TUCSON, Ariz., Aug. 14, 2019 /PRNewswire/ -- AudioEye,
Inc. (NASDAQ: AEYE), a leading developer of digital
accessibility solutions that provide barrier-free website access
for individuals with disabilities, reported financial results for
the second quarter ended June 30,
2019.
Second Quarter and Recent Operational Highlights
- Continued to grow direct sales channel client roster in the
second quarter with prominent new customers from the technology,
fashion, retail, hospitality and healthcare space among
others.
- Continued to fortify new indirect channel partner
relationships. Currently, 18 established channel partners offer
AudioEye as their exclusive digital accessibility solution to their
clients.
- Increased the sales and implementation teams to grow AudioEye
market share faster and to continue implementing its service
solution for customers in a timely manner.
- Expanded relationship with Dealer.com, a Cox Automotive brand,
to become the Company's premier partner for digital accessibility
in the U.S automotive industry.
- Became an official member of the World Wide Web Consortium
(W3C), an international community comprised of member organizations
that work closely with the public to develop high-quality standards
for the web.
- Added to the Russell Microcap® Index, effective July 1, 2019.
- Selected by Arlington Public
Schools as its web accessibility solution, ensuring the centralized
district website, which includes all schools within its district,
are accessible to individuals with disabilities.
Second Quarter 2019 Financial Results
- Bookings increased 140% to a $7.3M from $3.0M in the same year-ago
period. The increase in bookings was primarily due to execution in
contract closings in the direct channel and expanding contracts
with an existing indirect channel partner.
- Total revenue increased 97% to a record $2.4M from $1.2M in
the same period a year ago. The increase in revenue was primarily
due to continued execution in the direct channel, increased growth
in the indirect channel and additional contracts awarded through
the Company's PDF remediation business.
- Gross profit increased 110% to $1.3M (~53% of total revenue) from $612K
(~50% of total revenue) in the same year-ago period. The increase
in gross profit and gross margin was primarily due to increased
sales volume and an increasing revenue renewal rate with longer
contract terms.
- Total operating expenses increased 94% to $3.3M from $1.7M in
the same year-ago period. The increase in total operating expenses
was primarily due to continued investment in the Company's growth
through technology enhancements, consulting, legal and compliance
costs, as well as recruiting, marketing, and other key personnel
costs.
- Net loss available to common stockholders was $2.0M, or
$(0.27) per share, compared to
$1.1M, or $(0.17) per share, in the same year-ago period.
The greater net loss was primarily due to increased expenses in a
number of key areas as the Company continues to position itself for
its multi-year growth plan.
- At quarter-end, the Company had $2.8M in cash, compared to $5.7M at December 31,
2018, and no debt.
- Deferred revenue increased 87% to $3.2M from $1.7M in
the second quarter of 2018.
- Contracts in excess of revenue and deferred revenue increased
152% to $13.7M from $5.5M in the same period last year.
- As of June 30, 2019, total
customer count had grown to over 1,400 customers.
- As of June 30, 2019, monthly
recurring revenue (MRR) totaled $774K
which was an increase of 13% compared to $686K at March 31,
2019.
Full Year 2019 Financial Outlook
The Company is increasing its full year bookings guidance to
$22M to $24M. The Company now expects revenue for the
full year to range between $10.0M and
$11.0M. With increased PR and
marketing efforts, additional hires in the sales and installation
teams, and further emphasis on the development of technological
enhancements, momentum is expected to increase the pace of both
bookings and revenue throughout the balance of the year.
Subsequent Event
In August 2019, certain of the
Company's outstanding warrants were amended to provide for a
reduction in exercise price through August
16, 2019, provided the amended warrants were exercised in
full and the exercise price was paid in cash. Expected cash
proceeds from the exercise of these warrants is approximately
$2M. Additionally, in
August 2019, the Company secured a
$2M Line of Credit.
Management Commentary
AudioEye Executive Chairman Carr
Bettis said, "With the results of last quarter providing a
strong base for the start of 2019, we took another big step forward
in Q2. Bookings and revenue were, again, record performances with
the bookings increasing 141% and revenue growing 96%, both compared
to the second quarter of last year. We've now achieved growth in
topline for the fourteenth consecutive quarter, which is a
testament to our value proposition coupled with sales execution
within both our direct and indirect channels as well as our new
markets such as PDF remediation. Looking to the remainder of the
year, we are continuing to retain existing customers on longer
contract renewals, which resulted in our record bookings
performance as well as an increase in full-year bookings guidance.
These longer commitments from our customers allow us to create more
predictability in our future revenue streams so that we can more
proactively plan for the future. We've also adjusted revenue
expectations for the year due to slower than expected partner
program ramp-up. However, we are continuing to refine that part of
our go-to-market strategy with a heightened focus on quality of
partnership, partner resources to improve program adoption and
getting long-term commitments. Going forward, we're going to
continue investing and allocating resources that will help us scale
and grow further in 2020 and beyond."
AudioEye CEO Todd Bankofier
added: "In the second quarter, we continued to win new business
with companies of all sizes through our various channels, and we're
doing so at an accelerated rate. More specifically, we currently
count over 1,400 total customers as users of our Ally Managed
Service offering, having signed on over 300 new accounts in just
the last quarter. Our ongoing public relations and marketing
efforts have also provided greater awareness for our solutions,
which is now translating into increased leads and the greatest
pipeline in our company's history. Through the recent expansion of
our relationship with Dealer.com into a premier partnership, we now
have an even stronger commitment from the largest CMS provider in
the auto industry through Cox Automotive. AudioEye is in a truly
unique position as the gold-standard, technology leader in a
nascent market that we believe will expand tremendously in the
coming years."
Conference Call
AudioEye management will hold a conference call today,
August 14, 2019 at 4:30 p.m. Eastern time (1:30 p.m. Pacific time) to discuss these
results.
AudioEye management will host the call, followed by a question
and answer period.
U.S. dial-in number: (877) 407-9208
International number: (201) 493-6784
Please call the conference telephone number 5-10 minutes prior
to the start time. An operator will register your name and
organization. If you have any difficulty connecting with the
conference call, please contact Gateway Investor Relations at (949)
574-3860.
The conference call will also be webcast live and available
for replay, which will be accessible via the investor relations
section of the company's website. An audio recording will remain
available via the investor relations section of the company's
website for 90 days.
A telephonic replay of the conference call will be available
after 7:30 p.m. Eastern time on the
same day through August 21, 2019.
Toll-free replay number: (844) 512-2921
International replay number: (412) 317-6671
Replay ID: 13692898
About AudioEye, Inc.
AudioEye is a technology company serving businesses
committed to providing equal access to their digital content.
Through patented technology, subject matter expertise and
proprietary processes, AudioEye is transforming how the world
experiences digital content. Leading with technology, AudioEye
identifies and resolves issues of accessibility and enhances the
user experience, making digital content more accessible and more
usable for more people.
AudioEye's common stock trades on the Nasdaq Capital Market
under the symbol "AEYE." The Company maintains offices in
Tucson, Scottsdale, Atlanta,
New York and Washington
D.C. For more information about AudioEye and its online
accessibility solutions, please visit www.audioeye.com.
Forward-Looking Statements
Any statements in this press release about AudioEye's
expectations, beliefs, plans, objectives, prospects, financial
condition, assumptions or future events or performance are not
historical facts and are "forward-looking statements" as that term
is defined under the federal securities laws. Forward-looking
statements are often, but not always, made through the use of words
or phrases such as "believe", "anticipate", "should", "intend",
"plan", "will", "expects", "estimates", "projects", "positioned",
"strategy", "outlook" and similar words. You should read the
statements that contain these types of words carefully. Such
forward-looking statements contained herein include, but are not
limited to, statements regarding continued rapid expansion in 2019
and beyond and long-term growth opportunities, revenue and bookings
for the year ending December 31,
2019, the acceleration of public relations and marketing
efforts to increase the Company's pipeline, and the use of
financial resources and the addition of personnel to build on the
Company's market position. These statements are
subject to a number of risks, uncertainties and other factors that
could cause actual results to differ materially from what is
expressed or implied in such forward-looking statements, including
the variability of AudioEye's revenue and financial performance;
risks associated with product development and technological
changes; the acceptance of AudioEye's products in the marketplace
by existing and potential future customers; competition; and
general economic conditions. These and other risks are described
more fully in AudioEye's filings with the Securities and Exchange
Commission (the "SEC"), including AudioEye's Annual Report on Form
10-K for the year ended December 31,
2018 filed with the SEC on March 27,
2019. There may be events in the future that AudioEye is not
able to predict accurately or over which AudioEye has no control.
Forward-looking statements reflect management's view as of the date
of this press release, and AudioEye urges you not to place undue
reliance on these forward-looking statements. AudioEye does not
undertake any obligation to update such forward-looking statements
to reflect events or uncertainties after the date hereof.
About Key Operating Metrics
To supplement our financial information presented in
accordance with generally accepted accounting principles in
the United States (GAAP), we
consider certain operating measures that are not GAAP measures,
including monthly recurring revenue, bookings and contracts.
AudioEye reviews a number of operating metrics such as these to
evaluate its business, measure performance, identify trends,
formulate business plans, and make strategic decisions. We believe
these metrics and measures are useful to facilitate
period-to-period comparisons of our business and to facilitate
comparisons of our performance to that of other similar companies.
In this press release, we are reporting results and/or updating our
previously announced guidance on bookings, revenue and monthly
recurring revenue.
AudioEye's bookings represents the contracted amount of money
the customer commits to spend with the Company over an agreed
amount of time, generally ranging from 12 months up to 60
months.
AudioEye's contracts in excess of revenue and deferred
revenue is the remaining bookings that have not yet been recognized
as revenue or billed to the customer. This measure represents the
contractually agreed amount of money that is remaining to be billed
and paid under contracts and that will be recognized in subsequent
periods.
AudioEye's monthly recurring revenue is the Company's
annualized spend of a customer divided by 12.
Corporate Contact:
AudioEye, Inc.
Todd Bankofier, Chief Executive
Officer
tbankofier@audioeye.com
(520) 308-6140
Investor Contact:
Matt Glover or Tom Colton
AEYE@gatewayir.com
(949) 574-3860
-Financial Tables to Follow-
AUDIOEYE,
INC.
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
(unaudited)
|
|
|
|
|
|
|
Three months ended
June 30,
|
Six months ended June
30,
|
|
2019
|
2018
|
2019
|
2018
|
Revenues
|
$
2,435,622
|
$
1,234,897
|
$
4,421,300
|
$
2,384,239
|
|
|
|
|
|
Cost of
revenue
|
1,147,424
|
622,645
|
2,050,408
|
1,210,109
|
|
|
|
|
|
Gross
profit
|
1,288,198
|
612,252
|
2,370,892
|
1,174,130
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
Selling and
marketing
|
1,093,827
|
576,894
|
1,965,702
|
1,187,556
|
Research and
development
|
146,577
|
49,362
|
361,830
|
99,029
|
General and
administrative
|
2,066,687
|
1,081,840
|
4,203,013
|
2,146,465
|
Total operating
expenses
|
3,307,091
|
1,708,096
|
6,530,545
|
3,433,050
|
|
|
|
|
|
Operating
loss
|
(2,018,893)
|
(1,095,844)
|
(4,159,653)
|
(2,258,920)
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
Unrealized (loss)
gain on marketable securities
|
(186)
|
1,422
|
(204)
|
1,650
|
Interest (expense)
income, net
|
(929)
|
(105)
|
(1,577)
|
132
|
Total other (loss)
income
|
(1,115)
|
1,317
|
(1,781)
|
1,782
|
|
|
|
|
|
Net loss
|
(2,020,008)
|
(1,094,527)
|
(4,161,434)
|
(2,257,138)
|
|
|
|
|
|
Dividends on Series A
Convertible preferred stock
|
(13,089)
|
(13,524)
|
(26,034)
|
(27,274)
|
|
|
|
|
|
Net loss available to
common stockholders
|
$
(2,033,097)
|
$
(1,108,051)
|
$
(4,187,468)
|
$
(2,284,412)
|
|
|
|
|
|
Net loss per common
share-basic and diluted
|
$
(0.27)
|
$
(0.17)
|
$
(0.55)
|
$
(0.35)
|
|
|
|
|
|
Weighted average
common shares outstanding-basic and diluted
|
7,645,872
|
6,471,832
|
7,628,679
|
6,469,212
|
AUDIOEYE,
INC.
|
CONSOLIDATED
BALANCE SHEETS
|
(unaudited)
|
|
June 30,
|
December
31,
|
|
2019
|
2018
|
ASSETS
|
|
|
Current
assets:
|
|
|
Cash
|
$
2,804,456
|
$
5,741,549
|
Accounts receivable,
net
|
632,706
|
172,384
|
Marketable
securities, held in related party
|
306
|
510
|
Deferred costs, short
term
|
182,042
|
176,006
|
Prepaid expenses and
other current assets
|
152,837
|
49,901
|
Total current
assets
|
3,772,347
|
6,140,350
|
|
|
|
Property and
equipment, net
|
166,591
|
108,007
|
|
|
|
Right of use
assets
|
942,588
|
-
|
|
|
|
Deferred costs, long
term
|
116,417
|
93,790
|
Intangible assets,
net
|
1,837,452
|
2,061,404
|
Goodwill
|
700,528
|
700,528
|
|
|
|
Total
assets
|
$
7,535,923
|
$
9,104,079
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
Current
liabilities:
|
|
|
Accounts payable and
accrued expenses
|
$
698,498
|
$
93,544
|
Related party
payables
|
24,467
|
14,467
|
Derivative
liabilities
|
-
|
-
|
Finance lease
liabilities
|
44,556
|
30,172
|
Operating lease
liabilities
|
190,559
|
-
|
Deferred
rent
|
-
|
4,472
|
Deferred
revenue
|
2,944,630
|
2,626,712
|
Total current
liabilities
|
3,902,710
|
2,769,367
|
|
|
|
Long term
liabilities:
|
|
|
Finance lease
liabilities
|
59,542
|
51,150
|
Operating lease
liabilities
|
762,305
|
-
|
Deferred
rent
|
-
|
6,585
|
Deferred
revenue
|
232,021
|
402,075
|
|
|
|
Total
liabilities
|
4,956,578
|
3,229,177
|
|
|
|
Stockholders'
equity:
|
|
|
Preferred stock,
$0.00001 par value, 10,000,000 shares authorized
|
|
|
Series A Convertible
Preferred stock, $0.00001 par value, 200,000 shares designated,
105,000 shares issued and outstanding as of June 30, 2019 and
December 31, 2018
|
1
|
1
|
Common stock,
$0.00001 par value, 50,000,000 shares authorized, 7,656,046 and
7,579,995 shares issued and outstanding as of June 30, 2019 and
December 31, 2018, respectively
|
77
|
76
|
Additional paid-in
capital
|
48,883,802
|
48,017,926
|
Accumulated
deficit
|
(46,304,535)
|
(42,143,101)
|
Total stockholders'
equity
|
2,579,345
|
5,874,902
|
|
|
|
Total liabilities and
stockholders' equity
|
$
7,535,923
|
$
9,104,079
|
View original content to download
multimedia:http://www.prnewswire.com/news-releases/audioeye-reports-second-quarter-2019-results-300901852.html
SOURCE AudioEye, Inc.