TUCSON, Ariz., March
23, 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 fourth
quarter and full year ended December 31,
2019.
Fourth 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 also possesses a
deep background in SaaS and software product businesses.
- Launched its machine-learning powered AudioEye Digital
Marketplace, a suite of digital accessibility solutions enabling
companies of all sizes to accelerate accessibility easily and
affordably.
- Within AudioEye Digital Marketplace, the Company introduced the
AudioEye Free and AudioEye Pro product tiers, as well as rebranded
its Ally Managed Service solution to AudioEye Managed. The trio
collectively encompasses 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, click here.
- Launched Team AudioEye, a new advocacy, certification and
affiliate program for digital professionals to accelerate digital
accessibility by helping developers and web designers create
accessible experiences for the web.
- Announced first-ever natively integrated platform partnership
with Duda, the leading web design platform for companies that offer
web design services to small businesses, enabling more than 500,000
website customers to easily and affordably achieve legal compliance
for digital accessibility.
- 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.
- High-profile, mainstream media outlets continued to look to
AudioEye as a thought leader in the digital accessibility space,
with featured articles in both Forbes (AudioEye Looks Out
for the Disabled in the Digital World) and Fast Company
(Your website needs to be accessible – anything else is just bad
business).
- Recognized as the 83rd fastest growing company in North America on Deloitte's 2019 Technology
Fast 500.
- Continued to grow enterprise (direct) sales channel client
roster in the fourth quarter with prominent new customers from the
government, hospitality, media, retail, and auto space among
others.
- Continued to solidify existing vertical (indirect) channel
partner relationships. Currently, 20 established channel partners
offer AudioEye as a preferred digital accessibility solution to
their clients.
Fourth Quarter 2019 Financial Results
- Bookings increased 90% to $6.6M
from $3.5M in the same year-ago
period. The increase in bookings was primarily due to strength 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 in existing
customers.
- Total revenue increased 100% to a record $3.6M from $1.8M in
the same period a year ago. The increase in revenue was primarily
due to continued growth in the Company's vertical partner channel
and strength in renewals, upsells and bookings in its enterprise
sales business.
- Gross profit increased 127% to $2.4M (~66% of total revenue) from $1M (~58% 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 92% to $3.9M 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 research and development and general and administrative
expenses.
- Net loss available to common stockholders was $1.4M, or $(0.16)
per share, compared to $1.4M, or
$(0.19) per share, in the same
year-ago period. The greater net loss was primarily due to
continued investments to support scalable and profitable long-term
growth.
- At quarter-end, the Company had $2M in cash, compared to $5.7M at December 31,
2018, and no debt.
- Deferred revenue increased 82% to $5.5M from $3M in
the fourth quarter of 2018.
- Contracts in excess of revenue and deferred revenue increased
128% to $17.3M from $7.6M in the same period last year.
- As of December 31, 2019, total
customer count had grown to over 6,800 customers, which was a 95%
increase compared to the prior quarter and a more than 600%
increase compared to the fourth quarter of 2018.
- As of December 31, 2019, monthly
recurring revenue (MRR) was approximately $1.2M, which was an increase of 20% compared to
approximately $997K at September 30, 2019.
Full Year 2019 Financial Results
- Bookings increased 99% to $23M
from $11.5M in the same year-ago
period. The increase in bookings was primarily due to strength 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 in existing
customers.
- Total revenue increased 90% to a record $10.8M from $5.7M
in the same period a year ago. The increase in revenue was
primarily due to continued new business execution in the Company's
enterprise and vertical partner channels, both of which also
generated strong renewals from existing customers during the
period.
- Gross profit increased 110% to $6.4M (~59% of total revenue) from $3M (~54% of total revenue) in the same year-ago
period. The increase in gross profit and gross margin was primarily
due to overall improvement in revenue from new and renewal sales
along with recognition of deferred revenue from prior periods.
Advancements in the Company's technology also led to certain
efficiencies in the delivery of service.
- Total operating expenses increased 87% to $14.2M from $7.6M
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 $7.8M, or $(0.97)
per share, compared to $5.1M, or
$(0.74) per share, in the same
year-ago period. The greater net loss was primarily due to
continued investments to support scalable, long-term growth.
Financial Outlook
AudioEye has historically provided
year-ahead annual bookings and revenue guidance. Going forward, its
focus will be on growing MRR as its updated leading financial
metric. 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 and management remain focused
on driving revenue and bookings growth to support the long-term
health of its business. Going forward, the Company will continue to
re-evaluate the growth and predictability of its operating
performance with respect to providing financial forecasts.
Management Commentary
AudioEye Executive Chairman
Carr Bettis said, "Q4 was a great
finish to what ended up being another year of tremendous growth for
our business. Financially, we achieved our sixteenth consecutive
quarter of record revenue and produced $10.8M for the year, a 90% increase over 2018 and
also another record. During the fourth quarter, we also expanded
our margins to 66% from 58% in Q4 last year, underscoring our
ability to create leverage in our operations as more customers come
online. Going forward, and absent other macroeconomic market
changes, as we continue taking advantage of the automation and
increased efficiencies we've built into our onboarding processes
across our enterprise and vertical partner channels, it is our
current expectation to be cash flow positive in 2021.
"Operationally, we nearly doubled our customer count
sequentially for the second straight quarter to over 6,800
businesses and, as of today, have grown to more than ten times our
size when compared to the end of 2018. We have a massively untapped
market just within our own customer base, and with our recent
launch of the AudioEye Digital Marketplace, coupled with the
initial rollout of our platform partnership strategy, our
accelerated customer growth should continue for the foreseeable
future. Over the past year, we've solidified our senior leadership
team, made tremendous progress within our existing business
channels, dramatically expanded our total addressable market, and
fulfilled our promise to make comprehensive digital accessibility
solutions available for all constituencies. We remain incredibly
confident in our long-term growth prospects as well as the
opportunities in the digital accessibility industry as a
whole."
Conference Call
AudioEye management will hold a
conference call today, March 23, 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 March
30, 2020.
Toll-free replay number: (844) 512-2921
International replay number: (412) 317-6671
Replay ID: 13699208
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" 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. 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, 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 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. 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.
Monthly recurring revenue for a paid customer account is a
legal and 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 in the next
monthly period 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 a new 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)
|
|
|
|
|
Year ended December
31,
|
|
2019
|
2018
|
Revenue
|
$
10,765,153
|
$
5,660,427
|
|
|
|
Cost of
revenue
|
4,383,112
|
2,626,815
|
|
|
|
Gross
profit
|
6,382,041
|
3,033,612
|
|
|
|
Operating
expenses:
|
|
|
Selling and
marketing
|
4,583,796
|
2,462,865
|
Research and
development
|
701,054
|
194,429
|
General and
administrative
|
8,914,988
|
4,950,138
|
Total operating
expenses
|
14,199,838
|
7,607,432
|
|
|
|
Operating
loss
|
(7,817,797)
|
(4,573,820)
|
|
|
|
Other income
(expense):
|
|
|
Other
income
|
12,000
|
-
|
Change in fair value
of warrant liability
|
98,919
|
-
|
Unrealized gain
(loss) on marketable securities
|
(510)
|
(240)
|
Loss on settlement of
debt
|
-
|
(267,812)
|
Interest (expense)
income, net
|
(75,883)
|
(178,002)
|
Total other (loss)
income
|
34,526
|
(446,054)
|
|
|
|
Net loss
|
(7,783,271)
|
(5,019,874)
|
|
|
|
Dividends on Series A
Convertible preferred stock
|
(52,500)
|
(53,740)
|
|
|
|
Net loss available to
common stockholders
|
$
(7,835,771)
|
$
(5,073,614)
|
|
|
|
Net loss per common
share-basic and diluted
|
$
(0.97)
|
$
(0.74)
|
|
|
|
Weighted average
common shares outstanding-basic and diluted
|
8,107,181
|
6,892,238
|
AUDIOEYE,
INC.
|
CONSOLIDATED
BALANCE SHEETS
|
(unaudited)
|
|
December
31,
|
December
31,
|
|
2019
|
2018
|
ASSETS
|
|
|
Current
assets:
|
|
|
Cash & cash
equivalents
|
$
1,972,160
|
$
5,741,549
|
Accounts receivable,
net
|
3,118,319
|
172,384
|
Marketable
securities, held in related party
|
-
|
510
|
Deferred costs, short
term
|
182,664
|
176,006
|
Debt issuance costs,
net
|
137,084
|
-
|
Prepaid expenses and
other current assets
|
198,538
|
49,901
|
Total current
assets
|
5,608,765
|
6,140,350
|
|
|
|
Property and
equipment, net
|
156,171
|
108,007
|
|
|
|
Right of use
assets
|
826,630
|
-
|
|
|
|
Deferred costs, long
term
|
144,932
|
93,790
|
Intangible assets,
net
|
1,715,217
|
2,061,404
|
Goodwill
|
700,528
|
700,528
|
|
|
|
Total
assets
|
$
9,152,243
|
$
9,104,079
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
Current
liabilities:
|
|
|
Accounts payable and
accrued expenses
|
$
972,691
|
$
93,544
|
Related party
payables
|
-
|
14,467
|
Finance lease
liabilities
|
52,449
|
30,172
|
Operating lease
liabilities
|
209,009
|
-
|
Deferred
rent
|
-
|
4,472
|
Warrant
liability
|
120,416
|
-
|
Deferred
revenue
|
5,372,767
|
2,626,712
|
Total current
liabilities
|
6,727,332
|
2,769,367
|
|
|
|
Long term
liabilities:
|
|
|
Finance lease
liabilities
|
51,564
|
51,150
|
Operating lease
liabilities
|
655,431
|
-
|
Deferred
rent
|
-
|
6,585
|
Deferred
revenue
|
153,235
|
402,075
|
|
|
|
Total
liabilities
|
7,587,562
|
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, 105,000 shares issued and
outstanding as of December 31, 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 December 31, 2019 and
December 31, 2018, respectively
|
89
|
76
|
Additional paid-in
capital
|
51,490,963
|
48,017,926
|
Accumulated
deficit
|
(49,926,372)
|
(42,143,101)
|
Total stockholders'
equity
|
1,564,681
|
5,874,902
|
|
|
|
Total liabilities and
stockholders' equity
|
$
9,152,243
|
$
9,104,079
|
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SOURCE AudioEye, Inc.