TUCSON, Ariz., Nov. 13, 2019 /PRNewswire/ -- AudioEye,
Inc. (NASDAQ: AEYE), a leading developer of digital
accessibility solutions that provide barrier-free website access
for individuals with disabilities, reported financial results for
the third quarter ended September 30,
2019.
Third Quarter and Recent Operational Highlights
- Launched AudioEye Digital Marketplace, a machine learning
powered-platform enabling companies of all sizes to accelerate
accessibility easily and affordably.
- Within AudioEye Digital Marketplace, the Company introduced
AudioEye Free and AudioEye Pro as well as rebranded its Ally
solution to AudioEye Managed, the trio collectively having been
designed to encompass a full suite of digital accessibility
commerce and machine-learning solutions for all price points. For
additional information on how all three product offerings are
differentiated, please click here to learn more.
- Launched Team AudioEye, a new advocacy and certification
program for digital professionals to accelerate digital
accessibility by helping developers and web designers create
accessible experiences for the web.
- Strengthened the Company's leadership and improved shareholder
representation on its Board of Directors through the appointments
of investors David Moradi and
Jamil Tahir to the AudioEye
board.
- Continued to grow direct sales channel client roster in the
third quarter with prominent new customers from the technology,
fashion, retail, and hospitality space among others.
- Continued to fortify new indirect channel partner
relationships. Currently, 20 established channel partners offer
AudioEye as their exclusive digital accessibility solution to their
clients.
- Through its premier partnership with Dealer.com, a Cox
Automotive brand, the Company successfully implemented its solution
across hundreds of Hyundai, Subaru of America and Volvo automotive
dealer websites, rapidly accelerating adoption of its solution
Third Quarter 2019 Financial Results
- Bookings increased 102% to $5.7M
from $2.8M in the same year-ago
period. The increase in bookings was primarily due to strength in
the Company's direct channel and execution against the current
sales pipeline as well as improved performance within the Company's
indirect channel through deeper penetration in existing
customers.
- Total revenue increased 86% to a record $2.8M from $1.5M in
the same period a year ago. The increase in revenue was primarily
due to continued growth in the Company's indirect channel and
strength in renewals and bookings in its direct sales
business.
- Gross profit increased 101% to $1.7M (~60% of total revenue) from $822K (~55% of total revenue) in the same
year-ago period. The increase in gross profit and gross margin was
primarily due to increased efficiencies being realized as the
Company continues to improve and expand the level of automation in
its remediations as well as an increase in revenues.
- Total operating expenses increased 80% to $3.8M from $2.1M in
the same year-ago period. The increase in total operating expenses
was primarily due to increases in sales and marketing expenses as
well as general and administrative expenses.
- Net loss available to common stockholders was $2.2M, or $(0.27)
per share, compared to $1.3M, or
$(0.19) per share, in the same
year-ago period. The greater net loss was primarily due to
continued investments to support scalable, long-term growth.
- At quarter-end, the Company had $3.5M in cash, compared to $5.7M at December 31,
2018, and no debt.
- Deferred revenue increased 73% to $4.3M from $2.5M in
the third quarter of 2018.
- Contracts in excess of revenue and deferred revenue increased
140% to $15.5M from $6.5M in the same period last year.
- As of September 30, 2019, total
customer count had grown to over 3,500 customers, which was a 150%
increase compared to the prior quarter and a 322% increase compared
to the third quarter of 2018. Current customer account is
~4,300.
- As of September 30, 2019, monthly
recurring revenue (MRR) totaled $997K
which was an increase of 29% compared to $774K at June 30,
2019.
Full Year 2019 Financial Outlook
The Company is
reiterating its full year bookings guidance of $22M to $24M and
revenue guidance of $10M and
$11M.
Management Commentary
AudioEye Executive Chairman
Carr Bettis said, "In the third
quarter we built on our success from the first half of the year and
generated improved results in a number of our key operating areas.
More specifically, we recorded $2.8M
in revenues in Q3, an 86% increase over the prior year and also a
record for the fifteenth consecutive quarter. Our strong topline
led to our MRR increasing nearly 30% sequentially to almost
$1 million at quarter-end, also
helping to provide incrementally improved visibility into our
financial projections as we look to scale our business over the
long-term. Additionally, quarterly bookings came in strong at
$5.7M and bookings in excess of
excess of revenue and deferred revenue increased again to
$15.5M . Operationally, we
effectively doubled our customer count during the quarter, a feat
which validates our ability to support large-scale rollouts, both
technically and financially, and also justifies our decision to
continue allocating resources to provide the necessary
infrastructure in support of not only indirect vertical CMS
providers but the AudioEye Digital Marketplace.
"After the quarter end, we also announced the launch of AudioEye
Digital Marketplace, our new machine learning powered-platform
designed to enable companies of all sizes to accelerate
accessibility both easily and affordably. With this transformative
new offering, AudioEye now provides its managed service solutions
designed specifically to accelerate the path to compliance for
website publishers relying on some of the world's largest and most
ubiquitous CMS platforms such as Wix, Weebly, Shopify, Squarespace
and WordPress. Our expectation is that this channel will translate
into impactful growth, in addition to our existing business,
beginning in the new year. In the near term, we are increasingly
confident in the performance and prospects for our business and are
reiterating both our revenue and bookings guidance for 2019."
Conference Call
AudioEye management will hold a
conference call today, November 13,
2019 at 4:30 p.m. Eastern time
(1:30 p.m. Pacific time) to discuss
these results.
AudioEye management will host the call, followed by a question
and answer period.
U.S. dial-in number: (877) 407-9208
International number: (201) 493-6784
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 (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 on the same day through November
20, 2019.
Toll-free replay number: (844) 512-2921
International replay number: (412) 317-6671
Replay ID: 13695766
About AudioEye, Inc.
AudioEye is an
industry-leading software solution delivering immediate ADA and
WCAG accessibility compliance at scale. Through patented
technology, subject matter expertise and proprietary processes,
AudioEye is eradicating all barriers to digital accessibility,
helping creators get accessible and supporting them with ongoing
advisory and automated upkeep.
Trusted by the FCC, ADP, Samsung, Uber and more, AudioEye helps
everyone identify and resolve issues of accessibility and enhance
user experiences, automating digital accessibility for the widest
audiences. AudioEye stands out among its competitors because it
delivers machine learning/AI-driven accessibility without
fundamental changes to site architecture.
Join our movement at www.audioeye.com.
To learn more about AudioEye, please view the About AudioEye
video.
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", "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 full-year bookings and revenue
guidance, scaling AudioEye's business over the long term and
an expectation of impactful growth beginning in 2020. 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 product development
and technological changes; the acceptance of AudioEye's products in
the marketplace by existing and potential future customers;
competition; and general economic conditions. 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, 2018 filed with the SEC on
March 27, 2019. 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.
About Key Operating Metrics
To supplement
our financial information presented in accordance with generally
accepted accounting principles in the
United States (GAAP), we consider certain operating measures
that are not GAAP measures, including monthly recurring revenue,
bookings and contracts. AudioEye reviews a number of operating
metrics such as these to evaluate its business, measure
performance, identify trends, formulate business plans, and make
strategic decisions.
We believe these metrics and measures are useful to
facilitate period-to-period comparisons of our business and to
facilitate comparisons of our performance to that of other similar
companies. In this press release, we are reporting results and/or
affirming our previously announced guidance on bookings, revenue
and monthly recurring revenue.
AudioEye's bookings represents the contracted amount of money
the customer commits to spend with the Company over an agreed
amount of time, generally ranging from 12 months up to 60
months.
AudioEye's contracts in excess of revenue and deferred
revenue is the remaining bookings that have not yet been recognized
as revenue or billed to the customer. This measure represents the
contractually agreed amount of money that is remaining to be billed
and paid under contracts and that will be recognized in subsequent
periods.
AudioEye's monthly recurring revenue is the Company's
annualized spend of a customer divided by 12.
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
-Financial Tables to Follow-
AUDIOEYE,
INC.
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
(unaudited)
|
|
|
|
|
|
|
Three months ended
September 30,
|
Nine months ended
September 30,
|
|
2019
|
2018
|
2019
|
2018
|
Revenues
|
$
2,776,436
|
$
1,494,313
|
$
7,197,736
|
$
3,878,552
|
|
|
|
|
|
Cost of
revenue
|
1,121,307
|
672,589
|
3,171,715
|
1,882,698
|
|
|
|
|
|
Gross
profit
|
1,655,129
|
821,724
|
4,026,021
|
1,995,854
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
Selling and
marketing
|
1,424,210
|
625,789
|
3,389,912
|
1,813,345
|
Research and
development
|
139,570
|
48,860
|
501,400
|
147,889
|
General and
administrative
|
2,249,302
|
1,445,539
|
6,452,315
|
3,592,004
|
Total operating
expenses
|
3,813,082
|
2,120,188
|
10,343,627
|
5,553,238
|
|
|
|
|
|
Operating
loss
|
(2,157,953)
|
(1,298,464)
|
(6,317,606)
|
(3,557,384)
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
Unrealized (loss)
gain on marketable securities
|
456
|
(1,680)
|
252
|
(30)
|
Interest (expense)
income, net
|
(37,746)
|
(32,892)
|
(39,323)
|
(32,760)
|
Total other (loss)
income
|
(37,290)
|
(34,572)
|
(39,071)
|
(32,790)
|
|
|
|
|
|
Net loss
|
(2,195,243)
|
(1,333,036)
|
(6,356,677)
|
(3,590,174)
|
|
|
|
|
|
Dividends on Series A
Convertible preferred stock
|
(13,233)
|
(13,233)
|
(39,267)
|
(40,507)
|
|
|
|
|
|
Net loss available to
common stockholders
|
$
(2,208,476)
|
$
(1,346,269)
|
$
(6,395,944)
|
$
(3,630,681)
|
|
|
|
|
|
Net loss per common
share-basic and diluted
|
$
(0.27)
|
$
(0.19)
|
$
(0.81)
|
$
(0.54)
|
|
|
|
|
|
Weighted average
common shares outstanding-basic and diluted
|
8,279,207
|
7,084,716
|
7,847,905
|
6,676,968
|
AUDIOEYE,
INC.
|
CONSOLIDATED
BALANCE SHEETS
|
(unaudited)
|
|
September
30,
|
December
31,
|
|
2019
|
2018
|
ASSETS
|
|
|
Current
assets:
|
|
|
Cash
|
$
3,463,899
|
$
5,741,549
|
Accounts receivable,
net
|
1,362,400
|
172,384
|
Marketable
securities, held in related party
|
762
|
510
|
Deferred costs, short
term
|
197,961
|
176,006
|
Prepaid expenses and
other current assets
|
366,370
|
49,901
|
Total current
assets
|
5,391,392
|
6,140,350
|
|
|
|
Property and
equipment, net
|
167,805
|
108,007
|
|
|
|
Right of use
assets
|
877,067
|
-
|
|
|
|
Deferred costs, long
term
|
156,786
|
93,790
|
Intangible assets,
net
|
1,711,650
|
2,061,404
|
Goodwill
|
700,528
|
700,528
|
|
|
|
Total
assets
|
$
9,005,228
|
$
9,104,079
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
Current
liabilities:
|
|
|
Accounts payable and
accrued expenses
|
$
670,129
|
$
93,544
|
Related party
payables
|
4,541
|
14,467
|
Finance lease
liabilities
|
51,735
|
30,172
|
Operating lease
liabilities
|
204,411
|
-
|
Deferred
rent
|
-
|
4,472
|
Deferred
revenue
|
4,119,567
|
2,626,712
|
Total current
liabilities
|
5,050,383
|
2,769,367
|
|
|
|
Long term
liabilities:
|
|
|
Finance lease
liabilities
|
61,886
|
51,150
|
Operating lease
liabilities
|
709,268
|
-
|
Deferred
rent
|
-
|
6,585
|
Deferred
revenue
|
192,121
|
402,075
|
|
|
|
Total
liabilities
|
6,013,658
|
3,229,177
|
|
|
|
Stockholders'
equity:
|
|
|
Preferred stock,
$0.00001 par value, 10,000,000 shares authorized
|
|
|
Series A Convertible
Preferred stock, $0.00001 par value, 200,000 shares designated,
105,000 shares issued and outstanding as of September 30, 2019 and
December 31, 2018
|
1
|
1
|
Common stock,
$0.00001 par value, 50,000,000 shares authorized, 8,876,555 and
7,579,995 shares issued and outstanding as of September 30, 2019
and December 31, 2018, respectively
|
89
|
76
|
Additional paid-in
capital
|
51,491,258
|
48,017,926
|
Accumulated
deficit
|
(48,499,778)
|
(42,143,101)
|
Total stockholders'
equity
|
2,991,570
|
5,874,902
|
|
|
|
Total liabilities and
stockholders' equity
|
$
9,005,228
|
$
9,104,079
|
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SOURCE AudioEye, Inc.