AuthID outlines $6M bARR target for 2025 amid shift to enterprise focus and longer sales cycles

Earnings Call Insights: authID Inc. (AUID) Q3 2025

MANAGEMENT VIEW

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CEO Rhoniel Daguro highlighted a strategic shift towards a balanced portfolio, stating the company initially focused on "Fast 100" companies but began adding "FAT 100" clients in 2025. Daguro reported, "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." He emphasized continued engagement with affected customers but indicated no further revenue recognition until revised terms are reached.

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Daguro discussed new contracts, noting, "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 deals represent $200,000 in booked annual recurring revenue (bARR) for Q3 2025.

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The CEO revealed a recalibration of goals, stating, "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."

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Daguro provided updates on product and technology advancements, including the ramping adoption of PrivacyKey and the launch of IDX, which targets enterprise scalability and Agentic AI security. He emphasized, "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."

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On partnerships, Daguro described expanded collaborations with NESIC, Prove, and MajorKey, noting that these alliances have led to joint customer wins and product launches powered by authID technology.

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CFO Ed Sellitto stated, "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." Sellitto provided further detail on the revenue adjustments and emphasized proactive efforts to pursue larger, established enterprise customers.

OUTLOOK

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Management revised the 2025 bARR target from $18 million to $6 million, citing longer sales cycles for enterprise customers as the primary driver for the change.

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Daguro reiterated, "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."

FINANCIAL RESULTS

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Gross revenue for Q3 2025 was $0.6 million compared to $0.2 million last year. Net revenue, accounting for $0.7 million in concessions, was negative $0.1 million versus a positive $0.2 million last year.

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Operating expenses for Q3 reached $5.1 million, up from $3.8 million a year ago. Net loss for the quarter was $5.2 million, with noncash charges of $1.1 million, compared to a net loss of $3.4 million for the same period last year.

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Remaining performance obligation (RPO) as of September 30, 2025, was $3.6 million, a decrease of approximately $10.9 million over the prior quarter. Adjusted EBITDA loss was $4.1 million, up from $2.9 million a year ago.

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ARR as of Q3 was $1.7 million compared to $1.0 million as of Q3 2024. The gross amount of bARR signed in Q3 was $0.2 million, down from $1.15 million in Q3 2024.

Q&A

* NOT_APPLICABLE + reason: The transcript does not include any analyst questions or management answers in a Q&A section for this quarter.

SENTIMENT ANALYSIS

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Analyst sentiment cannot be determined for this quarter as no analyst questions or comments were included in the transcript.

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Management maintained a tone of cautious optimism in prepared remarks, acknowledging setbacks but emphasizing progress in strategic relationships and technology. Daguro stated, "We have made incredible progress to-date. And as a shareholder myself, I've never been more excited about the future of authID."

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Compared to the previous quarter, management's tone shifted from high confidence and aggressive growth targets to a more measured outlook, reflecting the revised bARR target and challenges with key contracts.

QUARTER-OVER-QUARTER COMPARISON

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The most significant change is the reduction of the 2025 bARR target from $18 million to $6 million, attributed to longer enterprise sales cycles and underperformance of two major contracts.

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Q2 featured record revenue and optimistic projections, while Q3 saw negative net revenue due to concessions and payment delays.

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RPO declined from $13.8 million in Q2 to $3.6 million in Q3, reflecting revenue recognition and contract adjustments.

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Management tone shifted from confident and expansion-focused in Q2 to acknowledging risks and the need for more conservative forecasting in Q3.

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Analyst engagement was present in the previous quarter, with questions on revenue recognition, bookings, and partnerships, but is absent in Q3.

RISKS AND CONCERNS

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Management identified delays and underperformance in two major FAT 100 contracts, leading to revenue concessions and negative net revenue.

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The company stopped recognizing revenue from one customer due to unmet contractual obligations and payment delays, and made $0.7 million in concessions to another customer tracking below their annual minimum usage commitment.

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Sellitto noted, "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."

FINAL TAKEAWAY

Management described Q3 2025 as a turning point requiring recalibration of growth targets and strategy, driven by challenges in two major enterprise contracts and a resulting reduction in bARR guidance to $6 million for 2025. The company emphasized ongoing engagement with top-tier customers, expanding product capabilities, and deepening partnerships with industry leaders as critical steps to returning to a growth trajectory, while acknowledging the need for more cautious forecasting amid longer enterprise deal cycles and recent revenue headwinds.

Read the full Earnings Call Transcript [https://seekingalpha.com/symbol/auid/earnings/transcripts]

MORE ON AUTHID

* authID Inc. (AUID) Q3 2025 Earnings Call Transcript [https://seekingalpha.com/article/4842854-authid-inc-auid-q3-2025-earnings-call-transcript]
* authID Inc. (AUID) Q2 2025 Earnings Call Transcript [https://seekingalpha.com/article/4813905-authid-inc-auid-q2-2025-earnings-call-transcript]
* AuthID targets $18M in 2025 bookings as IDX platform launch expands total addressable market [https://seekingalpha.com/news/4485845-authid-targets-18m-in-2025-bookings-as-idx-platform-launch-expands-total-addressable-market]
* Seeking Alpha’s Quant Rating on authID [https://seekingalpha.com/symbol/AUID/ratings/quant-ratings]
* Financial information for authID [https://seekingalpha.com/symbol/AUID/income-statement]