authID Inc.

Good day, and thank you for standing by. Welcome to the AuthID Q3 fiscal year 2025 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1-1 on your telephone. You will then hear an automated message advising that your hand is raised. To withdraw your question, please press star 1-1 again. 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, Ron Taguro, our CFO, Ed Salito, and our founder and CTO, Tom Sokey. 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 do not guarantee the 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'll be able to see the results presentation and advance the slides yourself as prompted by our speakers. I'd now like to introduce our CEO, Ron Taguro.

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 sheets. Initially, we focused on the FAST 100 as Off-ID 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 FAST 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 obligation. However, as reflected in our financials, the customer faced significant challenges to meet the agreed upon requirements, and as disclosed in our 10Q, 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 bar 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 UK and represents significant validation of AuthID's technology. They are initially using AuthID's biometric authentication to protect their back office, employee workforce, and call centers. The second contract is a phase one of a multi-phase strategy where we embed AuthID inside an eSIX platform MESIC, 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 one 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 Off-ID. Today, they are actively engaging with us because of the quality of our technology. Just this list alone represents over 20 million in bar off ID is actively engaged in closing. Our goal was to close enough of these opportunities to achieve our 18 million bar target for 2025. Unfortunately, due to the longer sales cycles of these enterprise deals, our new bar 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 NISIC, a part of NEC Corporation, which is a 20 billion global company that can work with anyone they choose. They chose OffID, an incredibly powerful statement about our technology. OffID is now embedded in NISIC software. Building on this partnership, NISIC 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 Privacy Key product as the biometric authentication solution for their next-generation platform. The unique cryptographic signing capability of Privacy Key opens new business opportunities for Prove and AuthID. Last quarter, I mentioned that we were working on signing a joint customer with Proof. 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 OFF-ID. This is another example of companies launching their most important services and capabilities on OFF-ID's core technology. We just discussed how our partnerships lead us to new opportunities. Now I'm going to talk about our greatest strengths, OFF-ID's products and technology. On the next slide, as part of the foundational rebuild needed when I joined OFF-ID, we had to make significant product breakthroughs to unlock enterprise adoption. specifically for our FAT100 large enterprise accounts. In response to this need, we introduced two major innovations that I've already mentioned. The first one is Privacy Key, which is biometric authentication without storing biometrics. As expected, with the existing contract signed, Privacy Key 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 number one and the number two 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 biometric 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 OffIDs. Thank you very much for listening, and now I'll turn it over to our CFO, Ed Salido.