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AudioEye Reports Record Third Quarter 2022 Results

Posted November 11, 2022


Posted November 11, 2022

TUCSON, Ariz. — November 10, 2022 — 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 third quarter ended September 30, 2022.

“In the quarter, AudioEye increased revenue 24% year over year while producing non-GAAP profitability and an improved GAAP net loss,” said AudioEye CEO David Moradi. “We were able to drive our operating costs down while substantially increasing revenue despite economic uncertainty and cost pressures faced by many businesses.”


Third Quarter 2022 Financial Results

  • Total revenue increased approximately 24% to a record $7.7M from $6.2M in the same prior year period. Both the Partner and Marketplace and the Enterprise channels contributed to revenue growth.
  • Annual Recurring Revenue (ARR) as of September 30, 2022, increased 19% to $29.3M from $24.6M as of September 30, 2021. 
  • Gross profit increased to a record $5.8M, or 75.0% of total revenue, from $4.6M, or 74.7% of total revenue, in the 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 decreased 13% to $8.1M from $9.3M in the same prior year period. The decrease in operating expenses was due primarily to efficiencies gained in sales and marketing, partially offset by costs related to the addition of the Bureau of Internet Accessibility in March 2022.  
  • Net loss available to common stockholders was $2.3M, or $(0.20) per share, compared to $4.7M, or $(0.41) per share, in the same prior year period. The decrease in net loss was the result of efficiencies gained in sales and marketing and revenue growth.
  • AudioEye generated Non-GAAP profit in the quarter of $0.1M, or $0.01 per share, compared to a net loss of $1.9M, or $(0.17) 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 non-recurring items. 
  • On September 30, 2022, the Company had $7.8M in cash compared to $9.3M on June 30, 2022. The cash change was in line with expectations and included $0.4M for stock repurchase and $0.6M related to non-recurring litigation items.


Other Updates

  •  AudioEye completed the final migrations from our legacy platform in Q3 2022 and retired the previous system. The new platform provides additional features and functionality including issue reporting, free of additional charge.
  • On June 2, 2022, the Company announced a $3 million stock repurchase program. As of September 30, 2022, we have repurchased approximately $756,000 in shares under this program.
  • As of September 30, 2022, AudioEye had approximately 81,000 customers, up 5,000 sequentially and 1,000 year over year. Customer count increase was driven by both Enterprise and the Partner and Marketplace channel.
  • In October 2022, AudioEye and AccessiBe agreed to a global settlement of all pending legal disputes, which includes mutual covenants not to sue, and will move forward with their businesses. We expect our future non-recurring litigation expense to decrease substantially as a result.
  • In October 2022, Senator Tammy Duckworth and Representative John Sarbanes introduced the Websites and Software Applications Accessibility Act in the United States Senate and House of Representatives. The Websites and Software Applications Accessibility Act would require entities currently covered by the ADA, as well as commercial providers, to maintain websites and software applications that are accessible for Americans with disabilities.


Financial Outlook

The Company expects revenue to equal between $7.7 and $7.9 million in the fourth quarter of 2022, representing 20% year-over-year growth at the midpoint. 


Conference Call Information

AudioEye management will hold a conference call today, November 10, 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, November 10, 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: 10172972
Webcast: 3Q22 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, 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 November 24, 2022.


Toll-free replay number: 844-512-2921
International replay number: 412-317-6671
Replay passcode: 10172972


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


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 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 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. 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 and 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- 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 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 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 loss on impairment of long-lived assets, plus loss on disposal 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, as is the case for some of 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. We strongly urge readers to review the 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, which are included in this press release.

(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 treasury stock 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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