to fulfill our signed contracts, we are encouraged by the fact that we have maintained relationships with each customer, we're able to collect partial payments and have year-over-year growth in our remaining customer base.

We also proactively addressed this issue by focusing our efforts to work with larger established enterprise organizations. Moving on to the remaining GAAP metrics. Operating expenses for Q3 were $5.1 million compared to $3.8 million a year ago. The year-over-year increase is primarily due to increased headcount investment in sales and R&D as we continue to execute our enterprise sales strategy.

Net loss for the quarter was $5.2 million, of which noncash charges were $1.1 million. This compares to a net loss of $3.4 million for the same period last year, which included $0.6 million in noncash charges. Net loss per share for the quarter was $0.38 compared with $0.31 a year ago. 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 September 30, 2025, our total RPO was $3.6 million, a decrease of approximately $10.9 million over the prior quarter as we recognized contracted revenue in Q3 and adjusted for payment issues and concessions related to the customer contracts I described earlier. Our RPO for the quarter is slightly below the RPO at the same time last year, which was $3.8 million.

The combination of the one-off challenges we incurred with earlier contracts and our resulting proactive shift to pursue major enterprise customers with longer sales cycles has resulted in a temporary decline in our RPO, which we expect to resume its upward trend as we gain traction closing deals in our pipeline in the coming months. On to our non-GAAP results on the next slide.

Adjusted EBITDA loss was $4.1 million for Q3 compared with a $2.9 million loss for the same period last year. 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&D. 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 Q3 is $1.7 million compared to $1.0 million of ARR as of Q3 2024. The year-over-year growth reflects our proactive 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 out 18 months from the date of signing of each customer contract.

The gross amount of bARR signed in the third quarter of 2025 was $0.2 million, down from $1.15 million of gross bARR a year ago. The decrease in bARR for the quarter is a result of the longer sales cycles associated with our enterprise deals as we progress through these more expensive sales conversations. As previously explained during our quarterly earnings call, bARR comprises two components which we refer to as cARR and UAC.

cARR or committed annual recurring revenue represents the total annual customer contractual commitment through fixed license fees and minimum usage commitments. These commitments are directly recognized as revenue in each contract a year after each customer goes live with the service. Q3 2025 cARR represents $0.11 million, approximately 58% of reported bARR.

UAC or estimated usage above commitment is an estimate of annual customer usage that will exceed contractual commitments. Q3 UAC represents the remaining $0.08 million or 42% of reported bARR. Turning to our revenue growth stages on the next slide. 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.

Through Q3, we realized a total gross bARR of $2.4 million. We have seen the momentum build with a number of new enterprise prospects in our pipeline, and we've seen others progress to more advanced sales stages. While the timeline for larger enterprise deals are drawing out longer than expected, the demand for biometric solutions and excitement over our technology is there from our customers and prospects.

We're focused on bringing more of these deals with market-leading organizations over the finish line as we exit 2025. The next milestone is our remaining performance obligation, or RPO. As I detailed earlier, as of Q3, we have approximately $3.6 million in RPO, a number that we expect to climb back towards its previous levels as our bookings come in during the coming months.

Our third milestone is revenue recognized in accordance with GAAP. Our Q3 year-to-date revenue of $1.6 million continues to surpass our 2024 full year revenue, and we expect this growth to continue in Q4 as our core customers continue to go live and ramp.

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 and want to continue working with us as their needs grow, and we offer new product capabilities.

I'll end by saying that despite the turbulence we've experienced as a younger company, we are witnessing a growing market, particularly in the enterprise that is increasingly turning to biometrics, and we're watching our prospects' excitement to engage as we demonstrate our solutions.

As we've already started to do, we strongly believe we can continue to sign up large household brand names to use authID to secure their workforce and their customers. I hope that at least a few will even allow us to reveal their names to help and share in the excitement along the way.

With that, operator, we'd now like to open up for questions.

[Operator Instructions] At this time, I would like to turn the call to Rhon Daguro, CEO, for closing remarks.

Thank you. We'd like to thank everyone for listening to today's call. If you have any further questions about our progress, please reach out to our Investor Relations e-mail at [email protected], and we'd be happy to address your questions accordingly. We look forward to speaking with you when we report our full year results in March. Thank you again for joining us.

And this concludes today's program. Thank you for participating. You may now disconnect.