Twenty-Eighth Consecutive Period of Record
Revenue
TUCSON,
Ariz., March 9, 2023 /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
fourth quarter and full year ended December
31, 2022.
"We are pleased to deliver record revenue with non-GAAP
profitability and an improved GAAP net loss," said AudioEye CEO
David Moradi. "In the fourth
quarter, we delivered 19% revenue growth with an increase in gross
margin while driving down operating expenses by 19%."
Fourth Quarter 2022 Financial Results
- Total revenue increased approximately 19% to a record
$7.74M from $6.5M in the same prior year period. Both the
Partner and Marketplace and the Enterprise channels contributed to
revenue growth.
- Gross profit increased to a record $6.0M, or 77.4% of total revenue, from
$4.8M, or 74.0% of total revenue, in
the prior year period. The increase in gross margin was a function
of continued efficiencies across the board in our organization,
which is impressive given our continued investment in R&D and
customer success.
- Total operating expenses decreased 19% to $7.9M from $9.8M in
the same prior year period. The decrease in operating expenses was
due to efficiencies gained in sales and marketing, partially offset
by costs related to the addition of the Bureau of Internet
Accessibility in March 2022, as well
as lower stock compensation and litigation costs in general
administrative expense.
- Net loss available to common stockholders was $1.9M, or $(0.17)
per share, compared to $5.0M, or
$(0.44) per share, in the same prior
year period. The decrease in net loss was the result of
efficiencies gained in sales and marketing and G&A expenses as
noted above, and revenue growth.
- AudioEye generated Non-GAAP profit in the quarter of
$0.2M, or $0.01 per share, compared to a net loss of
$1.4M, or $(0.12) per share, in the same prior year period.
The non-GAAP earnings and EPS performance reflect adjustments
primarily for non-cash stock-based compensation expense,
depreciation and amortization expense and other non-recurring
items.
- On December 31, 2022, the Company
had $6.9M in cash compared to
$7.8M on September 30, 2022. Cash usage declined to
$0.9M, which included $0.6M of non-recurring items.
- Annual Recurring Revenue (ARR) as of December 31, 2022, increased 13% to $29.2M from $25.8M
as of December 31, 2021.
Full Year 2022 Financial Results
- Revenue increased 22% to a record $29.9M in 2022 from $24.5M in 2021.
- Gross profit increased to $22.7M
(75.9% of total revenue) in 2022 from $18.4M (75.0% of total revenue) in 2021.
- With revenue growing 22% in 2022, total operating expenses for
2022 decreased from $33.9M to
$33.1M. The decrease in total
operating expense was primarily driven by efficiencies in sales and
marketing and reduced stock compensation expenses, offset by costs
from the Bureau of Internet Accessibility and continued investments
in R&D.
- Net loss available to common stockholders was $10.4M, or $(0.91)
per share, compared to $14.2M or
$(1.29) per share in 2021. The
decrease was primarily due to revenue growth and decreased expenses
discussed above.
- Non-GAAP net loss decreased to $900,000 or $(0.08)
per share in 2022, compared to $4.5M
or $(0.41) per share in 2021. The
non-GAAP earnings and EPS reflect adjustments for stock-based
compensation, litigation expense and other non-recurring
items.
Other Updates
- In February 2023, AudioEye
appointed Mikel Chertudi as Chief
Revenue Officer. Mikel is a proven leader in sales and marketing,
and we are excited to have Mikel join us as we prepare for
continued growth and expansion.
- Q4 2022 saw the renegotiation, extension, and addition of
partnership accounts which will contribute to the stability and
growth of revenue into 2023 and beyond.
- As of December 31, 2022, AudioEye
had approximately 86,000 customers, up 5,000 sequentially and 4,000
year-over-year. The customer count increase was driven by both
Enterprise and the Partner and Marketplace channel.
Financial Outlook
We are guiding for
revenue of between $7.7 million and
$7.9 million in the first quarter of
2023, representing year-over-year growth of 13% at the
midpoint.
Conference Call Information
AudioEye
management will hold a conference call today, March 9, 2023, 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, March 9,
2023
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: 10175433
Webcast: Q422 Webcast Link
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 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 Thursday, March 23, 2023 via the following
numbers:
Toll-free replay number: 844-512-2921
International replay number: 412-317-6671
Replay passcode: 10175433
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; and general economic conditions. 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 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.
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 annual recurring fee under each active contract at the
date of determination, plus (ii) for our Partner and Marketplace
channel, the monthly fee for all active customers at the date of
determination, in each case, assuming no changes to the
subscription, multiplied by 12. 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, Website and
Mobile App report services business and other miscellaneous
non-recurring 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 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.
Non-GAAP Earnings (Loss) and Non-GAAP Earnings (Loss) per
Diluted Share
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 executive team
restructuring cost, plus loss on disposal or impairment of
long-lived assets, 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
executive team restructuring cost, plus loss on disposal or
impairment of long-lived assets, 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.
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 elsewhere
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 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.
Investor Contact:
Brian M. Prenoveau, CFA
AEYE@mzgroup.us
(561) 374-0177
AUDIOEYE,
INC.
|
|
STATEMENTS OF
OPERATIONS
|
|
|
|
|
|
Year ended
December 31,
|
|
(in thousands,
except per share data)
|
|
2022
|
|
|
2021
|
|
Revenue
|
|
$
|
29,913
|
|
|
$
|
24,503
|
|
|
|
|
|
|
|
|
|
|
Cost of
revenue
|
|
|
7,219
|
|
|
|
6,121
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
22,694
|
|
|
|
18,382
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Selling and
marketing
|
|
|
13,657
|
|
|
|
14,621
|
|
Research and
development
|
|
|
6,085
|
|
|
|
5,304
|
|
General and
administrative
|
|
|
13,381
|
|
|
|
13,970
|
|
Total operating expenses
|
|
|
33,123
|
|
|
|
33,895
|
|
|
|
|
|
|
|
|
|
|
Operating
loss
|
|
|
(10,429)
|
|
|
|
(15,513)
|
|
|
|
|
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
Gain on loan
forgiveness
|
|
|
—
|
|
|
|
1,316
|
|
Interest expense,
net
|
|
|
(4)
|
|
|
|
(12)
|
|
Total other income (expense)
|
|
|
(4)
|
|
|
|
1,304
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
|
(10,433)
|
|
|
|
(14,209)
|
|
|
|
|
|
|
|
|
|
|
Dividends on Series A
Convertible Preferred Stock
|
|
|
—
|
|
|
|
(69)
|
|
|
|
|
|
|
|
|
|
|
Net loss available to
common stockholders
|
|
$
|
(10,433)
|
|
|
$
|
(14,278)
|
|
|
|
|
|
|
|
|
|
|
Net loss per common
share-basic and diluted
|
|
$
|
(0.91)
|
|
|
$
|
(1.29)
|
|
|
|
|
|
|
|
|
|
|
Weighted average common
shares outstanding-basic and diluted
|
|
|
11,477
|
|
|
|
11,040
|
|
AUDIOEYE,
INC.
|
|
BALANCE
SHEETS
|
|
DECEMBER 31, 2022
AND 2021
|
|
|
|
|
|
December 31,
|
|
|
December 31,
|
|
(in thousands,
except per share data)
|
|
2022
|
|
|
2021
|
|
ASSETS
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
|
Cash
|
|
$
|
6,904
|
|
|
$
|
18,966
|
|
Accounts receivable,
net
|
|
|
5,418
|
|
|
|
5,311
|
|
Deferred costs, short
term
|
|
|
49
|
|
|
|
103
|
|
Prepaid expenses and
other current assets
|
|
|
595
|
|
|
|
451
|
|
Total current assets
|
|
|
12,966
|
|
|
|
24,831
|
|
|
|
|
|
|
|
|
|
|
Property and equipment,
net
|
|
|
161
|
|
|
|
196
|
|
Right of use
assets
|
|
|
1,154
|
|
|
|
834
|
|
Deferred costs, long
term
|
|
|
12
|
|
|
|
34
|
|
Intangible assets,
net
|
|
|
6,041
|
|
|
|
2,622
|
|
Goodwill
|
|
|
4,001
|
|
|
|
701
|
|
Other
|
|
|
93
|
|
|
|
95
|
|
Total assets
|
|
$
|
24,428
|
|
|
$
|
29,313
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
Accounts payable and
accrued expenses
|
|
$
|
2,452
|
|
|
$
|
3,542
|
|
Finance lease
liabilities
|
|
|
38
|
|
|
|
57
|
|
Operating lease
liabilities
|
|
|
468
|
|
|
|
415
|
|
Deferred
revenue
|
|
|
7,125
|
|
|
|
7,068
|
|
Contingent
consideration
|
|
|
979
|
|
|
|
134
|
|
Total current liabilities
|
|
|
11,062
|
|
|
|
11,216
|
|
|
|
|
|
|
|
|
|
|
Long term
liabilities:
|
|
|
|
|
|
|
|
|
Finance lease
liabilities
|
|
|
7
|
|
|
|
45
|
|
Operating lease
liabilities
|
|
|
745
|
|
|
|
450
|
|
Deferred
revenue
|
|
|
73
|
|
|
|
5
|
|
Contingent
consideration, long term
|
|
|
1,952
|
|
|
|
—
|
|
Total liabilities
|
|
|
13,839
|
|
|
|
11,716
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
|
|
|
|
Preferred stock,
$0.00001 par value, 10,000 shares authorized
|
|
|
|
|
|
|
|
|
Common stock, $0.00001
par value, 50,000 shares authorized, 11,551 and 11,435
shares issued and outstanding as of December 31, 2022 and 2021,
respectively
|
|
|
1
|
|
|
|
1
|
|
Additional paid-in
capital
|
|
|
93,070
|
|
|
|
88,889
|
|
Accumulated
deficit
|
|
|
(82,482)
|
|
|
|
(71,293)
|
|
Total stockholders' equity
|
|
|
10,589
|
|
|
|
17,597
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and
stockholders' equity
|
|
$
|
24,428
|
|
|
$
|
29,313
|
|
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)
|
|
2022
|
|
|
2021
|
|
|
2022
|
|
|
2021
|
|
Non-GAAP Earnings
(Loss) Reconciliation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
(GAAP)
|
|
$
|
(1,924)
|
|
|
$
|
(5,003)
|
|
|
$
|
(10,433)
|
|
|
$
|
(14,209)
|
|
Non-cash valuation
adjustment to contingent consideration
|
|
|
164
|
|
|
|
—
|
|
|
|
346
|
|
|
|
—
|
|
Interest expense,
net
|
|
|
—
|
|
|
|
1
|
|
|
|
4
|
|
|
|
12
|
|
Stock-based
compensation expense
|
|
|
1,072
|
|
|
|
2,191
|
|
|
|
4,566
|
|
|
|
7,616
|
|
Acquisition expense
(1)
|
|
|
—
|
|
|
|
—
|
|
|
|
247
|
|
|
|
—
|
|
Litigation expense
(2)
|
|
|
106
|
|
|
|
1,035
|
|
|
|
1,916
|
|
|
|
2,099
|
|
Executive team
restructuring cost (3)
|
|
|
246
|
|
|
|
—
|
|
|
|
246
|
|
|
|
—
|
|
Depreciation and
amortization
|
|
|
504
|
|
|
|
365
|
|
|
|
2,111
|
|
|
|
1,322
|
|
Loss on disposal or
impairment of long-lived assets
|
|
|
1
|
|
|
|
—
|
|
|
|
51
|
|
|
|
22
|
|
Gain on loan
forgiveness
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(1,316)
|
|
Non-GAAP earnings (loss)
|
|
$
|
169
|
|
|
$
|
(1,411)
|
|
|
$
|
(946)
|
|
|
$
|
(4,454)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Earnings
(Loss) per Diluted Share Reconciliation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per common
share (GAAP) — diluted
|
|
$
|
(0.17)
|
|
|
$
|
(0.44)
|
|
|
$
|
(0.91)
|
|
|
$
|
(1.29)
|
|
Non-cash valuation
adjustment to contingent consideration
|
|
|
0.01
|
|
|
|
—
|
|
|
|
0.03
|
|
|
|
—
|
|
Interest expense,
net
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Stock-based
compensation expense
|
|
|
0.09
|
|
|
|
0.19
|
|
|
|
0.40
|
|
|
|
0.69
|
|
Acquisition expense
(1)
|
|
|
—
|
|
|
|
—
|
|
|
|
0.02
|
|
|
|
—
|
|
Litigation expense
(2)
|
|
|
0.01
|
|
|
|
0.09
|
|
|
|
0.17
|
|
|
|
0.19
|
|
Executive team
restructuring cost (3)
|
|
|
0.02
|
|
|
|
—
|
|
|
|
0.02
|
|
|
|
—
|
|
Depreciation and
amortization
|
|
|
0.04
|
|
|
|
0.03
|
|
|
|
0.18
|
|
|
|
0.12
|
|
Loss on disposal or
impairment of long-lived assets
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Gain on loan
forgiveness
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(0.12)
|
|
Non-GAAP earnings
(loss) per diluted share (4)
|
|
$
|
0.01
|
|
|
$
|
(0.12)
|
|
|
$
|
(0.08)
|
|
|
$
|
(0.41)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted
average shares (GAAP)
|
|
|
11,517
|
|
|
|
11,368
|
|
|
|
11,477
|
|
|
|
11,040
|
|
Includable incremental
shares (Non-GAAP) (4)
|
|
|
727
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Adjusted diluted shares
(Non-GAAP) (5)
|
|
|
12,244
|
|
|
|
11,368
|
|
|
|
11,477
|
|
|
|
11,040
|
|
|
(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)
|
Represents severance
expense associated with the restructuring in executive
roles.
|
|
|
(4)
|
Non-GAAP earnings per
adjusted diluted share for our common stock is computed using the
treasury stock method.
|
|
|
(5)
|
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.