TUCSON, Ariz., Aug. 11, 2021 /PRNewswire/ -- AudioEye,
Inc. (NASDAQ: AEYE), an industry-leading software solution
provider delivering website accessibility compliance to businesses
of all sizes, reported financial results for the second quarter
ended June 30, 2021.
AudioEye Interim CEO David Moradi
said, "In the second quarter we resumed sequential growth in MRR
and maintained margins in the mid-70%s. We are continuing to see
sequential growth in MRR across all recurring revenue lines and
expect revenue to be in the range of $6.1M to $6.3M for
the third quarter of 2021."
"Over the past two quarters we have invested heavily in our
platform and in our people. We continue to lead the market with the
most robust and transparent solution that couples advanced
artificial intelligence and human assisted technology by certified
remediation and subject matter experts. We are in the early innings
of digital accessibility and are well positioned to capitalize on
future growth."
Second Quarter 2021 Financial Results
- Total revenue increased 14% to a record $6.0M from $5.3M in
the same prior year period.
- Monthly Recurring Revenue (MRR) as of June 30, 2021 increased 25% to $2.0M from $1.6M as
of June 30, 2020.
- Gross profit increased to a record $4.5M (74.9% of total revenue) from $3.7M (69.6% of total revenue) in the same prior
year period. The increase in gross profit was primarily due to
scale and efficiencies realized from increased platform and product
investment as the Company continues to improve and expand the level
of automation in its product offerings.
- Total operating expenses increased 68% to $7.6M from $4.5M in
the same prior year period. The increase in operating expenses was
due primarily to increases in research and development and sales
and marketing expenses as the Company continues investment to
support scalable and profitable long-term growth.
- Net loss available to common stockholders was $1.8M, or $(0.17)
per share, compared to $1.4M, or
$(0.16) per share, in the same prior
year period. The greater net loss was primarily due to the increase
in operating expenses discussed above.
- Non-GAAP net loss in Q2 of 2021 was $1.3M, or $(0.13)
per share, compared to the same prior year period of $191k, or $(0.02)
per share. The non-GAAP net loss and EPS performance reflects
adjustments primarily for stock-based compensation expense, Q2 2021
gain on extinguishment of debt recorded in connection with full
forgiveness of PPP Loan, interest expense, which mainly includes
expense for debt issuance, loss on impairment of long-lived assets
and loss on disposal of property and equipment.
- At quarter-end, the Company had $24.8M in cash, compared to $9.1M on December 31,
2020.
Other Updates
- Continued to grow client roster to approximately 75,000
customers as of June 30, 2021,
representing an increase of approximately 270% over June 30, 2020.
- Strengthened the Company's leadership by adding Kelly Georgevich as CFO and Mase Graye as Chief
Architect.
- On May 10, 2021, the Board of
Directors of the Company approved the redemption of all of the
outstanding shares of its Series A Convertible Preferred Stock at a
redemption price of $15.5356 per
share to be effective on May 25,
2021. All holders of the shares of Series A Convertible
Preferred Stock instead elected to convert their shares into shares
of Common Stock prior to the effectiveness of the redemption, and
no shares of the Series A Convertible Preferred Stock remain
outstanding.
Financial Outlook
Going forward we are providing
quarterly guidance instead of an annual outlook. Initiatives such
as partnerships and large-scale client conversions that we
anticipated would drive reaccelerating revenue growth in the second
half of the year are dependent on external timelines. We still
have these growth opportunities, but they are no longer
tracking to our calendar year plan. We expect revenue to be between
$6.1 and $6.3
million in the third quarter, and we expect to grow revenue
both year-over-year and sequentially in the fourth quarter. In the
first half of the year, we had positive cash flow from operations,
but the Company will be increasing certain investments in the
business such as marketing and sales. As such, we expect to
use cash in the second half of 2021.
Conference Call Information
AudioEye management will
hold a conference call today, August 11,
2021 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.
Date: Wednesday, August 11,
2021
Time: 4:30 p.m. Eastern time
(1:30 p.m. Pacific time)
U.S. dial-in number: 1-877-300-8521
International number: 1-412-317-6026
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
1-949-574-3860.
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. The 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 also be
available after 7:30 p.m. Eastern
time on the same day through August
18, 2021.
Toll-free replay number: 1-844-512-2921
International replay number: 1-412-317-6671
Replay ID: 10159247
About AudioEye
AudioEye is an industry-leading digital
accessibility platform delivering trusted ADA and WCAG
accessibility compliance at scale. Through patented technology,
subject matter expertise and proprietary processes, AudioEye is
eradicating all barriers to digital access, helping creators get
accessible and supporting them with ongoing advisory and automated
upkeep. Trusted by the FCC, ADP, SSA, Samsung, and more, AudioEye
helps everyone identify and resolve issues of accessibility and
enhance user experiences, automating digital accessibility for the
widest audiences. AudioEye stands out among its competitors because
it delivers human-in-the-loop machine learning accessibility
remediations without fundamental changes to website architecture,
as well as source code audits, browser-based tools, and continuous
accessibility monitoring. Join our movement at
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", "confident", "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 anticipated contributions from new
sales channels, long-term growth prospects, opportunities in the
digital accessibility industry, our revenue and MRR guidance, and
our expectation of investments in marketing and sales. 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 our new platform and
sales channels; product development and technological changes; the
acceptance of AudioEye's products in the marketplace by existing
and potential future customers; competition; general economic
conditions; and uncertainties regarding the impact on our business
and the overall economy from the coronavirus (COVID-19) outbreak.
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, 2020 filed with the SEC
on March 11, 2021 and in subsequent
filings with the SEC. 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. Due to rounding, numbers presented throughout this
document may not add up precisely to the totals provided and
percentages may not precisely reflect the absolute figures.
About Key Operating Metrics
We consider
monthly recurring revenue ("MRR") as a key operating metric and a
key indicator of our overall business. We also use MRR as (i) one
of the primary methods for planning and forecasting overall
expectations and for evaluating, on at least a quarterly and annual
basis, actual results against such expectations; and (ii) as a
performance metric for certain executive stock-based compensation
awards.
We manage customers through two primary channels, Enterprise
and Partner and Marketplace. Enterprise channel consists of our
larger customers and organizations, including those with
non-platform custom websites, who generally engage directly with
AudioEye sales personnel for custom pricing and solutions. This
channel also includes federal, state and local government agencies.
The Partner and Marketplace channel consists of our CMS partners,
platform & agency partners, authorized resellers and our
marketplace. This channel serves small and medium sized businesses
who are on a partner or reseller's web-hosting platform or who
purchase an AudioEye solution from our marketplace.
We define MRR as the sum of (i) for our Enterprise sales
channel, the total of the average monthly recurring fee amount
under each active paid contract at the date of determination, plus
(ii) for our Partner and Marketplace channel, the recognized
recurring monthly fee amount for all paying customers at the date
of determination, in each case, assuming no changes to the
subscription and without taking into account any usage above the
subscription or recurring revenue base, if any, that may be
applicable to such subscription. This determination includes both
annual and monthly contracts for recurring products. Some of our
contracts are cancelable, which may impact future MRR. MRR excludes
revenue from our PDF remediation services and Mobile App report
business.
Use of Non-GAAP Financial Measures
From time
to time, we review adjusted financial measures that assist us in
comparing our operating performance consistently over time, as such
measures remove the impact of certain items, as applicable, such as
our capital structure (primarily interest charges), items outside
the control of the management team (taxes), and expenses that do
not relate to our core operations, including transaction-related
expenses and other costs that are expected to be non-recurring. In
order to provide investors with greater insight and allow for a
more comprehensive understanding of the information used in our
financial and operational decision-making, the Company has
supplemented the information presented on a GAAP basis in this
press release with the following non-GAAP financial measures:
Non-GAAP earnings (loss) and Non-GAAP earnings (loss) per diluted
share.
These non-GAAP financial measures have limitations as
analytical tools and should not be considered in isolation or as a
substitute for analysis of Company results as reported under GAAP.
The Company compensates for such limitations by relying primarily
on our GAAP results and using non-GAAP financial measures only as
supplemental data. We also provide a reconciliation of non-GAAP to
GAAP measures used. Investors are encouraged to carefully review
this reconciliation. In addition, because these non-GAAP measures
are not measures of financial performance under GAAP and are
susceptible to varying calculations, these measures, as defined by
us, may differ from and may not be comparable to similarly titled
measures used by other companies.
We define: (i) Non-GAAP earnings (loss) as net income
(loss), less non-cash valuation adjustments to liabilities, plus
interest expense, plus stock-based compensation expense, plus loss
on impairment of long-lived assets, plus loss on disposal of
property and equipment, and less gain on loan forgiveness; and
(ii) Non-GAAP earnings (loss) per diluted share as net
income (loss) per diluted common
share, less non-cash valuation adjustments to
liabilities, plus interest expense, plus stock-based compensation
expense, plus loss on impairment of long-lived assets, plus loss on
disposal of property and equipment, and less gain on loan
forgiveness, each on a per share basis. Non-GAAP
earnings per diluted share would include incremental shares in the
share count that are considered anti-dilutive in a GAAP net loss
position. However, no incremental shares apply when there is a
Non-GAAP loss per diluted share, as is the case for the periods
presented in this press release.
Non-GAAP earnings (loss) and Non-GAAP earnings (loss) per
diluted share are used to facilitate a comparison of our operating
performance on a consistent basis from period to period and provide
for a more complete understanding of factors and trends affecting
our business than GAAP measures alone. All of the items adjusted in
the Non-GAAP earnings (loss) to net loss and the related per share
calculations are either recurring non-cash items, or items
that management does not consider in assessing our on-going
operating performance. In the case of the non-cash items, such as
stock-based compensation expense and valuation adjustments to
assets and liabilities, including loss on impairments and
disposals, management believes that investors may find it useful to
assess our comparative operating performance because the measures
without such items are expected to be less susceptible to variances
in actual performance resulting from expenses that do not relate to
our core operations and are more reflective of other factors that
affect operating performance. In the case of items that do not
relate to our core operations, management believes that investors
may find it useful to assess our operating performance if the
measures are presented without these items because their financial
impact does not reflect ongoing operating
performance.
Non-GAAP earnings (loss) is not a measure of liquidity under
GAAP, or otherwise, and is not an alternative to cash flow from
continuing operating activities, despite the advantages regarding
the use and analysis of these measures as mentioned above. Non-GAAP
earnings (loss) and Non-GAAP earnings (loss) per diluted share, as
disclosed in this press release, have limitations as analytical
tools, and you should not consider these measures in isolation or
as a substitute for analysis of our results as reported under GAAP;
nor are these measures intended to be measures of liquidity or free
cash flow for our discretionary use.
To properly and prudently evaluate our business, we encourage
readers to review the GAAP financial statements included elsewhere
in this press release, and not rely on any single financial measure
to evaluate our business. Reconciliations of Non-GAAP earnings
(loss) to net loss, the most directly comparable GAAP-based
measure, as well as Non-GAAP earnings (loss) per diluted share to
net loss per diluted share, the most directly comparable GAAP-based
measure, are included in this press release. We strongly urge
readers to review these reconciliations, along with the
consolidated financial statements included elsewhere in this press
release.
Corporate Contact:
AudioEye, Inc.
Dr. Carr Bettis, Executive
Chairman
cbettis@audioeye.com
Investor Contact:
Matt
Glover or Tom Colton
AEYE@gatewayir.com
(949) 574-3860
AUDIOEYE, INC.
|
STATEMENTS OF
OPERATIONS
|
(unaudited)
|
|
|
|
Three months
ended
June 30,
|
|
|
Six months
ended
June 30,
|
|
(in thousands,
except per share data)
|
|
2021
|
|
|
2020
|
|
|
2021
|
|
|
2020
|
|
Revenue
|
|
$
|
6,021
|
|
|
$
|
5,283
|
|
|
$
|
11,809
|
|
|
$
|
9,544
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
revenue
|
|
|
1,512
|
|
|
|
1,607
|
|
|
|
2,865
|
|
|
|
2,927
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
|
4,509
|
|
|
|
3,676
|
|
|
|
8,944
|
|
|
|
6,617
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling and
marketing
|
|
|
3,380
|
|
|
|
1,705
|
|
|
|
6,134
|
|
|
|
3,523
|
|
Research and
development
|
|
|
1,307
|
|
|
|
265
|
|
|
|
2,339
|
|
|
|
598
|
|
General and
administrative
|
|
|
2,917
|
|
|
|
2,556
|
|
|
|
6,327
|
|
|
|
4,988
|
|
Total operating
expenses
|
|
|
7,604
|
|
|
|
4,526
|
|
|
|
14,800
|
|
|
|
9,109
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
loss
|
|
|
(3,095)
|
|
|
|
(850)
|
|
|
|
(5,856)
|
|
|
|
(2,492)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in fair value
of warrant liability
|
|
|
—
|
|
|
|
(501)
|
|
|
|
—
|
|
|
|
(473)
|
|
Gain on loan
forgiveness
|
|
|
1,316
|
|
|
|
—
|
|
|
|
1,316
|
|
|
|
—
|
|
Interest
expense
|
|
|
(5)
|
|
|
|
(56)
|
|
|
|
(9)
|
|
|
|
(106)
|
|
Total other income
(expense)
|
|
|
1,311
|
|
|
|
(557)
|
|
|
|
1,307
|
|
|
|
(579)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
|
(1,784)
|
|
|
|
(1,407)
|
|
|
|
(4,549)
|
|
|
|
(3,071)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends on Series A
Convertible Preferred Stock
|
|
|
(58)
|
|
|
|
(12)
|
|
|
|
(69)
|
|
|
|
(26)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss available to
common stockholders
|
|
$
|
(1,842)
|
|
|
$
|
(1,419)
|
|
|
$
|
(4,618)
|
|
|
$
|
(3,097)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per common
share-basic and diluted
|
|
$
|
(0.17)
|
|
|
$
|
(0.16)
|
|
|
$
|
(0.43)
|
|
|
$
|
(0.35)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding-basic and diluted
|
|
|
10,992
|
|
|
|
8,937
|
|
|
|
10,726
|
|
|
|
8,907
|
|
AUDIOEYE, INC.
|
BALANCE
SHEETS
|
(unaudited)
|
|
|
|
June 30,
|
|
|
December 31,
|
|
(in thousands,
except per share data)
|
|
2021
|
|
|
2020
|
|
ASSETS
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
|
Cash
|
|
$
|
24,751
|
|
|
$
|
9,095
|
|
Accounts receivable,
net of allowance for doubtful accounts of $146 and $79,
respectively
|
|
|
3,762
|
|
|
|
5,096
|
|
Deferred costs, short
term
|
|
|
142
|
|
|
|
152
|
|
Prepaid expenses and
other current assets
|
|
|
453
|
|
|
|
288
|
|
Total current
assets
|
|
|
29,108
|
|
|
|
14,631
|
|
|
|
|
|
|
|
|
|
|
Property and
equipment, net of accumulated depreciation of $244 and $209,
respectively
|
|
|
153
|
|
|
|
91
|
|
Right of use
assets
|
|
|
508
|
|
|
|
617
|
|
Deferred costs, long
term
|
|
|
66
|
|
|
|
77
|
|
Intangible assets,
net of accumulated amortization of $4,876 and $4,328,
respectively
|
|
|
2,483
|
|
|
|
2,137
|
|
Goodwill
|
|
|
701
|
|
|
|
701
|
|
Total
assets
|
|
$
|
33,019
|
|
|
$
|
18,254
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
Accounts payable and
accrued expenses
|
|
$
|
3,175
|
|
|
$
|
2,190
|
|
Finance lease
liabilities
|
|
|
69
|
|
|
|
49
|
|
Operating lease
liabilities
|
|
|
240
|
|
|
|
229
|
|
Deferred
revenue
|
|
|
5,972
|
|
|
|
6,328
|
|
Term loan, short
term
|
|
|
—
|
|
|
|
219
|
|
Total current
liabilities
|
|
|
9,456
|
|
|
|
9,015
|
|
|
|
|
|
|
|
|
|
|
Long term
liabilities:
|
|
|
|
|
|
|
|
|
Finance lease
liabilities
|
|
|
71
|
|
|
|
12
|
|
Operating lease
liabilities
|
|
|
304
|
|
|
|
427
|
|
Deferred
revenue
|
|
|
34
|
|
|
|
83
|
|
Term loan, long
term
|
|
|
—
|
|
|
|
1,083
|
|
Total
liabilities
|
|
|
9,865
|
|
|
|
10,620
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
|
|
|
|
Preferred stock,
$0.00001 par value, 10,000 shares authorized
|
|
|
|
|
|
|
|
|
Series A Convertible
Preferred Stock, $0.00001 par value, 200 shares designated, zero
and 90 shares issued and outstanding as of June 30, 2021 and
December 31, 2020, respectively
|
|
|
—
|
|
|
|
1
|
|
Common stock,
$0.00001 par value, 50,000 shares authorized, 11,277 and 10,130
shares issued and outstanding as of June 30, 2021 and December 31,
2020, respectively
|
|
|
1
|
|
|
|
1
|
|
Additional paid-in
capital
|
|
|
84,786
|
|
|
|
64,716
|
|
Accumulated
deficit
|
|
|
(61,633)
|
|
|
|
(57,084)
|
|
Total stockholders'
equity
|
|
|
23,154
|
|
|
|
7,634
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and
stockholders' equity
|
|
$
|
33,019
|
|
|
$
|
18,254
|
|
AUDIOEYE,
INC.
|
RECONCILIATIONS OF
GAAP to NON-GAAP FINANCIAL MEASURES
|
(unaudited)
|
|
|
|
Three months
ended
June 30,
|
|
|
Six months
ended
June 30,
|
|
(in thousands,
except per share data)
|
|
2021
|
|
|
2020
|
|
|
2021
|
|
|
2020
|
|
Non-GAAP Earnings
(Loss) Reconciliation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
(GAAP)
|
|
$
|
(1,784)
|
|
|
$
|
(1,407)
|
|
|
$
|
(4,549)
|
|
|
$
|
(3,071)
|
|
Non-cash valuation
adjustments to liabilities
|
|
|
—
|
|
|
|
501
|
|
|
|
—
|
|
|
|
473
|
|
Interest
expense
|
|
|
5
|
|
|
|
56
|
|
|
|
9
|
|
|
|
106
|
|
Stock-based
compensation expense
|
|
|
1,763
|
|
|
|
659
|
|
|
|
3,544
|
|
|
|
915
|
|
Loss on impairment of
long-lived assets
|
|
|
—
|
|
|
|
—
|
|
|
|
10
|
|
|
|
—
|
|
Loss on disposal of
property and equipment
|
|
|
5
|
|
|
|
—
|
|
|
|
12
|
|
|
|
—
|
|
Gain on loan
forgiveness
|
|
|
(1,316)
|
|
|
|
—
|
|
|
|
(1,316)
|
|
|
|
—
|
|
Non-GAAP
loss
|
|
$
|
(1,327)
|
|
|
$
|
(191)
|
|
|
$
|
(2,290)
|
|
|
$
|
(1,577)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Earnings
(Loss) per Diluted Share Reconciliation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per common
share (GAAP) — diluted
|
|
$
|
(0.17)
|
|
|
$
|
(0.16)
|
|
|
$
|
(0.43)
|
|
|
$
|
(0.35)
|
|
Non-cash valuation
adjustments to liabilities
|
|
|
—
|
|
|
|
0.06
|
|
|
|
—
|
|
|
|
0.05
|
|
Interest
expense
|
|
|
—
|
|
|
|
0.01
|
|
|
|
—
|
|
|
|
0.01
|
|
Stock-based
compensation expense
|
|
|
0.16
|
|
|
|
0.07
|
|
|
|
0.33
|
|
|
|
0.10
|
|
Loss on impairment of
long-lived assets
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Loss on disposal of
property and equipment
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Gain on loan
forgiveness
|
|
|
(0.12)
|
|
|
|
—
|
|
|
|
(0.12)
|
|
|
|
—
|
|
Non-GAAP loss per
diluted share (1)
|
|
$
|
(0.13)
|
|
|
$
|
(0.02)
|
|
|
$
|
(0.22)
|
|
|
$
|
(0.19)
|
|
Diluted weighted
average shares (2)
|
|
|
10,992
|
|
|
|
8,937
|
|
|
|
10,726
|
|
|
|
8,907
|
|
|
|
(1)
|
Non-GAAP earnings per
adjusted diluted share for our common stock is computed using the
more dilutive of the two-class method or the if-converted
method.
|
|
|
(2)
|
The number of diluted
weighted average shares used for this calculation is the same as
the weighted average common shares outstanding share count when the
Company reports a GAAP and non-GAAP net loss.
|
View original content to download
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SOURCE AudioEye, Inc.