AEYE - Earnings call transcript Q4 2019

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Operator

Good afternoon, and welcome to AudioEye's Fourth Quarter and Full-Year 2019 Earnings Call.

Joining us for today's call are AudioEye's Executive Chairman, Dr. Carr Bettis; and CFO, Mr. Sach Barot.

Following their remarks, we will open up the call for questions from the company’s publishing analysts.

Relations remind be this via made available the to recorded will a like company's in will the and available Investor would everyone www.audioeye.com. call that be link website I at of section for replay

forward-looking call participants are considered Before all of Executive Chairman, to statements this the not course made are by statements. conference to the I over be AudioEye's that would historical company facts to turn like during call the that remind AudioEye’s management

Securities The anticipate, Private statements forward-looking risks assumptions and and based provides other statements. Act Safe Harbor XXXX subject about and are and The uncertainties. that projections, forward-looking similar statements Litigation are of on words These future Reform current for other predictions, that to statements of identify expectations such estimate, statements. expectation expect, are believe, will events

filings differ company's and to discussed with comments the as results on AudioEye undue or of correct not and the forward-looking statements. on XX-Q believes these place management’s the which undertake of statements reflect made reliance duty Actual the reports on report and its on are our cautioned date this Form quarterly today's Commission. and to Risk conference update this during only Participants call Securities hereof. any not because materially does Exchange any forward-looking call in Form XX-K, annual press section release and could factors report Factors in

Carr to Please like call Now, I’d Chairman, to turn the Bettis. Executive over proceed. AudioEye's Dr.

Carr Bettis

fourth the ended release of XXXX. announcing our of press today audioeye.com. is copy thank quarter Thank website the at you, release section issued joining we the available Welcome, a you us for for year A press in our December full and Earlier Investors And everyone. XX, operator. results today.

like our I'd a new Heath AudioEye's CEO, today's and take team. Thompson I begin to moment welcome call, to Before

Heath's We're someone excited we month, CEO to role announced today. the of Heath caliber join us. this over coming effective really As earlier to have took

SANS, As organizations natural of and nearly Heath of has company. makes global three for experience business engineering Vice similar software at leading to and from strategy. of where cybersecurity fit a General was SaaS ranging he he recently to background Heath was Manager at data management-level also businesses development Security most held background, and a leader the cybersecurity recently, product of large President security, business. the decades AudioEye, bit most products, to he in a where Forcepoint, in positions with deep development, He him user has and including Awareness security, corporate variety Senior another organization our startups a leadership and roles, Prior was SANS corporations. enterprise

acquisition period. Systems AI, Security an various successful the analytics RedOwl, also organizations Internet ML, behavior the a Forcepoint, a Corp of executed Systems, with the in roles Heath products, one for drove flagship year-over-year and revenue insider At share mid and business' Heath data the of doubled market during large of growth has other IBM, American business; competitors Attachmate. displacing held significantly shift; and threat including company same double-digit also

technology company revenue in Finally, $XX Heath three and services it an which also within growing Corporation, years. founded and million XXX previously information bootstrapped, ran employees to Thoughtmill and he

Science Information Emory from from in and Science MS has Heath University. an in Computer Mathematics BA Computer and and Georgia a Tech,

to scale. formats. would management We knew accessibility with that in grow to we strategy, in us packet but proven to identified background, the began new we and need market a would product someone help experience continue characteristics our we When a executive our as organizations well digital process, need also to current succeed in leader opportunities as key effectively driving we CEO search at

we believe is technology on We're leading Heath plans. just to to that from This businesses. heard who long-term for found first AudioEye’s excited the a possesses has and execute leader a decorated him in you past here. Heath's specifically day. growth me, we’re We As skills SaaS looking have

So get to looking him on calls. introducing having forward before give if conference to more more call, sooner. Heath to up going a not next these lead time bit speed to we're formally I'm him quarterly our

for updates results begin various do from it I'll as over a channels. I'll discuss once to now major Then sales highlights of our into who I'll with CFO, we discuss time. an finish the takes our of financial before overview getting This there, will some But little our period. us within always the operational our business. our Sach, turn quarter we

some back our to on Finally, Q&A. before I'll the closing discuss line provide come remarks outlook and

a first background. of So, bit

of For those months we and are we to information how I'm want our today going of past we've a last to had of lot going the the of you bit you where give redundant. proper today. got on make changes few a understanding call, some a everyone to we But in has that sure is listened to

go. So here we

AudioEye of is SaaS content solutions. digital a accessibility based provider leading

continuously eradicate the Our issues We AudioEye pride largest ourselves to to do more also accessibility we that globe. them. addressing of just mission At holds the strive in many identify We impact than to digital accessibility. maintain all monitor issues. range fix, barriers people and around

the gain compliance are or the and remediation quickly of Accessibility X.X. with accessibility We regulations the with more Act we also and our demonstrate WCAG compliance ADA, automated, Guidelines Americans many laws. with Disabilities Because certify standards, customers Content latest websites capabilities Web to or both provide

these product, testing and coupled For managed manual our remediation with experts. matter processes are subject by automated

make keep their our digital monitoring and content through private of clients, best conformity accessible to disabilities. with continuous The trusted result and gain more their this accessible. investment remediation, sector enormous provide product is a that and we their Further, and give also clients opportunity of with from population the for with a ROI certification an standards. them we We individuals to we an commitment provide websites more content to our with solution

at greatly meet our all we platform November core affordably On to to sizes officially their legal a ability that accessibility. eradicating enhances of and AudioEye protection. to companies a made ago, learning digital the mission that said, accelerate months and designed we All just machine accessibility barriers all announcement we its launched our easily path of to few to an Digital powered is Xth, Marketplace, which enable believe

for Solution the all why potential we're so price points is can what the business main about achieve. excited our reason of now

model a at and that scale. of of If you the our was XXXX. you've run the cost for AudioEye mostly know At then been story operating time, just because SaaS our a lack targeted following solution market, has enterprise since while,

of increasing the we expertise level and remediation also fixes, amassed additional of way. library matter provide subject millions of in our Over the automation past the few years, service we have up along a building

small solutions the customers hosting prior local approach, providers. a we indirect banks. we accessibility focused or working digital other this to closely sized and our for we partner a are for able businesses on calls. Eventually, new our on example, bring in the for wider vertical automotive website These medium SMB discussed CMS market, creation lot management commonly generally referred calling which Through to of were to small we've with led began to one channel This offer go-to-market or content regional providers mostly what and industry systems XXXX as CMS to credit channel digital services SMBs. union vertical, or introduced or we vertical or

at their done we these use of In number providers for of get terms CMS this a of most website how profitably scale, small vertical templates clients.

potential where our tens up partners, vertical of also to are barriers the As the the continue accessibility all to mission for to as are of digital to make accessible at call, of thousands AudioEye a to Digital We'll This want is our issues digital widest platform hundreds We the to world to targeting couple and of digital of people customers, of eradicate I we will Marketplace to the times, as AudioEye’s continue us. makes there solution used top eradicating can use SMBs. tangible the large still where mentioned We're of millions websites. we repeated and I've thousands accessibility. there target number enterprises possible. be sign

Within have suite offerings. Marketplace, products differentiated we of a now the AudioEye Digital full with

Going machine product our including of experience. forward, marketing customer and in to initiatives, key areas we refinements, experience, continued number user invest a continue design learning, to support

processes over time. platform Additionally, we'll sure have right and we people the support the make to infrastructure further on invest and to continue to scalability maximize and growth

Our are for continuing current plans plan to hyper-growth.

we in confident our and customers. So are ability retain to gain

deal for down important, to those everyone we dominant or more That to said, the With and as the Like access said, accessible be current to let's everyone, down. solution of to with that business impact to that it usable. shut that we well. environment our full choice become e-commerce in their slow hard digital could make more may determined and are also more It of is believe content impact current seeking content predict as businesses for the COVID-XX become reality.

We're announce offer customers this longer We days. benefit pleased growth and through this free partners over encourage a Pro that we adoption morning of campaign to for AudioEye's our term. AudioEye XX launched selected new via and AudioEye, business the believe to Marketplace and clients to for will their our clients

protect of a to from taking our policy. virus, In In interest to employees, adopted safety the we as will key had we this and already many we manage productivity. continue stakeholders. work to we're ourselves addition, quickly of business, hopefully follow in a home best offered steps Prior improve remote even short, worker terms for our we infrastructure and and to policies in from In [indiscernible] work employees. place, and will home of practices

regulatory going Given channels, well available how CDC, are latest other the to Health situation including and World the authorities. situation evolving, updates monitor as all reports news from the the Organization rapidly we closely as is the through information

I business overview update. that move our With on to completed, get to

measure also year. continue quarter retain in we little representing last revenue had pretty profits expanded very revenue XX% in quarter. significantly seen grew excess growth continues the the to fourth XXX% deferred to the and increased rise of it's is continues to of revenue release, the to MRR fourth XXX% later. $XX.X for year. had and customers grow more have revenue of record clear XXth over We strong But going a we percentile. or quarter. and contracts by revenue period our Monthly recurring if Deferred get Sach Gross and quarter-over-quarter. XXs our million last revenue Bookings into press details you've to same a non-GAAP

also doubled quarter, sequentially We with than customer second year finishing the X,XXX the our count more straight customers. nearly for

we combined as respective massively sales channels. not market Marketplace both teams call, to our customer AudioEye untapped today's of a As speaks base, count as well customers we’ve customers, their over our within own which now XX,XXX including within execution just our

year-over-year was basis, at grown a customer end has XXXX. current On it count what times the XX of nearly

our enhance partnerships, platform expect Marketplace, respect with this and refine we approach precipitously. As to to to our we Digital continue number partnerships, grow and vertical

With that to new our I'll to targeted Beginning continue verticals of high these enterprise, to space brand accessibility specific numbers. direct sizeable platform. Many channel, we including number level our on those as the the channel referred move we overview welcomed consistent media completed, and retail, to wins our drive a in and growth the automotive of from with commonly hospitality, names came AudioEye government, updates.

few renewals, pleased of and accurate. both whom As mentioned book already also expectations AudioEye for extended customers. our especially items last both our re-signed board, have most successfully our with drove significant a quarter been I'm strong the business, of significant growth names that the few see calls, our fourth base, I will we and some report of strong We were contracts in enterprise been expectation for new customer for across was years. in the seasonally that from to on but we

providing industry comprehensive marketplace digital relationships. whippy seen and becomes today. to we're focused accessibility itself of offering the validated. way, more on fact entering the customers accessibility remain even more further expand scope most we're the We of marketplace in the digital is As keep competitors Put that another the becoming the crowded, we’ve proud continuing as our the space,

there. any to other remain that Our above that's is and out will as tide solution we head continues belief rise, shoulders

continues As we’re the space. also because size, market relative we for of matter of being to and a sizing the what’s business are us. focus, grow news, But good into the at kiosk where PDF

channel, to as vertical our known Moving partner previously channel. indirect the or

forward strong of are to we're the relationships. building rates and that drive we're contribution showing automotive continue in we diversify seeing over to sectors initial even increased vertical quarter, every but are Traditionally, last within expect the quarter, additional mix During those partner and success’ one and still partners, to adoption each in our just to penetration time. verticals starting the our and of The banking some from leading traction, looking point. announced newer increased charge, continued their

remained TAM quarter, partner first while And partners. vertical partner evaluating foremost our we count of new the we're During potential within focused our to on XX. the is what quality at remain expand and partnerships always subset,

vertical with Our provider. ability choose and accessibility commitment relationship AudioEye within as our to from partner our partners penetration continue space we strong speaks existing to work driving increased receive who affirms to digital their the

announced We AudioEye be ever into Duda. have would that entering first partnership its with previously platform

web For we one This those unfamiliar, five support. now businesses. a tools, web digital only Duda services platforms new and new channel, continue for to is leading to into site newly of refine and one who that launched the enhancing and who small with the integrated design you AudioEye is offer accessibility AppStore. and Duda are partnership of upside, solution will one design huge is companies of the

have vision for program. and as announced developers initiative as the comprehensive even affiliate through Team for our community looking designers new AudioEye, accessibility program we're accelerate Through accessible further web for create by a helping is to previously certification web digital a experiences AudioEye, to also professionals. Team well digital and of a broader which We advocates, for our

We of program. also affiliates already in have a our number

Digital Finally, a our Marketplace. on brief update

we channel. of I digital self installation. believe mentioned remain massive self-served this on on Marketplace, diligently perfectly easy last the truly bullish we can and our is growing market. itself to that we lends with this product purchase the call, As long-term product for presented launch the this working opportunity incredibly I It's on here, early say and self is a for pretty that what now, still are within But Digital

turn ahead guidance. We've Sach revenue year to over guidance. our and respect to annual give provided I update numbers, with before provide it like Now, detail more an to on to historically bookings I'd

to on $X XX% focus forward, growing that MRR in report XX, XXXX, our crossed December quarter, Going fourth will up pleased recurring we as million or revenue $X.X the monthly milestone and be the was MRR. I'm million of sequentially.

a is of We its This strategy update beyond is expect segments. the company's healthy fact that at throughout go-to-market MMR rate reflective to our grow expanding XXXX. very historical

profiles These platform two businesses, It's our lines increasing expectation partnership plus will such as bookings our that next of years revenue an and over coming the growth of amount newer of our to be and both impact from terms bookings affiliates. with and the well time Digital revenue. others and as Duda, as the revenue, from Marketplace even segments different deferred have in on our

whole. typical well cases, digital We a be in business, growth contrast of as the remain industry opportunities example, in is new in as our revenue occur partner, For to this there confident concurrently. and enterprise point. want deferred long-term clear bookings revenue, some and in prospects in or I to no the as our lines the the vertical incredibly business, on accessibility

the the saw, to positive press I'm it’s pleased that noticed you expect We report growing for And continue and in first if to expectation XXXX. release, our publicly time as flow in to both be have cash additionally, beyond. substantially may in XXXX you

wide from this COVID-XX with course, play, the pandemic macroeconomic factors Of could including market various other change. forecast at impacts, slowdowns related the and potential

However, current the feel we in confident the circumstances, prediction. in

the With quarter. so over rest for of could results to that the Sach, us Sach? review he walk call our going financial completed, our to I'm through the turn CFO,

Sach Barot

Thank you, Carr.

like our begin, Before new warm extend CEO I'd to I a also Thompson. to Heath welcome

industry. the relevant as all and in are expand digital We leadership we forward to experience looking from benefiting much very our his accessibility position knowledge

with Let QX year me and bookings. jump into our starting full now right results,

years. over amount as us which to we a the As a reminder, with multiple bookings customer commits be contracted could spend define

For increase year. in totaled the was $X.X million of $X.X which quarter XX% an the same from period million, last bookings

result in For an against as in the full driven execution strength of pipeline. a of $XX channels partner by increase enterprise The was vertical primarily year, XX%, bookings our totaled in million compared strong which million, $XX.X bookings increase and our to was sales XXXX. both

reflecting our over channel enterprise well with revenue penetration the year. was driven in acquisition $X.X QX in from partner was million, better vertical increase as period $X.X increase new in retention customer solid XXX% and last million as by our Revenue same The channel.

years. a primarily full in The to growing our was from year increased year $XX.X XX% million for MRR the Revenue XXXX. increase full of both vertical million from in due revenue record and benefit through expanding the from revenue $X.X and to prior in new bookings partnerships, coming deferred

revenue, more as last was grow for improvement top-line. XX% was of total was quarter. million or automate Gross of of we the XXX% profit from that by efficiencies particular $X.X also This deliver reflects we increase the This products remediations, revenue quarter $X fourth a or enhanced year. our driven we during mix million which as XX%

was total For or the of XXX% profit or million year, total revenue $X increased revenue, XXXX. million, which full to $X.X gross of XX% XX% in

you midst and best shared with these we're business believe a that in shareholders. we areas growth investments profitability. As strongly long-term long-term of several will in our We drive prior key to investing during for the calls, and return provide

XXXX. well was both expenses. due year-over-year and operating of increases to million, total $X.X was $X.X to QX as was The and In from Moving expenses in an of $X.X our G&A million OpEx from in million operating which sales an in increase XX% costs. QX, increase in X% as marketing increase

marketing in chain. to Sales and AI, marketing lead enhance infrastructure increases expansion million primarily variable reflects personnel, it XX% further driven increase the due operating The year, For teams experience in was key million sales by and improvements. additional digital drive increases learning operating year. in costs, development, of to machine from to in costs full total investments $X.X some product increased total $XX.X investments expenses last were expenses marketing, also increased and and better our

costs by costs, building legal were G&A infrastructure, and personnel the expenses. driven front, On consulting for increases

Turning of this or the per common to of fourth of loss Net last share, the of per net to million quarter bottom-line. year. loss $X.XX XXXX $X.X loss compares or loss towards $X.X for share a $X.XX available million stockholders a totaled a

to The top-line was in For the loss due give will $X.X loss stockholders per net future. common compared loss $X.XX full available that $X.X the of of or to was investments to year, loss primarily XXXX. net share, share expect $X.XX in million or per we returns greater million,

metrics. to some Now additional non-GAAP

of recognized revenue. excess to in Moving revenue and deferred contract

is metric the billed have we revenue this know, revenue. that you mostly last recognize as periods. measure in as upon XXX% bookings In As recognized $X.X remaining recognized and amount or to year. contractually is booked expect that deferred revenue to future contracts This yet that in been the increased period of deferred and not the amount excess in remaining represents from to revenue $XX.X million QX, of same million agreed

$X.X Moving year-over-year of million, to monthly totaled MRR of was the XX%, QX basis. or recurring very increase a healthy fourth which MRR. approximately $XXX,XXX compared revenue at the end an a At to end quarter, of on increase and

first balance items, revenue. deferred beginning with sheet Some

for not invoice As for we non-cancelable have not in contracts, yet amounts a yet revenue. received reminder, any or deferred where provided, funds revenue, services earned are

In in the revenue the bookings. This and sequentially strength $X reflects from XX% our XX% last million in or million million $X.X fourth was quarter, continued from QX $X.X deferred up up year.

of Our $X.X the accounts at QX million year. the $X.X million, was of receivable end balance at compared QX end this to

our overall the sales mix the we're experiencing. was within increase by that and driven quarter-over-quarter growth This growth

and our contracts. partnerships, rates we due additional jumps platform these with vertical nature anticipate penetration As month-to-month to of the in some we AR of increase

as of contributed AR contract with and our channel, enterprise non-cancelable from our to case their that as Additionally, timing the The impacts the shift and contracts was growing timing balance, of are our AR in are collections. date one high well. of customers that overall invoice invoicing

ended accounts We cash payable which was XX% lower, sequentially is Our about the with $X balance year $XXX,XXX about and over in cash QX. million equivalents.

updates call capital the respect turning to needs. few I now provide will with to Carr, over our back Before a

line credit. we of quarter, the our during on $X First, not million did draw existing

As year. a line credit to we of reminder, of this that had August access through

our shelf statement with a we Form registration to intend S-X upcoming on XX-K SEC around file filing. Additionally, the

an practice do corporate the it shelf. is us We shelf [onside] feel in future. effective accordance good to this provide At plans with that time, should flexibility, having not we we out in and need draw have will raising with any upon financial capital

exchange the However, have flexibility additional we for should we make registered sure choose capital to the Board to want with deploy to growth, access in the shelf. capital

from with business. Under a our our current funds, marginal have comfortable which not we to as safety do adequate and line well we general we the by our as include expectations, any plan slowdown, economic provided available growth impacts and capital our potential are believe of credit run unforeseen

earlier continued It’s we worth on forward positive to top-line repeating become cash from flow leverage another XXXX. that we commentary to expect basis. way, Put Carr’s a generate go in expect

to cash rate on will over unforeseen we if access substantially few quarters. need decrease to few continue our will have it. whole, burn In capital, the next to subject the quarters While timing, burn expect future, to next we fluctuate believe we the we over

While remain we we on everything evaluate of share mass gain that to now continue have use the we entered. market we opportunistically doing opportunities the within capital, best market can focused to

market in growth personnel announcements, to PR relates funds marketing AI, infrastructure our key to the spend Technology strategic will and drive it plan product that onboarding ongoing share, help key us areas: the gain development, to and improvements. critical we plans machine increased and in in continuous areas learning, allocate As areas, additional following efforts,

key expect also areas. that and delivery we technology marginal only customers, several continue believe cost as over further of end the users will to make our that well it lower Over months, benefit time, as not our next IP portfolio we will our to strengthen enhancements in but

I over to remarks. Carr. call prepared turn Carr? will now back my the completes This

Carr Bettis

this Q&A. your I'll thanks to you few final over patience through on for And items allow everyone Hey. to to turning it a exciting. Thanks, now get update Sach. before it's update, us been

and to strategic halfway roadmap through quarter execute MRR. than XXXX. And on the today, ongoing As we more continue of first we're our of

vertical our continues at increase to to of stalwart program addressable revenue count Our solution. channel and drive enterprise we Through expect new affiliate another our our marketing our platform contributor our to expand market. customer a AudioEye a rate, overall avenue provides Digital growth, the adoption and Marketplace, partnership increasing remains to partner healthy total channel

the digital to to Looking to accessibility solutions. remains website major in increased saw AudioEye's XXXX, outwardly, provide of legal decision behind on tracking, Based a in force to accessible aimed XXX landscape to commercial the XXXX. the driving X,XXX X,XXX so of XXXX were Of from far number first which we lawsuits that month organizations. I the looking the want note in two March. if litigation at February also of in X,XXX January anything has and up picked over weeks at March,

appeal the Supreme morally. Pizza's Court's shift believe we inclusion it’s is the do and see tide right we of to no Longer-term, earlier the Additionally, Domino’s legal and financially thing to to the action refusal year, continuing continue to in signs what both with to is slowing. hear accommodation, proactive just

accessibility. solutions the potential the also largest even the of the pandemic comprehensive we COVID-XX on of most remain In for regardless has digital providing digital impairment number accessible disability. or believe accentuate users, for We the of meantime, to need the set focused

over appropriate instructions. the With turn that, for please questions. Operator, the provide I'll call

Operator

Thank you.

[Operator We will from take analysts. the instructions]. publishing questions now company's

Riley proceed. first Zach Our Cummins question Please from B. FBR. with is

Zach Cummins

congrats and questions a taking Thanks for my really QX. strong on

within driving penetration performance? banking else the out sounds results, you and seeing? continue It in you the some can like starting of strong the terms get sectors, drove automotive Just that to indirect I strength you off, the speak mean within of adoption in areas call that can and you're strong that terms channel. anything But QX to that

Carr Bettis

question. and the was the -- indirect direct Zach, thanks by way for quarter, your fourth We in both it

those and -- the you strength actually So, out broadening our but of as and of of automotive growth a called see we've it’s just that made areas, to others. couple progress well of mentioned some in happy the you beyond channels both we're

Zach Cummins

us give Can cash $X cash And how about cash I right this this end as and then be QX, years? you of you're in as improving business mean to of of approach update? like the in rate, supposed give the of sounds at update about now? of an the rate in scaling what's balance down And burn you the QX here capital year. the million any terms It sheet sort the over but to can feeling thinking is burn kind you're next here needs to couple to really

Sach Barot

How look, Sach. are it's it’s right? factor the in As in QX, that of shifted yes, remarks, burn was contract you? AR. the and collections our it in I and So, prepared Zach, So there mentioned rate reflected was a one of payables, timing my

as collected overall starting for the a that. I that see We have would If have was been the year and we QX. positive since for around It amount trends QX the to burn in significant burn on were us this adjust X.X-ish and for continue burn. rate in reflected somewhere to rate that, in neighborhood of

is perspective, go get year enough before, said do cash in to be So, capital XXXX. positive to them cash goal have normal burn. we under And our through the better from runway, circumstances on I have expect a obviously, of course we the and we we plans as as

Zach Cummins

now here speaking And anything cycles like? I whether to business, disruption mean of delays in you're the sort sales sort -- in in then you that that maybe any of terms term potential of seen of that have that's to from the caused COVID-XX be anything disruption, near or

Carr Bettis

yet, Not Zach.

we more think for folks think of to earlier the as means to very accessibility. there impacts today. exactly see that partners that don't that how risk importance to I I exactly going -- is will here take We same be early. mentioned to -- seen of probably really is think yet. with our the this aggressive It's We COVID-XX yet. the partners, showcase know want haven't need impact today. lot There's out unfolds. yes, to the don't to measure -- know program be in is. But how We too to we the our the a digital an the waiting We're as impact we in thoughtful opportunity way. and don't there's there just of lot and We're feel in But there's do everyone point what a what some business? business reflected impact to launched the uncertainty the we and opportunity we for working

Zach Cummins

that that's of kind MRR we to and I this year's it. certainly through that of end where move you're momentum. as then more from Can we $X.X a nice speak guidance now of from moving your I piece metric this in of the should approach And shifting helpful. is QX mean this guess how progress million standpoint to the away at be historical qualitative towards Got really you is trending thinking XXXX? and and here about more metric,

Carr Bettis

on haven't our this we MRR published yet quarter. Zach, progress

We a see guys make to up-to-date we're quarter-by-quarter to to But But, keep in significant MRR. continuing -- continue. through also rate expecting to be healthy pretty quarter there will growth yes, should and results. the sure here. growth healthy you have Remember we we expect we're backlog

Zach Cummins

have solution, it. for you're starting question the Marketplace offering. kind free be It to going around AudioEye your offering like day me Pro from of just Got Digital final can And trials AudioEye it's then soon. sounds pretty XX that from you've pretty Marketplace? I the Digital the customers still But received any of sense here I using far feedback mean early. so you know give been AudioEye

Carr Bettis

taken And to as adopt that's very as the course we take there, the very, refine solution. delivered customers demonstrated the early sure our and it will we've about make we're possible. success. product for with excited ultimately we'll feedback we're progress to that is our showing a provide look, excited channels. results report benefit a that we're we’ve by some to feedback. to for us of be of And we've they're a free that we're to And and will it it. make true for always, And continue move consumable MRR. believe as the time evolving easy to sticky We've able us we to from the offering product be with -- for capacity exactly the so the that directly long-term. it's our them as and way making to attract on bold from and had as very way some Yes, and COVID-XX to show lot that taken customers in them is Marketplace received well -- customers, the and there'll partner results to responses that Once will that But measure good up

Operator

Please Our next Securities. Allen Klee National proceed. question with is from

Allen Klee

little improved understand using anything you getting margin to more Could you're gross think kind was guess that was was want a and there and I maybe the talk if significantly, reasons. -- you efficiency sustainable, one-time Your other to quarter? margin trying some however if of it's automation this affected I look. what about you that

Sach Barot

Sach. are right. There This is you’re Allen. Hey, How you?

deliver as if that's showed continue yes, the you So you, improvement. different investments. margin margin to our why improve to may also, we we is to making gross remind be gross products. little we And scale. choppy recall, all just as the And target we’re a And

costs, upfront more we as have deliver. Some products

find get we with For example, we and better platform expect to continue do to scale, as time. But it automate, and our documents. to continue PDF over vertical partners, our efficiencies

Allen Klee

opportunity there's think this to you over improve time quarter? you did So what from

Sach Barot

Yes.

year also, us cash also get to what next add from the flow years as partners, vertical as confidence gives as expectation we revenues more as we Over partners, as grow well that's platform expectation. XXXX in positive our but that well. not only to X is And

Allen Klee

things at when Then looking was operating I expenses, jumped your out. couple a

it quarter quarter look the sales. in the of And your The also in and and year-over-year. you expense to if compared the prior just first sales at as percent one was a drop marketing also behind Could for maybe to the of revenue rate Is run that think a growth about rate about new and was versus of that? one-time? how talk what there qualitatively 'XX? anything that Is you kind

Sach Barot

Yes.

here we brand ensure to that our there, most launch an was our and new this it’s we -- a out to we were launch don't customers. go to the little reaching down Because So to how our sales we And costs support with and The is marketing marketing campaigns. type of But that costs down. from as will a run, we quarter-to-quarter. continue of reflection we perspective, launch want we campaigns overall campaigns. bit continue expect products, potential are

XXXX the had cost overall, for expect. the that's we So as what same we approximately, roughly -- in

Allen Klee

costs. marketing that a at sales we is and think would slower about somewhat also revenues rate flattish So like grow How that roughly that, G&A, -- more than should modestly?

Sach Barot

before Well, up are in personnel adding key also we we and it go will costs are Because right? executives. G&A stabilizes, consulting areas adding some

will then So it should over the it and flattening. quarters, up see first we continuously start go X

Allen Klee

EBITDA a that way like margins, incremental of think there Is think margins as your what kind way of you a number percentage? of that to there be, kind might of business of to scale. Is Okay.

Carr Bettis

just to curricular in it for early the later. that depends think thanks question. it's mix that us for Allen, up show areas say, early We the Hey, margins on competence. Sach too Remember I said also. some as invest the I'll benchmark with

revenue deferred depends already of on the comes that in things revenue. it the of increase new that in the that So rate excess doing and our versus from we have we're deferred revenue, revenue contracts

So that things. rate is a balance between two those

be trust So there'll over gross margin time. we around movement like that some

feel long-term to the trend With continuing improve. very line, we being about very, good

Allen Klee

And that then positive get next say how great. cash when you to you flow? you cash define do to hope flow Okay, year,

Sach Barot

from just is flow Cash cash D&A. less operations

think of cash of You also you -- net simple quarter. think during keep also the to it burnt can can

cash XXXX. in flows, expectation will is cash Our instead that be we of generating

Allen Klee

and the like if you there's there's might size, in general of in that how Okay. business that And us we it? And ‘XX, need bookings best to been for is to number, something give not your it and average off on maybe rates changes. in think driving that the of to retention grows. biggest of be revenue reasonableness trying of contract some a do then you have the as sounds where Can it just revenue to challenge terms revenue that tweaking the analysts kind out or figure we help of are in like way mix assumptions of think future to

Carr Bettis

Hey.

right that think rely we're way to approaching a about revenue what We're on MRR I the now we doing for to as guys guidance year. not really with thinking uncomfortable communicate terms going business. are So, in are the of doing we're you and how

we're going If continue that let just really comfortable you But get up year the help. that MRR with to to as any hopefully and that's unfolds. put if helps. So

I I to fact both think to think and get we into Zach's MRR you are guys -- you thus will in reports be and put continue revert MRR constructed benchmarks you far time. to out over to your put out and

Allen Klee

-- that it's Okay. the I think a quarter you going mean I from while. -- And to last I in just long is be question of feeling I've had great seen then guys this any a quite is best my that a again, to -- company

of, be environment? businesses Is to how trying the current you're I'm there really that. might like -- understand adapt of to with ways coming that on congrats like going the having the way can also can -- think to be to what's sales close salesperson impacted deal by -- a can to the customer what the it right like kind to what So they -- of degree word fact or the on that think involved. up without be self to a force that just sort

Carr Bettis

out. way the about we Yes, look, parse which in very the customers thoughtful we're being

space definitely them. are the that the land talking enterprise can in who about people contract with So -- enterprise sales for levels customers enterprise enterprise

The on ways the to a hopefully enterprise business a as contracts enterprise services and enterprise require more that unfolds well. deliver is us our been customers emphasis adoption enterprise Again, effective do through that to in very, do continue I the excited will very be later continuing time, that real level those business especially and are the year with to something of expected need see, has by enterprise we there's strong. we're really emphasis So, over real increased customers think you'll about. acquiring increased in XXXX. But cost

Operator

our At this to Bettis for this back turn over would to like closing session. question-and-answer the remarks. Dr. time, concludes I call

Carr Bettis

you want on today. for employees, for you support. our to Heath. thank investors Thank look everyone, everyone. to to joining forward our and very partners we us Thanks, And introducing call continued Good much, their next I evening. especially updating and

Operator

available recording the replay via full call, I we Investors us conference link to for section everybody call Before for joining call. XXXX year will and quarter fourth AudioEye's like would of today's for a earnings the available company's today be remind you of in conclude Thank website. the today's that

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AudioEye (AEYE) 23 Mar 202019 Q4 Earnings call transcript