TUCSON, Ariz., March 10, 2022 /PRNewswire/ -- AudioEye,
Inc. (NASDAQ: AEYE), the industry-leading digital
accessibility platform delivering website accessibility compliance
to businesses of all sizes, reported financial results for the
fourth quarter and full year ended December
31, 2021.
"As noted in our preliminary outlook for fourth-quarter results,
we are pleased to confirm that we achieved revenue at the high end
of our guidance range of $6.5
million, representing accelerated growth from prior
quarters," said David Moradi, CEO of
AudioEye. "Our strong results show that AudioEye's hybrid approach,
which pairs industry-leading automation and human-assisted
technology, resonates with both new and existing customers, filling
the market gap for an affordable and scalable accessibility
solution."
"We are excited to announce the acquisition of the Bureau of
Internet Accessibility ("BoIA"). The acquisition of BoIA adds a key
dimension to our product suite for those customers who prefer to
fix accessibility issues at the source, giving us an end-to-end
solution for all customers in their accessibility journey."
Fourth Quarter 2021 Financial Results
- Total revenue increased 16% to a record $6.5M from $5.6M in
the same prior year period.
- Monthly Recurring Revenue (MRR) as of December 31, 2021 increased 16% to a record
$2.2M from $1.9M as of December 31,
2020.
- Gross profit increased to a record $4.8M (74% of total revenue) from $4.1M (73% of total revenue) in the same prior
year period. As in previous periods, the increase in gross profit
was primarily due to continued recurring revenue growth and
continued improvement in automation in product offerings.
- Total operating expenses increased to $9.8M from $7.1M 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 build
a best-in-class product and support scalable and profitable
long-term growth.
- Net loss available to common stockholders was $5.0M or $(0.44)
per share, compared to $3.0M or
$(0.30) 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 increased to $1.8M or $(0.16)
per share, compared to the same prior year period of $0.9M or $(0.09)
per share. The non-GAAP net loss and EPS performance reflects
adjustments primarily for stock-based compensation expense and
patent litigation expense.
- At quarter end, the Company had $19.0M in cash, compared to $9.1M on December 31,
2020.
Full Year 2021 Financial Results
- Full year 2021 revenue increased 20% to a record $24.5M from $20.5M
in 2020.
- Gross profit increased to $18.4M
(75% of total revenue) from $14.5M
(71% of total revenue) in 2020.
- Total operating expenses increased 57% to $33.9M from $21.6M
in 2020. The increase in total operating expense was primarily
driven by investments in research and development ($4.1M increase, or 331%) and sales and marketing
($6.1M increase, or 73%). General
& administrative expenses also increased by $2.0M, or 17% from the prior year period.
- Net loss available to common stockholders was $14.2M or $(1.29)
per share, compared to $7.2M or
$(0.77) per share in 2020 primarily
due to the items noted above.
- Non-GAAP net loss increased to $5.8M or $(0.53)
per share in 2021 compared to $2.6M
or $(0.28) per share in 2020. The
non-GAAP earnings and EPS reflects adjustments for stock-based
compensation, patent litigation expense and gain on loan
forgiveness.
Other Updates
- In January 2022, AudioEye
appointed David Moradi as Chief
Executive Officer. Mr. Moradi has served as Interim CEO of AudioEye
for the past 18 months.
- Continued to grow the client roster to approximately 82,000
customers as of December 31, 2021,
representing an increase of approximately 156% over December 31, 2020.
- In December 2021, AudioEye
acquired Square ADA, bringing web accessibility technology to
Squarespace users.
- In Q4 2021, AudioEye renewed a significant contract with a
global HR and payroll software and service company and signed a
major agency and a large financial institution.
- WP Engine has selected AudioEye as a digital accessibility
technology and services partner, which will help owners of more
than 1.5 million WordPress sites provide accessible digital
experiences to all their users.
- On March 9, 2022, the Company
acquired the Bureau of Internet Accessibility, a leading automated
testing platform combined with a seamless guide for website owners
and developers to fix accessibility issues at the source.
- Management has deemed the Company to have effective disclosure
controls and procedures and internal controls of financial
reporting, in compliance with SOX 404, as of December 31, 2021.
Financial Outlook
The Company expects revenue to be
between $6.7M and $6.9M in the first quarter, representing year
over year growth of 17% at the midpoint.
Conference Call Information
AudioEye management will
host the conference call, followed by a question and answer
period.
Date: Thursday, March 10, 2022
Time: 4:30 p.m. Eastern time
(1:30 p.m. Pacific time)
U.S. dial-in number: 1-855-327-6837
International number: 1-631-891-4304
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 today through March 17,
2022.
Toll-free replay number: 1-844-512-2921
International replay number: 1-412-317-6671
Replay ID: 10018308
About AudioEye
AudioEye is an industry-leading digital
accessibility platform delivering ADA and WCAG compliance at scale.
By combining easy-to-use technology and subject matter expertise,
AudioEye helps companies and content creators solve every aspect of
web accessibility--from finding and resolving issues to navigating
legal compliance, to ongoing monitoring and upkeep. Trusted by the
FCC, ADP, SSA, Samsung, and others, AudioEye delivers automated
remediations and continuous monitoring for accessibility issues
without making fundamental changes to website architecture, source
code, or browser-based tools. Join us on our mission to eradicate
barriers to digital access, 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", "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; inherent
uncertainties and costs associated with litigation; 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
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
monthly fee amount for all paying customers at the date of
determination, in each case, assuming no changes to the
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 business 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,
such as severance related to strategic shift. 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
Financial Statements presented on a GAAP basis in this Annual
Report on Form 10-K 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 certain
litigation expense, plus certain severance 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
certain litigation expense, plus certain severance 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 Annual Report on Form
10-K.
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, 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 Annual Report on Form 10-K, 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
|
|
|
|
Year ended
December 31,
|
|
(in thousands,
except per share data)
|
|
2021
|
|
|
2020
|
|
Revenue
|
|
$
|
24,503
|
|
|
$
|
20,475
|
|
|
|
|
|
|
|
|
|
|
Cost of
revenue
|
|
|
6,121
|
|
|
|
5,961
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
|
18,382
|
|
|
|
14,514
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Selling and
marketing
|
|
|
14,621
|
|
|
|
8,472
|
|
Research and
development
|
|
|
5,304
|
|
|
|
1,230
|
|
General and
administrative
|
|
|
13,970
|
|
|
|
11,945
|
|
Total operating
expenses
|
|
|
33,895
|
|
|
|
21,647
|
|
|
|
|
|
|
|
|
|
|
Operating
loss
|
|
|
(15,513)
|
|
|
|
(7,133)
|
|
|
|
|
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
Gain on loan
forgiveness
|
|
|
1,316
|
|
|
|
—
|
|
Change in fair value
of warrant liability
|
|
|
—
|
|
|
|
120
|
|
Interest
expense
|
|
|
(12)
|
|
|
|
(145)
|
|
Total other income
(expense)
|
|
|
1,304
|
|
|
|
(25)
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
|
(14,209)
|
|
|
|
(7,158)
|
|
|
|
|
|
|
|
|
|
|
Dividends on Series A
Convertible Preferred Stock
|
|
|
(69)
|
|
|
|
(51)
|
|
|
|
|
|
|
|
|
|
|
Net loss available to
common stockholders
|
|
$
|
(14,278)
|
|
|
$
|
(7,209)
|
|
|
|
|
|
|
|
|
|
|
Net loss per common
share-basic and diluted
|
|
$
|
(1.29)
|
|
|
$
|
(0.77)
|
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding-basic and diluted
|
|
|
11,040
|
|
|
|
9,313
|
|
AUDIOEYE,
INC.
|
BALANCE
SHEETS
|
DECEMBER 31, 2021
AND 2020
|
|
|
|
December 31,
|
|
|
December 31,
|
|
(in thousands,
except per share data)
|
|
2021
|
|
|
2020
|
|
ASSETS
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
|
Cash
|
|
$
|
18,966
|
|
|
$
|
9,095
|
|
Accounts receivable,
net of allowance for doubtful accounts of $157 and $79,
respectively
|
|
|
5,311
|
|
|
|
5,096
|
|
Deferred costs, short
term
|
|
|
103
|
|
|
|
152
|
|
Prepaid expenses and
other current assets
|
|
|
451
|
|
|
|
288
|
|
Total current
assets
|
|
|
24,831
|
|
|
|
14,631
|
|
|
|
|
|
|
|
|
|
|
Property and
equipment, net of accumulated depreciation of $210 and $209,
respectively
|
|
|
196
|
|
|
|
91
|
|
Right of use
assets
|
|
|
834
|
|
|
|
617
|
|
Deferred costs, long
term
|
|
|
34
|
|
|
|
77
|
|
Intangible assets,
net of accumulated amortization of $5,285 and $4,328,
respectively
|
|
|
2,622
|
|
|
|
2,137
|
|
Goodwill
|
|
|
701
|
|
|
|
701
|
|
Other
|
|
|
95
|
|
|
|
—
|
|
Total
assets
|
|
$
|
29,313
|
|
|
$
|
18,254
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
Accounts payable and
accrued expenses
|
|
$
|
3,542
|
|
|
$
|
2,190
|
|
Finance lease
liabilities
|
|
|
57
|
|
|
|
49
|
|
Operating lease
liabilities
|
|
|
415
|
|
|
|
229
|
|
Deferred
revenue
|
|
|
7,068
|
|
|
|
6,328
|
|
Contingent
consideration
|
|
|
134
|
|
|
|
—
|
|
Term loan, short
term
|
|
|
—
|
|
|
|
219
|
|
Total current
liabilities
|
|
|
11,216
|
|
|
|
9,015
|
|
|
|
|
|
|
|
|
|
|
Long term
liabilities:
|
|
|
|
|
|
|
|
|
Finance lease
liabilities
|
|
|
45
|
|
|
|
12
|
|
Operating lease
liabilities
|
|
|
450
|
|
|
|
427
|
|
Deferred
revenue
|
|
|
5
|
|
|
|
83
|
|
Term loan, long
term
|
|
|
—
|
|
|
|
1,083
|
|
Total
liabilities
|
|
|
11,716
|
|
|
|
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 authorized,
zero and 90 shares issued and outstanding as of December 31, 2021
and 2020,
respectively
|
|
|
—
|
|
|
|
1
|
|
Common stock,
$0.00001 par value, 50,000 shares authorized, 11,435 and 10,130
shares issued and outstanding as of December 31, 2021 and 2020,
respectively
|
|
|
1
|
|
|
|
1
|
|
Additional paid-in
capital
|
|
|
88,889
|
|
|
|
64,716
|
|
Accumulated
deficit
|
|
|
(71,293)
|
|
|
|
(57,084)
|
|
Total stockholders'
equity
|
|
|
17,597
|
|
|
|
7,634
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and
stockholders' equity
|
|
$
|
29,313
|
|
|
$
|
18,254
|
|
AUDIOEYE,
INC.
|
RECONCILIATIONS OF
GAAP to NON-GAAP FINANCIAL MEASURES
|
(unaudited)
|
|
|
|
Three
months ended
|
|
|
Year ended
|
|
|
|
December 31,
|
|
|
December 31,
|
|
(in thousands,
except per share data)
|
|
2021
|
|
|
2020
|
|
|
2021
|
|
|
2020
|
|
Non-GAAP Earnings
(Loss) Reconciliation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
(GAAP)
|
|
$
|
(5,003)
|
|
|
$
|
(3,007)
|
|
|
$
|
(14,209)
|
|
|
$
|
(7,158)
|
|
Non-cash valuation
adjustments to liabilities
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(120)
|
|
Interest
expense
|
|
|
1
|
|
|
|
4
|
|
|
|
12
|
|
|
|
145
|
|
Stock-based
compensation expense
|
|
|
2,191
|
|
|
|
2,134
|
|
|
|
7,616
|
|
|
|
4,138
|
|
Severance expense
(1)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
360
|
|
Litigation expense
(2)
|
|
|
1,035
|
|
|
|
—
|
|
|
|
2,099
|
|
|
|
—
|
|
Loss on impairment of
long-lived assets
|
|
|
—
|
|
|
|
—
|
|
|
|
10
|
|
|
|
—
|
|
Loss on disposal of
property and equipment
|
|
|
—
|
|
|
|
—
|
|
|
|
12
|
|
|
|
—
|
|
Gain on loan
forgiveness
|
|
|
—
|
|
|
|
—
|
|
|
|
(1,316)
|
|
|
|
—
|
|
Non-GAAP
loss
|
|
$
|
(1,776)
|
|
|
$
|
(869)
|
|
|
$
|
(5,776)
|
|
|
$
|
(2,635)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Earnings
(Loss) per Diluted Share
Reconciliation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per common
share (GAAP) — diluted
|
|
$
|
(0.44)
|
|
|
$
|
(0.30)
|
|
|
$
|
(1.29)
|
|
|
$
|
(0.77)
|
|
Non-cash valuation
adjustments to liabilities
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(0.01)
|
|
Interest
expense
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.02
|
|
Stock-based
compensation expense
|
|
|
0.19
|
|
|
|
0.21
|
|
|
|
0.69
|
|
|
|
0.44
|
|
Severance expense
(1)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.04
|
|
Litigation expense
(2)
|
|
|
0.09
|
|
|
|
—
|
|
|
|
0.19
|
|
|
|
—
|
|
Loss on impairment of
long-lived assets
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Loss on disposal of
property and equipment
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Gain on loan
forgiveness
|
|
|
—
|
|
|
|
—
|
|
|
|
(0.12)
|
|
|
|
—
|
|
Non-GAAP loss per
diluted share (3)
|
|
$
|
(0.16)
|
|
|
$
|
(0.09)
|
|
|
$
|
(0.53)
|
|
|
$
|
(0.28)
|
|
Diluted weighted
average shares (4)
|
|
|
11,368
|
|
|
|
10,045
|
|
|
|
11,040
|
|
|
|
9,313
|
|
|
|
|
|
(1)
|
Represents severance
expense associated with the move of our technology center to
Portland, Oregon, and is exclusive of accrued vacation paid upon
termination of employment.
|
|
|
|
|
(2)
|
Represents legal
expenses towards patent litigation pursued by the
Company.
|
|
|
|
|
(3)
|
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.
|
|
|
|
|
(4)
|
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
multimedia:https://www.prnewswire.com/news-releases/audioeye-reports-record-fourth-quarter-and-full-year-2021-results-301500526.html
SOURCE AudioEye, Inc.