authID Inc. (AUID) Bundle
Understanding authID Inc. (AUID) Revenue Streams
Understanding authID Inc.’s Revenue Streams
As of September 30, 2024, authID Inc. reported revenues of approximately $249,000 for the three months ended September 30, 2024, a significant increase from $43,389 for the same period in 2023. For the nine months ended September 30, 2024, revenues were approximately $686,736, compared to $118,387 in 2023. This represents a year-over-year growth rate of approximately 474% for the third quarter and 480% for the first nine months of the year.
Revenue Breakdown by Sources
The primary revenue sources for authID Inc. include software licensing fees and service contracts. For the nine months ended September 30, 2024, two customers represented 64% of total revenue, indicating a high concentration of revenue from a limited customer base. In the previous year, one customer accounted for 49% of revenue.
| Period | Revenue ($) | Year-over-Year Growth (%) | Major Customers |
|---|---|---|---|
| Q3 2024 | $249,000 | 474% | 3 customers (84% of revenue) |
| Q3 2023 | $43,389 | - | 1 customer (53% of revenue) |
| 9M 2024 | $686,736 | 480% | 2 customers (64% of revenue) |
| 9M 2023 | $118,387 | - | 1 customer (49% of revenue) |
Contribution of Business Segments to Overall Revenue
In 2024, the company’s revenue growth is attributed mainly to new customer contracts signed in the latter half of 2023. This strategic move has allowed the company to diversify its revenue streams and reduce dependence on a few key customers. The remaining performance obligations (RPO) as of September 30, 2024, were approximately $3.83 million, with $0.33 million recorded as deferred revenue, indicating potential future revenue.
Analysis of Significant Changes in Revenue Streams
There was a marked increase in revenues compared to previous periods, driven by the recognition of revenue from new contracts. For the three months ended September 30, 2024, the operating expenses totaled $3,762,317, which included general and administrative expenses of $2,102,549 and research and development expenses of $1,615,970. These expenses reflect the company's investment in growth and technology development, which may support future revenue increases.
The financial health of the company is demonstrated by its efforts to secure additional funding, raising approximately $10 million through stock offerings in June 2024. This capital infusion is intended to sustain operations and support growth initiatives, including further development of its identity verification and authentication services.
Overall, the revenue analysis for authID Inc. shows a strong upward trend, driven by new customer acquisition and strategic business decisions aimed at diversifying its revenue base.
A Deep Dive into authID Inc. (AUID) Profitability
Profitability Metrics
In examining the financial health of the company, key profitability metrics such as gross profit, operating profit, and net profit margins provide essential insights.
Gross Profit, Operating Profit, and Net Profit Margins
For the nine months ended September 30, 2024, the company reported:
- Revenues, net: $686,736
- Cost of Revenues: $0 (indicating no cost associated with revenue generation)
- Gross Profit: $686,736
- Operating Expenses: $10,678,321
- Operating Loss: $(10,678,321 - 686,736) = $(9,991,585)
- Net Loss: $(9,683,619)
The margins can be calculated as follows:
- Gross Profit Margin: (Gross Profit / Revenues) 100 = (686,736 / 686,736) 100 = 100%
- Operating Profit Margin: (Operating Profit / Revenues) 100 = (Operating Loss / Revenues) 100 = (-9,991,585 / 686,736) 100 = -1450.5%
- Net Profit Margin: (Net Loss / Revenues) 100 = (-9,683,619 / 686,736) 100 = -1418.5%
Trends in Profitability Over Time
Comparing the nine months ended September 30, 2024, to the same period in 2023:
- 2023 Net Loss: $(16,180,056)
- 2024 Net Loss: $(9,683,619)
- Improvement in Net Loss: $16,180,056 - $9,683,619 = $6,496,437
Comparison of Profitability Ratios with Industry Averages
Industry benchmarks for technology companies typically show:
- Average Gross Profit Margin: 70% - 80%
- Average Operating Profit Margin: 10% - 20%
- Average Net Profit Margin: 5% - 15%
In comparison:
- Company Gross Profit Margin: 100% (better than the industry average)
- Company Operating Profit Margin: -1450.5% (significantly worse than the industry average)
- Company Net Profit Margin: -1418.5% (significantly worse than the industry average)
Analysis of Operational Efficiency
The company's operational efficiency can be analyzed through its cost management and gross margin trends:
- General and Administrative Expenses (9M 2024): $6,334,070
- Research and Development Expenses (9M 2024): $4,213,041
- Total Operating Expenses (9M 2024): $10,678,321
- Comparison with 2023: Operating expenses increased from $7,591,391 to $10,678,321, indicating a rise of $3,086,930.
| Metric | 2023 | 2024 | Change |
|---|---|---|---|
| Net Loss | $(16,180,056) | $(9,683,619) | $6,496,437 |
| Gross Profit Margin | Not applicable | 100% | Not applicable |
| Operating Profit Margin | Not applicable | -1450.5% | Not applicable |
| Net Profit Margin | Not applicable | -1418.5% | Not applicable |
| Total Operating Expenses | $7,591,391 | $10,678,321 | $3,086,930 |
Debt vs. Equity: How authID Inc. (AUID) Finances Its Growth
Debt vs. Equity Structure
As of September 30, 2024, the company reported a total debt of approximately $236,769 in convertible debt, with total current liabilities amounting to $1,875,509. In contrast, the total stockholders' equity stood at $15,594,187.
The debt-to-equity ratio is a key indicator of the company’s financial leverage. For this company, the debt-to-equity ratio can be calculated as follows:
- Total Debt: $236,769
- Total Equity: $15,594,187
- Debt-to-Equity Ratio: 0.015 (approximately 1.5%)
This ratio is significantly lower than the industry average, which typically ranges from 0.5 to 1.5 depending on the sector.
Recent Debt Issuances and Credit Ratings
In June 2024, the company raised approximately $10.0 million through the sale of common stock, net of offering costs. This capital influx reflects the company’s strategy to balance its funding through equity while managing its debt levels. Additionally, the company has not reported any recent credit ratings or significant refinancing activities, indicating a cautious approach to leveraging debt.
Debt Financing vs. Equity Funding
The company’s approach to financing growth involves a strategic mix of debt and equity. In the nine months ended September 30, 2024, cash provided by financing activities included:
- Proceeds from the sale of common stock: $10,041,399
- Credit facility drawdown (prior year): $543,760
This indicates a reliance on equity financing, particularly given the low levels of outstanding debt. The company aims to minimize interest obligations while positioning itself for future growth.
Summary Table of Debt and Equity Structure
| Financial Metric | Amount |
|---|---|
| Total Debt | $236,769 |
| Total Current Liabilities | $1,875,509 |
| Total Stockholders' Equity | $15,594,187 |
| Debt-to-Equity Ratio | 0.015 |
| Proceeds from Sale of Common Stock (2024) | $10,041,399 |
| Credit Facility Drawdown (Prior Year) | $543,760 |
Assessing authID Inc. (AUID) Liquidity
Assessing authID Inc.'s Liquidity
Current and Quick Ratios
As of September 30, 2024, authID Inc. reported a current ratio of approximately 6.02, calculated from current assets of approximately $11.7 million and current liabilities of approximately $1.95 million. The quick ratio, which excludes inventory from current assets, is approximately 6.01 as the company does not hold any significant inventory.
Analysis of Working Capital Trends
AuthID Inc. has demonstrated a positive working capital trend, with working capital recorded at approximately $11.2 million as of September 30, 2024. This is an increase from $7.3 million reported at the end of 2023, indicating improved liquidity and operational efficiency.
Cash Flow Statements Overview
For the nine months ended September 30, 2024, authID Inc. reported the following cash flow trends:
- Operating Activities: Cash used in operating activities was approximately $8.5 million, an increase from $6.2 million in the same period of 2023.
- Investing Activities: Cash used in investing activities was approximately $18,000 for the purchase of intangible assets.
- Financing Activities: Cash provided by financing activities was approximately $10.0 million, mainly from the sale of common stock, net of offering costs.
Potential Liquidity Concerns or Strengths
Despite a robust current ratio and positive working capital, liquidity concerns may arise from the company’s ongoing cash burn, with a net loss of approximately $9.7 million for the nine months ended September 30, 2024. The reliance on financing activities to sustain operations highlights a potential vulnerability should market conditions change or access to capital be restricted.
| Liquidity Metric | September 30, 2024 | December 31, 2023 |
|---|---|---|
| Current Assets | $11.7 million | $7.3 million |
| Current Liabilities | $1.95 million | $4.0 million |
| Current Ratio | 6.02 | 1.83 |
| Working Capital | $11.2 million | $3.3 million |
| Net Cash Used in Operating Activities | $8.5 million | $6.2 million |
| Cash Provided by Financing Activities | $10.0 million | $6.3 million |
Is authID Inc. (AUID) Overvalued or Undervalued?
Valuation Analysis
As of September 30, 2024, the financial metrics for the company indicate the following:
- Price-to-Earnings (P/E) Ratio: The company reported a net loss of approximately $9.7 million for the nine months ended September 30, 2024, resulting in a basic and diluted loss per share of $(0.97).
- Price-to-Book (P/B) Ratio: The book value per share as of September 30, 2024, is calculated as total stockholders' equity of $15,594,187 divided by shares outstanding of 10,920,909, resulting in a book value per share of approximately $1.43.
- Enterprise Value-to-EBITDA (EV/EBITDA) Ratio: The EBITDA for the nine months ended September 30, 2024, was approximately $(7.8 million), leading to a negative EV/EBITDA ratio, indicating potential overvaluation concerns.
The stock price trends over the last 12 months have shown significant volatility. The stock price was approximately $3.10 one year ago and has fluctuated to around $1.42 as of September 30, 2024.
In terms of dividends, the company has not declared any dividends, maintaining a dividend yield of 0% due to its ongoing net losses and reinvestment strategy.
Analyst consensus on the stock valuation currently stands at:
- Buy: 2 analysts
- Hold: 3 analysts
- Sell: 1 analyst
| Metric | Value |
|---|---|
| Net Loss (9M 2024) | $9,683,619 |
| Basic and Diluted Loss per Share | $(0.97) |
| Book Value per Share | $1.43 |
| Stock Price (as of Sep 30, 2024) | $1.42 |
| Dividend Yield | 0% |
| Analyst Consensus (Buy/Hold/Sell) | 2/3/1 |
These financial metrics provide a comprehensive view of the company's valuation status, highlighting the challenges it faces in achieving profitability and the perceptions held by market analysts.
Key Risks Facing authID Inc. (AUID)
Key Risks Facing authID Inc.:
The financial health of authID Inc. is influenced by several internal and external risk factors that could impact its operations and profitability.
Industry Competition
authID operates in a highly competitive market for identity verification and authentication services. As of September 30, 2024, three customers represented 84% of the company's revenue, indicating a heavy reliance on a limited customer base . The competitive landscape includes established players that may have greater resources and market presence, which could negatively impact market share and pricing strategies.
Regulatory Changes
The company faces risks associated with evolving regulations in data protection and privacy laws. Non-compliance could lead to significant fines and reputational damage. As of September 30, 2024, the accumulated deficit was approximately $169.2 million, which raises concerns about the company’s ability to absorb potential regulatory costs .
Market Conditions
Current economic conditions, including inflation and geopolitical tensions, pose risks to market demand. The company reported a net loss of $9.7 million for the nine months ended September 30, 2024 . Market volatility could also affect stock performance and access to capital markets for future financing.
Operational Risks
Operationally, authID relies on third-party software and developers, which can introduce vulnerabilities, particularly regarding cybersecurity. Breaches could lead to loss of customer trust and financial liabilities. The company has recognized an increase in operating expenses, which totaled approximately $10.7 million for the nine months ended September 30, 2024 .
Financial Risks
Financially, authID has shown reliance on external funding. In June 2024, the company raised approximately $10 million through a registered direct offering . The ongoing need for capital raises concerns regarding the sustainability of operations and the ability to fund growth initiatives without diluting existing shareholders.
Mitigation Strategies
To address these risks, authID is focusing on diversifying its customer base to reduce dependency on a few significant clients. Additionally, the company is investing in enhancing its cybersecurity measures to protect against data breaches and ensuring compliance with regulatory standards. The management is actively seeking new financing options to maintain liquidity and operational flexibility.
| Risk Factor | Description | Financial Impact (2024) |
|---|---|---|
| Industry Competition | High competition in identity verification services | Potential loss of market share |
| Regulatory Changes | Compliance with evolving data protection laws | Possible fines affecting financial stability |
| Market Conditions | Economic volatility impacting demand | Net loss of $9.7 million |
| Operational Risks | Reliance on third-party software | Increased operating expenses of $10.7 million |
| Financial Risks | Need for external funding | Raised $10 million in June 2024 |
Future Growth Prospects for authID Inc. (AUID)
Future Growth Prospects for authID Inc.
Analysis of Key Growth Drivers
authID Inc. is positioned to leverage several growth drivers, including product innovations, market expansions, and strategic partnerships. The company has recently increased its research and development expenses, which reached $4.2 million for the nine months ended September 30, 2024, compared to $1.5 million for the same period in 2023, indicating a strong focus on enhancing its product offerings.
Future Revenue Growth Projections and Earnings Estimates
For the nine months ended September 30, 2024, authID reported revenues of approximately $686,736, up from $118,387 in the same period of 2023. The company’s revenue growth is expected to continue as it recognizes approximately 27% of its Remaining Performance Obligation (RPO) of $3.83 million over the next twelve months.
Strategic Initiatives or Partnerships That May Drive Future Growth
In June 2024, authID raised approximately $10.0 million through a registered direct offering, which is intended to support its growth initiatives. The company is also focusing on expanding its customer base, with three customers accounting for 84% of revenue in the three months ended September 30, 2024.
Competitive Advantages That Position the Company for Growth
authID’s competitive advantages include a strong technological foundation and a growing portfolio of patented technologies. The company holds intangible assets valued at $213,373 as of September 30, 2024, consisting mainly of acquired and developed software. Additionally, the company has experienced a reduction in operating expenses, with total operating expenses totaling $10.68 million for the nine months ended September 30, 2024, compared to $7.59 million for the same period in 2023.
| Metric | 2024 (9 Months) | 2023 (9 Months) | Change |
|---|---|---|---|
| Revenue | $686,736 | $118,387 | +479% |
| Research & Development Expenses | $4,213,041 | $1,525,723 | +176% |
| Total Operating Expenses | $10,678,321 | $7,591,391 | +40% |
| Remaining Performance Obligation (RPO) | $3,830,000 | N/A | N/A |
Overall, the financial metrics indicate a significant upward trend in revenue and investment in innovation, positioning authID Inc. for potential growth in the upcoming years.
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Updated on 16 Nov 2024
Resources:
- authID Inc. (AUID) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of authID Inc. (AUID)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View authID Inc. (AUID)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.