Twenty-Sixth Consecutive Period of Record
Revenue
TUCSON,
Ariz., Aug. 9, 2022 /PRNewswire/
-- AudioEye, Inc. (NASDAQ: AEYE) (the "Company"), an
industry-leading SaaS accessibility platform delivering website
accessibility compliance to businesses of all sizes, reported
financial results for the second quarter ended June 30, 2022.
"AudioEye delivered revenue at the high end of our guidance with
26% growth while also shrinking non-GAAP operating loss per share
to ($0.02), with a GAAP loss per
share of ($0.23)," said AudioEye CEO
David Moradi. "A scalable platform
coupled with human-assisted technology is the preferred solution
for businesses to address accessibility in a cost effective and
timely manner. We will continue investing in our platform and are
excited to deliver further innovations to our product in the second
half."
Second Quarter 2022 Financial Results
- Total revenue increased approximately 26% to a record
$7.6M from $6.0M in the same prior year period. Both the
Partner and Marketplace and Enterprise channels contributed to
revenue growth.
- Annual Recurring Revenue (ARR) as of June 30, 2022, increased 19% to $28.7M from $24.1M
as of June 30, 2021.
- Gross profit increased to a record $5.7M, or 75.7% of total revenue, from
$4.5M, or 74.9% of total revenue, in
the same prior year period. The increase in gross profit was
primarily due to revenue growth and continued improvement in the
automation of our product offerings.
- Total operating expenses increased 10% to $8.3M from $7.6M in
the same prior year period. The increase in operating expenses was
due primarily to general and administrative costs related to the
addition of the Bureau of Internet Accessibility in March 2022 and non-recurring items.
- Net loss available to common stockholders was $2.6M, or $(0.23)
per share, compared to $1.8M, or
$(0.17) per share, in the same prior
year period. The greater net loss was primarily due to a gain on
loan forgiveness recognized in the second quarter of 2021.
Excluding the non-recurring gain, net loss would have improved
$0.5m from June 2021.
- Non-GAAP net loss in the quarter was $0.2M, or $(0.02)
per share, compared to $0.6M, or
$(0.06) per share, in the same prior
year period. The non-GAAP net loss and EPS performance reflects
adjustments primarily for non-cash stock-based compensation
expense, depreciation and amortization expense and non-recurring
items.
On June 30, 2022, the Company had
$9.3M in cash compared to
$12.0M on March 31, 2022. The cash change was in line with
expectations and included $0.4
million for stock repurchase and $1.0m for payments on non-recurring
items.
Other Updates
- In July, the Company formally announced two partnership deals
with Celerant and Vendasta. These partners are the leaders in their
respective industries and have the potential to generate
significant revenue for AudioEye over the long term.
- On June 2, 2022, the Company
announced a $3 million stock
repurchase program. As of June 30,
2022, we have repurchased approximately $410,000 in shares under this program.
- As of June 30, 2022, AudioEye had
approximately 76,000 customers, up from 75,000 customers on
June 30, 2021. Customer count
increased primarily due to continued expansion in the number of
customers in the Partner and Marketplace channel. In Q1 2022, the
customer count decreased due to re-negotiations with a digital
agency upgrading from a basic tier to a more advanced offering. We
are pleased to confirm that a new agreement has been signed with
this agency in August 2022 and is
expected to result in higher ARR and customer count over the next
few quarters.
Financial Outlook
The Company expects revenue to equal
between $7.65 and $7.85 million in the third quarter of 2022,
representing 25% year-over-year growth at the midpoint.
Conference Call Information
AudioEye management will
hold a conference call today, August 9,
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: Tuesday, August 9, 2022
Time: 4:30 p.m. Eastern time
(1:30 p.m. Pacific time)
U.S. dial-in number: 844-826-3033
International number: 412-317-5185
Access code: 10169405
Please call the conference telephone number 5-10 minutes prior
to the start time. 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 August
23, 2022.
Toll-free replay number: 844-512-2921
International replay number: 412-317-6671
Replay passcode: 10169405
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, Samsung, Tommy Hilfiger,
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 or regarding the stock repurchase program 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 the
source of funds to be used to repurchase any shares under the
program, future cash flows of the Company, 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 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. 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.
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 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 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 depreciation and amortization expense,
plus stock-based compensation expense, plus non-cash valuation
adjustment to contingent consideration, plus certain litigation
expense, plus certain acquisition 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, plus interest expense, plus depreciation and
amortization expense, plus stock-based compensation expense, plus
non-cash valuation adjustment to contingent consideration, plus
certain litigation expense, plus certain acquisition 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, 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. The following table sets forth
reconciliations of Non-GAAP loss to net loss, the most directly
comparable GAAP-based measure, as well as Non-GAAP 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.
Investor Contact:
Brian M.
Prenoveau, CFA
AEYE@mzgroup.us
(561) 374-0177
AUDIOEYE, INC.
|
|
STATEMENTS OF
OPERATIONS
|
|
(unaudited)
|
|
|
|
|
|
Three months
ended
June 30,
|
|
|
Six months
ended
June 30,
|
|
(in thousands,
except per share data)
|
|
2022
|
|
|
2021
|
|
|
2022
|
|
|
2021
|
|
Revenue
|
|
$
|
7,569
|
|
|
$
|
6,021
|
|
|
$
|
14,475
|
|
|
$
|
11,809
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
revenue
|
|
|
1,841
|
|
|
|
1,512
|
|
|
|
3,551
|
|
|
|
2,865
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
5,728
|
|
|
|
4,509
|
|
|
|
10,924
|
|
|
|
8,944
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling
and marketing
|
|
|
3,425
|
|
|
|
3,380
|
|
|
|
7,151
|
|
|
|
6,134
|
|
Research
and development
|
|
|
1,406
|
|
|
|
1,307
|
|
|
|
2,935
|
|
|
|
2,339
|
|
General
and administrative
|
|
|
3,505
|
|
|
|
2,917
|
|
|
|
7,061
|
|
|
|
6,327
|
|
Total
operating expenses
|
|
|
8,336
|
|
|
|
7,604
|
|
|
|
17,147
|
|
|
|
14,800
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
loss
|
|
|
(2,608)
|
|
|
|
(3,095)
|
|
|
|
(6,223)
|
|
|
|
(5,856)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on
loan forgiveness
|
|
|
—
|
|
|
|
1,316
|
|
|
|
—
|
|
|
|
1,316
|
|
Interest
expense
|
|
|
(2)
|
|
|
|
(5)
|
|
|
|
(3)
|
|
|
|
(9)
|
|
Total
other income (expense)
|
|
|
(2)
|
|
|
|
1,311
|
|
|
|
(3)
|
|
|
|
1,307
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
|
(2,610)
|
|
|
|
(1,784)
|
|
|
|
(6,226)
|
|
|
|
(4,549)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends on Series A
Convertible Preferred
Stock
|
|
|
—
|
|
|
|
(58)
|
|
|
|
—
|
|
|
|
(69)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss available to
common stockholders
|
|
$
|
(2,610)
|
|
|
$
|
(1,842)
|
|
|
$
|
(6,226)
|
|
|
$
|
(4,618)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per common
share-basic and diluted
|
|
$
|
(0.23)
|
|
|
$
|
(0.17)
|
|
|
$
|
(0.54)
|
|
|
$
|
(0.43)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common
shares outstanding-
basic and diluted
|
|
|
11,489
|
|
|
|
10,992
|
|
|
|
11,467
|
|
|
|
10,726
|
|
AUDIOEYE, INC.
|
|
BALANCE
SHEETS
|
|
(unaudited)
|
|
|
|
|
|
June 30,
|
|
|
December 31,
|
|
(in thousands,
except per share data)
|
|
2022
|
|
|
2021
|
|
ASSETS
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
|
Cash
|
|
$
|
9,251
|
|
|
$
|
18,966
|
|
Accounts
receivable, net
|
|
|
5,148
|
|
|
|
5,311
|
|
Deferred
costs, short term
|
|
|
72
|
|
|
|
103
|
|
Prepaid
expenses and other current assets
|
|
|
681
|
|
|
|
451
|
|
Total
current assets
|
|
|
15,152
|
|
|
|
24,831
|
|
|
|
|
|
|
|
|
|
|
Property
and equipment, net
|
|
|
160
|
|
|
|
196
|
|
Right of
use assets
|
|
|
1,432
|
|
|
|
834
|
|
Deferred
costs, long term
|
|
|
23
|
|
|
|
34
|
|
Intangible
assets, net
|
|
|
6,548
|
|
|
|
2,622
|
|
Goodwill
|
|
|
4,317
|
|
|
|
701
|
|
Other
|
|
|
93
|
|
|
|
95
|
|
Total assets
|
|
$
|
27,725
|
|
|
$
|
29,313
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
Accounts
payable and accrued expenses
|
|
$
|
3,258
|
|
|
$
|
3,542
|
|
Finance
lease liabilities
|
|
|
48
|
|
|
|
57
|
|
Operating
lease liabilities
|
|
|
511
|
|
|
|
415
|
|
Deferred
revenue
|
|
|
7,093
|
|
|
|
7,068
|
|
Contingent
consideration
|
|
|
921
|
|
|
|
134
|
|
Total
current liabilities
|
|
|
11,831
|
|
|
|
11,216
|
|
|
|
|
|
|
|
|
|
|
Long term
liabilities:
|
|
|
|
|
|
|
|
|
Finance
lease liabilities
|
|
|
23
|
|
|
|
45
|
|
Operating
lease liabilities
|
|
|
984
|
|
|
|
450
|
|
Deferred
revenue
|
|
|
10
|
|
|
|
5
|
|
Contingent
consideration, long term
|
|
|
1,888
|
|
|
|
—
|
|
Total
liabilities
|
|
|
14,736
|
|
|
|
11,716
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
|
|
|
|
Preferred
stock, $0.00001 par value, 10,000 shares authorized
|
|
|
|
|
|
|
|
|
Common
stock, $0.00001 par value, 50,000 shares authorized, 11,481 and
11,435 shares issued and outstanding as of June 30,
2022 and December
31, 2021, respectively
|
|
|
1
|
|
|
|
1
|
|
Additional
paid-in capital
|
|
|
90,917
|
|
|
|
88,889
|
|
Accumulated deficit
|
|
|
(77,929)
|
|
|
|
(71,293)
|
|
Total
stockholders' equity
|
|
|
12,989
|
|
|
|
17,597
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and stockholders'
equity
|
|
$
|
27,725
|
|
|
$
|
29,313
|
|
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)
|
|
2022
|
|
|
2021
|
|
|
2022
|
|
|
2021
|
|
Non-GAAP Earnings
(Loss) Reconciliation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
(GAAP)
|
|
$
|
(2,610)
|
|
|
$
|
(1,784)
|
|
|
$
|
(6,226)
|
|
|
$
|
(4,549)
|
|
Non-cash
valuation adjustment to contingent
consideration
|
|
|
158
|
|
|
|
—
|
|
|
|
158
|
|
|
|
—
|
|
Interest
expense
|
|
|
2
|
|
|
|
5
|
|
|
|
3
|
|
|
|
9
|
|
Stock-based compensation expense
|
|
|
1,041
|
|
|
|
1,763
|
|
|
|
2,186
|
|
|
|
3,544
|
|
Acquisition expense (1)
|
|
|
42
|
|
|
|
—
|
|
|
|
240
|
|
|
|
—
|
|
Litigation
expense (2)
|
|
|
499
|
|
|
|
367
|
|
|
|
1,361
|
|
|
|
594
|
|
Depreciation and amortization
|
|
|
622
|
|
|
|
317
|
|
|
|
1,009
|
|
|
|
600
|
|
Loss on
impairment of long-lived assets
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
10
|
|
Loss on
disposal of property and equipment
|
|
|
7
|
|
|
|
5
|
|
|
|
7
|
|
|
|
12
|
|
Gain on
loan forgiveness
|
|
|
—
|
|
|
|
(1,316)
|
|
|
|
—
|
|
|
|
(1,316)
|
|
Non-GAAP
loss
|
|
$
|
(239)
|
|
|
$
|
(643)
|
|
|
$
|
(1,262)
|
|
|
$
|
(1,096)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Earnings
(Loss) per Diluted Share
Reconciliation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per common
share (GAAP) — diluted
|
|
$
|
(0.23)
|
|
|
$
|
(0.17)
|
|
|
$
|
(0.54)
|
|
|
$
|
(0.43)
|
|
Non-cash
valuation adjustment to contingent
consideration
|
|
|
0.01
|
|
|
|
—
|
|
|
|
0.01
|
|
|
|
—
|
|
Interest
expense
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Stock-based compensation expense
|
|
|
0.09
|
|
|
|
0.16
|
|
|
|
0.19
|
|
|
|
0.33
|
|
Acquisition expense (1)
|
|
|
—
|
|
|
|
—
|
|
|
|
0.02
|
|
|
|
—
|
|
Litigation
expense (2)
|
|
|
0.04
|
|
|
|
0.03
|
|
|
|
0.12
|
|
|
|
0.06
|
|
Depreciation and amortization
|
|
|
0.05
|
|
|
|
0.03
|
|
|
|
0.09
|
|
|
|
0.06
|
|
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 (3)
|
|
$
|
(0.02)
|
|
|
$
|
(0.06)
|
|
|
$
|
(0.11)
|
|
|
$
|
(0.10)
|
|
Diluted weighted
average shares (4)
|
|
|
11,489
|
|
|
|
10,992
|
|
|
|
11,467
|
|
|
|
10,726
|
|
|
|
(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.
|
View original content to download
multimedia:https://www.prnewswire.com/news-releases/audioeye-reports-record-second-quarter-2022-results-301602900.html
SOURCE AudioEye, Inc.