Twenty-Fifth Consecutive Period of Record
Revenue
TUCSON,
Ariz., May 5, 2022 /PRNewswire/ --
AudioEye, Inc. (NASDAQ: AEYE), an industry-leading SaaS
accessibility platform delivering website accessibility compliance
to businesses of all sizes, reported financial results for the
first quarter ended March 31,
2022.
"AudioEye had a great first quarter of 2022, with revenues
continuing to accelerate from Q4 2021 due to both organic growth
and the acquisition of the Bureau of Internet Accessibility in
March 2022. We are pleased to report
revenue exceeded the guidance range provided," said AudioEye CEO
David Moradi.
First Quarter 2022 Financial Results
- Total revenue increased approximately 19% to a record
$6.9M from $5.8M in the same prior year period.
- Annual Recurring Revenue (ARR) as of March 31, 2022, increased 22% to $28.1M from $23.0M
as of March 31, 2021.
- Gross profit increased to a record $5.2M (75.2% of total revenue) from $4.4M (76.6% of total revenue) in the same prior
year period. 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 22% to $8.8M from $7.2M in
the same prior year period. The increase in operating expenses was
due primarily to increases in sales and marketing and research and
development as the Company continues to build a best-in-class
product offering.
- Net loss available to common stockholders was $3.6M, or $(0.32)
per share, compared to $2.8M, or
$(0.27) 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 Q1 2022 was $1.4M, or $(0.12)
per share, compared to $0.7M, or
$(0.07) per share in the same prior
year period. The non-GAAP net loss and EPS performance reflects
adjustments primarily for stock-based compensation expense,
litigation expense and acquisition-related costs.
- On March 31, 2022, the Company
had $12.0M in cash, compared to
$19.0M on December 31, 2021. The decrease in cash was
primarily driven by the $5 million
initial payment made for the acquisition of Bureau of Internet
Accessibility ("BOIA"), litigation expense and other general
operating expenses.
Other Updates
- 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.
- In January 2022, AudioEye
appointed David Moradi as Chief
Executive Officer. Mr. Moradi had served as Interim CEO of AudioEye
for the prior 18 months.
- Customer count was 74,000 as of March
31, 2022, compared to 68,000 as of March 31, 2021. The customer count decreased from
December 31, 2021, due to an ongoing
negotiation with a digital agency upgrading from a basic tier to a
more advanced offering. Excluding the impact from this digital
agency, the Company's customer count grew sequentially.
- AudioEye released the first-of-its-kind white paper for the
accessibility industry titled "Building for Digital Accessibility
at Scale," outlining the state of accessibility and the company's
innovative approach to closing the web accessibility gap.
Financial Outlook
The Company expects revenue to be
between $7.4 and $7.6 million in the second quarter of 2022,
representing 25% year-over-year growth at the midpoint.
Conference Call Information
AudioEye management will
hold a conference call today, May 5,
2022, at 4:30 p.m. Eastern
time (1:30 p.m. Pacific time)
to discuss these results, followed by a question-and-answer
period.
Date: Thursday, May 5, 2022
Time: 4:30 p.m. Eastern time
(1:30 p.m. Pacific time)
U.S. dial-in number: 877-545-0320
International number: 973-528-0002
Access code: 278583
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 MZ Group at 561-489-5315.
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 May 19,
2022.
Toll-free replay number: 877-481-4010
International replay number: 919-882-2331
Replay passcode: 45396
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 ARR 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,
sales channels and BOIA offerings; 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,
2021, filed with the SEC on March
11, 2022, 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
annual recurring revenue ("ARR") as a key operating metric and a
key indicator of our overall business. We also use ARR 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 ARR as the sum of (i) for our Enterprise
channel, the total of the average annual 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, multiplied by 12 months. This determination includes
both annual and monthly contracts for recurring products. Some of
our contracts are cancelable, which may impact future ARR. ARR
excludes revenue from our PDF remediation services business, Mobile
App report business and other report delivery services.
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 acquisition and
litigation-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 financial statements 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),
plus interest expense, plus stock-based compensation expense, plus
certain litigation expense, plus certain acquisition expense, plus
loss on impairment of long-lived assets, and plus loss on disposal
of property and equipment; and (ii) Non-GAAP earnings (loss) per
diluted share as net income (loss) per diluted common share, plus
interest expense, plus stock-based compensation expense, plus
certain litigation expense, plus certain acquisition expense, plus
loss on impairment of long-lived assets, and plus loss on disposal
of property and equipment, 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, 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 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 in this press
release.
Corporate Contact:
AudioEye, Inc.
Dr. Carr Bettis, Executive
Chairman
cbettis@audioeye.com
Investor Contact:
Brian M.
Prenoveau, CFA
MZ Group – MZ North America
AEYE@mzgroup.us561-489-5315
AUDIOEYE, INC.
STATEMENTS OF
OPERATIONS
(unaudited)
|
|
|
|
|
|
|
Three months ended
March 31,
|
|
(in thousands,
except per share data)
|
|
2022
|
|
|
2021
|
|
Revenue
|
|
$
|
6,906
|
|
|
$
|
5,788
|
|
|
|
|
|
|
|
|
|
|
Cost of
revenue
|
|
|
1,710
|
|
|
|
1,353
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
5,196
|
|
|
|
4,435
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Selling and marketing
|
|
|
3,726
|
|
|
|
2,754
|
|
Research and development
|
|
|
1,529
|
|
|
|
1,032
|
|
General and administrative
|
|
|
3,556
|
|
|
|
3,410
|
|
Total operating expenses
|
|
|
8,811
|
|
|
|
7,196
|
|
|
|
|
|
|
|
|
|
|
Operating
loss
|
|
|
(3,615)
|
|
|
|
(2,761)
|
|
|
|
|
|
|
|
|
|
|
Other
expense:
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
(1)
|
|
|
|
(4)
|
|
Total other expense
|
|
|
(1)
|
|
|
|
(4)
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
|
(3,616)
|
|
|
|
(2,765)
|
|
|
|
|
|
|
|
|
|
|
Dividends on Series A
Convertible Preferred Stock
|
|
|
—
|
|
|
|
(11)
|
|
|
|
|
|
|
|
|
|
|
Net loss available to
common stockholders
|
|
$
|
(3,616)
|
|
|
$
|
(2,776)
|
|
|
|
|
|
|
|
|
|
|
Net loss per common
share-basic and diluted
|
|
$
|
(0.32)
|
|
|
$
|
(0.27)
|
|
|
|
|
|
|
|
|
|
|
Weighted average common
shares outstanding-basic and diluted
|
|
|
11,444
|
|
|
|
10,457
|
|
AUDIOEYE, INC.
BALANCE
SHEETS
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
March
31,
|
|
|
December 31,
|
|
(in thousands,
except per share data)
|
|
2022
|
|
|
2021
|
|
ASSETS
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
|
Cash
|
|
$
|
11,962
|
|
|
$
|
18,966
|
|
Accounts receivable, net
|
|
|
4,984
|
|
|
|
5,311
|
|
Deferred costs, short term
|
|
|
87
|
|
|
|
103
|
|
Prepaid expenses and other current assets
|
|
|
703
|
|
|
|
451
|
|
Total current assets
|
|
|
17,736
|
|
|
|
24,831
|
|
|
|
|
|
|
|
|
|
|
Property and equipment, net
|
|
|
183
|
|
|
|
196
|
|
Right of use assets
|
|
|
1,573
|
|
|
|
834
|
|
Deferred costs, long term
|
|
|
28
|
|
|
|
34
|
|
Intangible assets, net
|
|
|
6,822
|
|
|
|
2,622
|
|
Goodwill
|
|
|
4,314
|
|
|
|
701
|
|
Other
|
|
|
95
|
|
|
|
95
|
|
Total assets
|
|
$
|
30,751
|
|
|
$
|
29,313
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
Accounts payable and accrued expenses
|
|
$
|
3,642
|
|
|
$
|
3,542
|
|
Finance lease liabilities
|
|
|
52
|
|
|
|
57
|
|
Operating lease liabilities
|
|
|
530
|
|
|
|
415
|
|
Deferred revenue
|
|
|
7,500
|
|
|
|
7,068
|
|
Contingent consideration
|
|
|
1,040
|
|
|
|
134
|
|
Total current liabilities
|
|
|
12,764
|
|
|
|
11,216
|
|
|
|
|
|
|
|
|
|
|
Long term
liabilities:
|
|
|
|
|
|
|
|
|
Finance lease liabilities
|
|
|
33
|
|
|
|
45
|
|
Operating lease liabilities
|
|
|
1,100
|
|
|
|
450
|
|
Deferred revenue
|
|
|
10
|
|
|
|
5
|
|
Contingent consideration, long term
|
|
|
1,743
|
|
|
|
—
|
|
Total
liabilities
|
|
|
15,650
|
|
|
|
11,716
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
|
|
|
|
Preferred stock, $0.00001 par value, 10,000 shares
authorized
|
|
|
|
|
|
|
|
|
Common stock, $0.00001 par value, 50,000 shares authorized,
11,474 and 11,435
shares issued and outstanding as of March 31,
2022 and December 31, 2021, respectively
|
|
|
1
|
|
|
|
1
|
|
Additional paid-in capital
|
|
|
90,009
|
|
|
|
88,889
|
|
Accumulated deficit
|
|
|
(74,909)
|
|
|
|
(71,293)
|
|
Total stockholders' equity
|
|
|
15,101
|
|
|
|
17,597
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and
stockholders' equity
|
|
$
|
30,751
|
|
|
$
|
29,313
|
|
AUDIOEYE,
INC.
RECONCILIATIONS OF
GAAP to NON-GAAP FINANCIAL MEASURES
(unaudited)
|
|
|
Three months ended
March 31,
|
|
(in thousands,
except per share data)
|
|
2022
|
|
|
2021
|
|
Non-GAAP Earnings
(Loss) Reconciliation
|
|
|
|
|
|
|
|
|
Net loss
(GAAP)
|
|
$
|
(3,616)
|
|
|
$
|
(2,765)
|
|
Interest expense
|
|
|
1
|
|
|
|
4
|
|
Stock-based compensation expense
|
|
|
1,145
|
|
|
|
1,781
|
|
Acquisition expense (1)
|
|
|
198
|
|
|
|
—
|
|
Litigation expense (2)
|
|
|
862
|
|
|
|
227
|
|
Loss on impairment of long-lived assets
|
|
|
—
|
|
|
|
10
|
|
Loss on disposal of property and equipment
|
|
|
—
|
|
|
|
7
|
|
Non-GAAP loss
|
|
$
|
(1,410)
|
|
|
$
|
(736)
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Earnings
(Loss) per Diluted Share Reconciliation
|
|
|
|
|
|
|
|
|
Net loss per common
share (GAAP) — diluted
|
|
$
|
(0.32)
|
|
|
$
|
(0.27)
|
|
Interest expense
|
|
|
—
|
|
|
|
—
|
|
Stock-based compensation expense
|
|
|
0.10
|
|
|
|
0.18
|
|
Acquisition expense (1)
|
|
|
0.02
|
|
|
|
—
|
|
Litigation expense (2)
|
|
|
0.08
|
|
|
|
0.02
|
|
Loss on impairment of long-lived assets
|
|
|
—
|
|
|
|
—
|
|
Loss on disposal of property and equipment
|
|
|
—
|
|
|
|
—
|
|
Non-GAAP loss per
diluted share (3)
|
|
$
|
(0.12)
|
|
|
$
|
(0.07)
|
|
Diluted weighted
average shares (4)
|
|
|
11,444
|
|
|
|
10,457
|
|
|
|
(1)
|
Represents legal and
accounting fees associated with the BOIA acquisition.
|
(2)
|
Represents legal
expenses related primarily to 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.
|
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SOURCE AudioEye, Inc.