TUCSON, Ariz., May 14, 2020 /PRNewswire/ -- AudioEye,
Inc. (NASDAQ: AEYE), an industry-leading software
solution provider delivering website accessibility compliance to
businesses of all sizes, reported financial results for the first
quarter ended March 31, 2020.
First Quarter 2020 Financial Results and April Update
- Total revenue increased 115% to a record $4.3M from $2M in
the same period a year ago. The increase in revenue was primarily
due to continued growth in the Company's enterprise and vertical
partner channels during the period.
- As of March 31, 2020, monthly
recurring revenue (MRR) was approximately $1.4M, which was an increase of 17% compared to
approximately $1.2M at December 31, 2019.
- Gross profit increased over 170% to $2.9M (~69% of total revenue) from $1.1M (~54% 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.
- Operating expenses increased 45% to $4.6M from $3.2M 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 research and development and general and administrative
expenses.
- Net loss available to common stockholders was $1.7M, or $(0.19)
per share, compared to $2.1M, or
$(0.28) per share, in the same
year-ago period. The improved net loss 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, which was offset by an increase in
total operating expenses.
- At quarter-end, the Company had $1.8M in cash, compared to $2M at December 31,
2019, and no debt.
- Bookings increased 14% to $3.9M
from $3.4M in the same year-ago
period. The increase in bookings was primarily due to consistent
performance in the Company's enterprise channel and execution
against the current sales pipeline as well as improved performance
within the Company's vertical partner channel through deeper
penetration within existing partners.
- Deferred revenue increased 83% to $5.3M from $2.9M in
the first quarter of 2019.
- Contracts in excess of revenue and deferred revenue increased
88% to $17.2M from $9.2M in the same period last year.
- As of March 31, 2020, total
customer count had grown to over 11,000 customers, which was an
over 60% increase compared to the prior quarter and a more than
900% increase compared to the first quarter of 2019.
- As of April 30, 2020, total
customer count had grown to over 16,000 customers, and MRR was
approximately $1.5M.
- The Company is reiterating its expectation to achieve cash flow
positivity in 2021, assuming normal economic conditions.
First Quarter and Recent Operational Highlights
- Appointed Heath Thompson as
Chief Executive Officer, who brings nearly three decades of
leadership and engineering experience from organizations ranging
from start-ups to large global corporations and possesses a deep
background in SaaS and software product businesses.
- Launched machine-learning powered AudioEye Digital Marketplace,
a suite of digital accessibility solutions enabling companies of
all sizes to accelerate accessibility easily and affordably.
- Launched free 90-day trial of the AudioEye Pro solution to
assist companies managing through COVID-19.
- Continued to position AudioEye as the digital accessibility
thought leader, with media coverage in publications targeted to key
audiences, including business owners and website designers: Digital
Trends; Social Selling News; Information Week and Small Biz
Resources.
- Continued to grow Enterprise (direct) sales channel client
roster in the first quarter with prominent new customers from the
consumer goods, construction, major electronics, state government
agencies, financial institutions, and the automotive space among
others.
- Continued to solidify existing vertical (indirect) channel
partner relationships. Currently, 20 active channel partners offer
AudioEye as a preferred digital accessibility solution to their
clients.
Financial Outlook
The Company remains confident in its
long-term growth prospects as well as the opportunities in
the digital accessibility industry as a whole. Both the Board of
Directors and Company management remain focused on growing monthly
recurring revenue (MRR) as its leading financial indicator. Under
normal economic conditions, the Company is reiterating its
expectation to achieve cash flow positivity in 2021. This forecast
remains subject to change and does not factor in a significant,
long-term macroeconomic impact to AudioEye or its customer base as
a result of COVID-19.
Management Commentary
AudioEye Executive Chairman
Carr Bettis said, "We came into the
year with significant sales momentum and increasing channel partner
adoption, which continued to build in the first quarter. At
March 31, we counted over 11,000
customers and, by the end of April, that number had grown to over
16,000 customers, which is an order of magnitude greater than even
just a few quarters ago. We were able to drive our 17th
consecutive quarter of record revenue while expanding our margins
considerably to nearly 70% and incrementally reducing our cash
usage. At March 31, 2020 MRR was
$1.4M and at April 30, 2020 was approximately $1.5M. We are reiterating our expectation that
under normal economic conditions we expect to be cash flow positive
in 2021."
AudioEye Chief Executive Officer Heath
Thomson added "While we are continuing to perform within our
pre-COVID projections, like any business and similar to our
customers, we are not entirely immune to the effects of a global
pandemic or a related macroeconomic slowdown. However, with the
rapid digital transformation taking place across all commercial
activity, the need for accessible solutions has become greater than
ever, and we're looking forward to leading that charge."
Conference Call
AudioEye management will hold a
conference call today, May 14, 2020
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 May 21,
2020.
Toll-free replay number: (844) 512-2921
International replay number: (412) 317-6671
Replay ID: 13701570
About AudioEye
AudioEye is an industry-leading
software solution provider 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, SSA, 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.
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" , "forecast" 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
less mature lines of business, long-term growth prospects,
opportunities in the digital accessibility industry, and our
expectation that we will be cash flow positive by the middle of
2021 and the impact from Covid-19 related macroeconomic impact to
our customers and to AudioEye. 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; 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, 2019 filed with the SEC
on March 30, 2020. 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 in excess of revenue and deferred revenue.
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.
AudioEye's bookings represent 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 deferred revenue. This measure represents the
contractually agreed amount of money that is remaining to be
recognized as revenue under contracts and that will be recognized
in subsequent periods, as company fulfills its service
obligations.
Monthly recurring revenue for a paid customer account is a
contractual determination made by assessing the contractual terms
of each paid customer account, as of the date of determination, as
to the revenue we expect to generate on an average monthly basis
for that paid customer account, assuming no changes to the
subscription and without taking into account any usage above the
subscription base, if any, that may be applicable to such
subscription.
Vertical Partner is a CMS provider or a company which
provides a web-hosting platform for private and public entities and
resells the AudioEye Managed service as an accessibility service
offering to its customers. CMS providers who are focused on a
specific industry vertical are referred to as Vertical Partners by
AudioEye. CMS providers who are vertical agnostic are referred to
as Platform partners by AudioEye.
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
March 31,
|
|
2020
|
|
2019
|
|
(In thousands, except
for per share data)
|
|
|
|
|
Revenue
|
$
4,261
|
|
$
1,986
|
|
|
|
|
Cost of
revenue
|
1,320
|
|
922
|
|
|
|
|
Gross
profit
|
2,941
|
|
1,064
|
|
|
|
|
Operating
expenses:
|
|
|
|
Selling and
marketing
|
1,818
|
|
1,313
|
Research and
development
|
333
|
|
142
|
General and
administrative
|
2,486
|
|
1,749
|
Total operating
expenses
|
4,637
|
|
3,204
|
|
|
|
|
Operating
loss
|
(1,696)
|
|
(2,140)
|
|
|
|
|
Other income
(expense):
|
|
|
|
Change in fair value of
warrant liability
|
28
|
|
-
|
Interest (expense)
income, net
|
4
|
|
(1)
|
Total other (loss)
income
|
32
|
|
(1)
|
|
|
|
|
Net loss
|
(1,664)
|
|
(2,141)
|
|
|
|
|
Dividends on Series A
Convertible preferred stock
|
(13)
|
|
(13)
|
|
|
|
|
Net loss available to
common stockholders
|
$
(1,677)
|
|
$
(2,154)
|
|
|
|
|
Net loss per common
share-basic and diluted
|
$
(0.19)
|
|
$
(0.28)
|
|
|
|
|
Weighted average
common shares outstanding-basic and diluted
|
8,877
|
|
7,611
|
AUDIOEYE,
INC.
|
CONSOLIDATED
BALANCE SHEETS
|
(unaudited)
|
|
March 31,
|
|
December
31,
|
|
2020
|
|
2019
|
|
(In thousands, except
for per share data)
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
1,785
|
|
$
1,972
|
Accounts receivable,
net
|
2,505
|
|
2,958
|
Unbilled
Receivables
|
483
|
|
160
|
Deferred costs, short
term
|
181
|
|
183
|
Debt issuance costs,
net
|
82
|
|
137
|
Prepaid expenses and
other current assets
|
234
|
|
198
|
Total current
assets
|
5,270
|
|
5,608
|
|
|
|
|
Property and
equipment, net
|
138
|
|
156
|
|
|
|
|
Right of use
assets
|
776
|
|
827
|
|
|
|
|
Deferred costs, long
term
|
137
|
|
145
|
Intangible assets,
net
|
1,655
|
|
1,715
|
Goodwill
|
701
|
|
701
|
|
|
|
|
Total
assets
|
$
8,677
|
|
$
9,152
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts payable and
accrued expenses
|
$
2,235
|
|
$
973
|
Finance lease
liabilities
|
53
|
|
52
|
Operating lease
liabilities
|
214
|
|
209
|
Warrant
liability
|
92
|
|
120
|
Deferred
revenue
|
5,143
|
|
5,372
|
Total current
liabilities
|
7,737
|
|
6,726
|
|
|
|
|
Long term
liabilities:
|
|
|
|
Finance lease
liabilities
|
41
|
|
52
|
Operating lease
liabilities
|
600
|
|
655
|
Deferred
revenue
|
141
|
|
153
|
|
|
|
|
Total
liabilities
|
8,519
|
|
7,586
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
Preferred stock,
$0.00001 par value, 10,000 shares authorized
|
|
|
|
Series A Convertible
Preferred stock, $0.00001 par value, 200 shares authorized, 105
shares issued and outstanding as of March 31, 2020 and December 31,
2019
|
1
|
|
1
|
Common stock,
$0.00001 par value, 50,000 shares authorized, 8,877 shares issued
and outstanding as of March 31, 2020 and December 31,
2019
|
1
|
|
1
|
Additional paid-in
capital
|
51,746
|
|
51,490
|
Accumulated
deficit
|
(51,590)
|
|
(49,926)
|
Total stockholders'
equity
|
158
|
|
1,566
|
|
|
|
|
Total liabilities and
stockholders' equity
|
$
8,677
|
|
$
9,152
|
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SOURCE AudioEye, Inc.