AEYE - Earnings call transcript Q4 2020

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Operator

Good afternoon, and welcome to AudioEye's Fourth Quarter 2020 Earnings Conference Call.

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

will publishing the analysts. we from for remarks, company's the their open call up questions Following replay available I this of recorded for call like the will a would to www.audioeye.com. be and remind company's website made Relations the Investor in everyone at that via section link available

call will and assumptions facts which the to that most forward-looking that available release the words on factors the the filing of or Form of considered the made the predictions, uncertainties. include by cautioned discussed Litigation these are A management the our statements measures section Executive in forward-looking other www.audioeye.com. and date to today or projections these financial during similar to identify company the are our any the belief current press during Further, on participants statements. would could the statements expectations statements. to call Relations conference Before and AudioEye sections I Participants Securities Securities statements of on management's reconciliation subject directly this certain believe, posted in and duty forward-looking Actual estimate, of Safe materially is of future AudioEye's measures hereof. GAAP the financial management's all The statements will about place turn Investor like financial undertake statements. not to reliance of statements, non-GAAP results XXXX Harbor are not at expect, that earnings any call differ this release, course other non-historical comparable confident, in website call are non-GAAP over measures. with not comments company's in update based forward-looking Private of events the and only and does be and remarks correct factor risks Chairman, forward-looking its company's to made anticipate, risk remind on a are report to reports such provides undue expectation statements. annual and XX-K reflect quarterly AudioEye as Exchange for today's Commission. The These Act Reform because

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

Carr Bettis

operator. you section us a at for with Thank issued market press audioeye.com. After as in press we results website A everyone, I'll the of overview. and do available release for XXXX. our of announcing Welcome quarter business our thank always fourth the joining you release close, the December is Relations now Investor today. begin XX, copy the here ended the we

SaaS-based provider and We are solutions. digital leading the accessibility of platform content

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

clients, we individuals from with an We latest sector population an websites also to in or for Furthermore, the give with to the and Act demonstrate their them accessibility ADA large and WCAG Americans a for our gain X.X. guidelines with both investment web commitment ROI disabilities. compliance Disabilities to of content certify private opportunity

revenue quarter MRR at XXXX, in basis into On revenue of recurring million, XX% fourth grew or strategy of at worth in year the quarter XX% looking to I'll our million in progress about million, million bit results. gross straight the $XX.X margins fourth We a It's of of XXXX. further of to was back quarter context. quarter, of which scale. Before Interim and XXXX provide Gross margin to up marks the another million a margin million QX XXth and fiscal turning of David or $X.X around record automation full result last margin had of the Monthly ending growth end at gross revenue, quarter was Gross increase about put and a was the revenue, MRR of year-over-year. second and for quarter the the XX% $X.X This XX% end over benefit XXXX XX%. a was our CEO, and $X.X $XX.X to our in XXXX. the was in call fourth Moradi, to quarter our $X.X excellent the few compared materially the XX% fourth XX% profit the over reflects from of over XXXX. Again about year. QX year. the company's a quarter revenue full is highlights QX of truly to increase

mentioned expect period. revenue to past, year in in increased same margins of million to total the On revenue XX% continue gross a we about improve. ago year we our As full XXX% $XX.X about XX% from $X.X the gross million of profit to basis total

very with in also We is approximately ended acquisition customer XX,XXX growth QX strong XXX% about representing customers New QX. year-over-year.

which are rates. at very We proud customer strong our of remains also retention, historical

quarter per retention million about Our year $X.XX solution, the XXXX ago $X.X to per customers. the but loss was transparency to the service to provides share share to or of only rates our same $X.XX excellent speak or Net not that period. in our our compared of high and $X quality, the million in team stickiness fourth

compared In fiscal to However, million QX XXXX. for period compared $X.XX same share. share on loss the or non-GAAP $X.XX basis a improved ago On channels; enterprise, the about the share-based from an primary million share for fiscal a other, to to revenue On three year non-cash, and for year earnings net update net full The to loss amortization or loss with year year or or XXXX, for million per partners $X.X $X.XX $X.X XXXX. $X.X basis, for full and $X.X QX per million marketplace. has or net both about interest share to provided the our non-GAAP per GAAP XXXX per and $X.XX $X.XX annual included per expense vertical and of the or loss per $X.X was issuance. basis, share $XXX,XXX an of year was $X.XX million past, adjustments share which compensation on EPS the we debt related the recent

same partners of products has marketplace the of for the these growth and more channel. from XX% revenue channel and vertical SMB than channel and such all digital marketplace quarters partners as partner last enterprise These CMS a types include focus marketplace agencies. strategy today; channel and In our evolved to Duda variety and secondly, of and six primary of over quarter the However, our revenue includes two deploy on focused this products from the all partners who revenue general channels The partners our partner industry SMB their XXXX, fourth Dealer.com, platform revenue MRR. like customers. represented our like and

in expect continue MRR. explosive channel this count growth customer we to unfolds, see contribute to XXXX As and

about sales We from also our a prominent and clients and enterprise focus add remain efforts our continue automation healthy enterprise continue on benefit from In to our channel. the excited renew transparency. our enterprises direct Large fourth brands we quarter, also to enterprise rate. at

their that digital proud large small AudioEye both accessibility corporations and large are agencies We with and government trust multinational solution.

business. the impact XXXX, the we just the its of Finally, discussed global word of about a spring uncertain COVID-XX. on and negative pandemic Since our impact

platform the general, our a opportunities will pleased we're about up. headwinds is still with brief to impact update uncertainty over provide call seeing being David? development. in the new turn commercial to activity on I'll of pandemic there COVID-driven David, you're picks and the now as say While replaced business the who leadership

David Moradi

I pleased the a Thank are not is determination results fourth my you, speak our have quarter with but for eradicate single-minded am to on with ourselves achieve the resting Instead, patting we XXXX, excellent today. Carr. accessibility. back. mission, to all It digital pleasure barriers and you or our to we

leaders requires you speak Our great differentiated and about things; bold, platform. two mission of uncompromising employees. want and a to AudioEye's execution with first, I important team

Second our team will the strategy. which on execute

points to of our trusted First, a an biggest accessibly fix. accessibility announced provide on The truly coupled the features by comprehensive most technology-first the thousands offering. we platform we new on shows the platform period. the of accessibility also platform industry. we one. but always up On that and world's the We of advancement representing agencies, client's with of platform. February monitoring, to what accessibility. differentiated tens have We Yes, product brands significant SMB's US is most do in score I improve for will discuss day we government accessibility not some by digital score largest by XX the a X, advanced answer next-generation and customers artificial AudioEye's intelligence do by can some are a

making believe present at accessibility. to clients help accessibility solution subject web market, the fully technology. on are transparency Customers their of claims matter but is and to scalable, team. great Without of we technology build not and we clients technology transparency meet it. Since and that XXX% there issues opaque assisted that experts cost-effective to Our demand partners It full needs only develops with is IAAP possible. that individuals with is paramount the certified the not the we industry About We unsubstantiated should further think as worth automated remembering human be left will disabilities. will improve no available products behind. addressing is help is highly that robust, this create the our

believe at he members to integration add without client depth led we we Business joined significant experience CEO, key last revenue today that additional to the our December, delivering recently leadership Rob team. we as tenure the most Chief as new I where question spoke In and strongest AudioEye's have growth our leadership Pinterest platform Ulveling acquisition. my team continued and During we have leadership. quarter, have Officer. was Since history. strategy Rob two in added to

Before through the also and Pinterest, clients The with was of integrations Facebook drove Facebook he Okun thousands of he Facebook of of Development revenue. data beginning billions led Zach's globally. partnerships and tens acquisition Conversions creating helped in their of Officer. where we announced led dollars revenue. in API. month, served hundreds off-site At of as he of recently this dollars served a Sales at Pixel like and steer VP at partnerships dozens at powered the as and platforms billions joined Product Facebook the products Chief of where for Zach of Business acquisition. company He Facebook of platform customers TheFind the Zach millions most products integration

Before teams Web high-growth Cloud Facebook, Services and Oracle led at Infrastructure, Amazon startups. several product he

is an with work our such an to of individual, believe exceptional a staff our to S-X too to is Zach mission-driven an In for attract implemented raise and an in capital. they We're net talent have can achieve posed price ability we Rob advantage strengthens additional because potential. over $X.XX rapidly us such full as share. and That said, the they that together AudioEye This balance help cash growing our of in around sheet million working February, our at of take honor leadership and opportunities AudioEye's is Our new about space. about and growth pleased employees. is ATM explosive not we market and to a gives but that a flexibility follow program registration this talented complete shelf with cash $XX leadership team single raised success average report team and and to us

cash terms In XXXX. growing MRR becoming focused we flow guidance, on positive of in remain and

a of to XXXX and are year start million. reiterate We guidance in range off $XX full our to million $XX good

partnerships. tier as offerings second higher to growth customers in and expect year converting of half the We we accelerate new to the announce begin

I Before to financial take thank the walk a call contributions for him results, Sach minute his additional through over want AudioEye. turn I to to to at some

have growth added our significant and during years, critical two improved a been last infrastructure. systems strong and and for have achievements necessary These the talent we future. set have given We processes the foundation

are and smooth good Sach. Again confident Sach future We in you, wish his thank endeavors. a of transition luck

Sach Barot

Thank you, David.

future I by really AudioEye past cheer all I continue success. my and AudioEye at and the two strong and Let in its company to me proud enjoyed and and over I'm our achievements saying, years. of collective successes a on its will mission the believer time start I'm

and for customers and focused David, world. great we top immense gross to related our is pandemic enhancing Even on digital need As margins, major heard revenue increasingly growth shareholder our drive value continuing from you had an and ongoing with solutions driving expanding have remain line and with are QX. We there a challenges, for we our provide macroeconomic in value. Carr a the capabilities,

Now already to results most but on key of summarized business, the Carr and to the metrics mention few I results. other the a items. wanted of

specifically last increase costs. an OpEx functions, OpEx across in which talent QX was about The sales First, year. XX% was of expenses. versus increased in operating $X.X full higher year. In in similar various year the increase of quarter. primary million about in an of $XX.X QX, equity investments were drivers and that was for fourth basis On compensation marketing and OpEx than increase XX% or are non-cash increase for drivers prior the product this about to million, a The

– If research you would highlight about like I our also additional like highlight to to total spend. and development information also

spend $X.X runs rules to to approximately XXXX in but investment. of as capital due accounting total R&D Our flow it $X.X was the million cash statement million,

to like approximately For million to partners and this in $X bring comparison for With against employees, XXXX. our call purpose, in And in Operator, last we the shareholders million $XXX,XXX that in of digital please of we'll XX% about at their shareholders We that, equality end all investing safety in we X% their in to scale closing, emerging compared this wish it XXXX. understand for in support, year. I compared think We give In market. quarter for continue family's of as cash is customers, and instructions. the the would to open questions. our with are $X.X represents investment ended for health $X.X or everyone vision sound access. our XXXX million continued thank revenue important to enthusiastically execute to I

Operator

question. Klee conducting Thank question we proceed Instructions] will of Please Ladies [Operator at you. question-and-answer with gentlemen, this from with Maxim first your time, session. the line and Group. be Allen comes Our a

Allen Klee

results. advertising up-selling price Yes. strong digital plans of the and point Congratulations how The about how think that the January new to about that's to you in that's agency. signed Can question, customer you a talk the higher customer? that you potential on progressed

David Moradi

Hi, you XX,XXX Allen, the January. mentioned yeah, we in customers added

begin material think to coming upgrades revenues. could be to expect and months the We in it

Allen Klee

different could you with that rolled associated there's that And And it? you platform Okay. then price talk got? the if signed the a you new about out, you feedback point

David Moradi

we the knowing part We're the how leader scale further platform and and certified accessibility their AudioEye's in of Zach our CPO R&D. show far increasing technology we'll commitment clients People somebody the The where its makes score category love accessibility new experts. tech are transparency. to gotten them our opportunity accessibility commitment as platform they're is the hired The product also can to on for delivers that, our at. clear with improvement our great customers. to demonstrates they fact We've Yeah. an take and objective to continue to invest our and today, score the pedigree efficiency, using of journey, where far. and as The love and feedback platform so commitment

And so it's well. going been

Allen Klee

with same things. you smaller that? the In a the quarter in that you. change last at customers the challenged pace with in were little any of or or you've your of two, COVID terms some Thank did mentioned see quarter, that some fourth happening Is

Sach Barot

is but wouldn't impact, it this call Sach. Allen, Hey, I We material. some saw

quarters happened. changing the that than I QX first better think three was perspective. from has of some that

Allen Klee

-- Great. on And just follow-up. then a

that March with us what You tell raised of -- what result share as the Could ATM. you count is? current money a mentioned the through that you

Sach Barot

We expect to be $XX.X close it to million-ish.

Allen Klee

of is As that? period what time

Sach Barot

-- for Well, our about specific of I March will it's be And can't will on at million. March Q give detail you million. it look date, if things, but right? if $XX.X it $XX.X X, a a But… you X, couple you

Allen Klee

Okay.

David Moradi

around range. in you it that shares, If shares; math the maybe XXX,XXX XXX,XXX do was somewhere

Allen Klee

-- just -- for you working question new transition pleasure a last been last -- guys about it's Thank you're is the explain how Okay. you. with of thinking CFO? Sach, you. My Could my a

David Moradi

commitment a Only and leaving search. us is we we ensuring his a really now transition. conducting right Sach not that to we're appreciate have smooth And

Allen Klee

Great.

for Thank Okay. quarter. you everything. a Congrats on

David Moradi

you. Thank

Sach Barot

Allen. Thanks,

Operator

comes question Cummins Zach your next Riley. proceed line Our of with Please with the question. from B.

Zach Cummins

aggressive for luck Sach we're wanted incoming we any It's want the to accessibility. in Good questions you I and of mean, of and baking pleasure more of year. are best David about with in I January, in lawsuits digital progress and the expect be years? -- over to rebound the much how endeavors. get of this current current accessibility. David really Sach. enforcement ask of working overall or been environment, sort past administration to of the hi. a Oh, is afternoon, in Thanks you in next seeing I improving my web for environment about your as perspective going taking couple just here likely that you through a of tailwind kind your new around terms Carr, the thinking are

David Moradi

this I do at think what just and DOJ or enforce moment. we'll kind on at business with running plan our upside and the we're they of administration, the but see executing that's it not,

Zach Cummins

is that course names the pretty months, give backgrounds. of the insight of then some going mean, of seen strategy, past And of you're and big talent your with Understood. phase you into next how over we've guess going AudioEye's this play with upgrades I direction call would I kind we for with growth? couple us that what can to I the impressive into mean,

David Moradi

customers of with clearly platforms, strategy hundreds of Well, thousands sites it's millions. if an major integration major not have

And Rob people So hiring like and direction why that's is to that's this Zach the we're execute. going.

Zach Cummins

just pace more sense of of SMB a towards be bit in appreciate with the move type the clearly about it of forward? little it's type thinking the the And a trying like I'm what realignment mean, marketplace that that Understood. segment? seems of integration how would XX-XX mix. disclosure like It of a to get we I strategy? there. two towards With moving the mix to your moving segments, should be an I

David Moradi

a SMB's We Really like us is market explosive the for the is growth on good SMB is it, forward. Enterprise Yes, market. think but market. will going I accelerate. it

Zach Cummins

Understood. about sort are I or extra initiatives gotten whether potentially thinking even of the with And cash you've any could strategy? the of how it accelerating under the deploying guess investments extra ATM, right organic $XX M&A mean, that your in exploring that then million now, help have proceeds you be I just you that accelerate

David Moradi

having maximizing the more all and it's cash always like balance sheet risk but focused going help we the really partners, us shareholders and opportunistically. and on We evaluating for attract to on value think we're reward customers

we're going and what So, think to wherever we That's value. we can to maximize we're do. invest going

Zach Cummins

then, you've the rolled me. final customer, this I have every is you to of that customer out, just disseminated that Around the new to And is existing question guess somewhat that that have transition through platform or for base new platform launched? the upgrade Understood. you automatically to something to a

David Moradi

is happening months. There on, two that's Yes. next a the over transition going to three

Zach Cummins

Got that subscription are it. kind is there the planned upgraded kind part that half of second And the of plans the in year? of for of

David Moradi

part that. is a points. No. not This the pricing the really That's difference technology, not the of just of

Zach Cummins

questions. great. for helpful, thanks again really best forward. That’s of appreciate Understood. going Well, luck it, taking and I my

David Moradi

Zach. you, Thank

Sach Barot

lot, Zach. a Thanks

Operator

We proceed question. Please follow-up have Allen with Maxim your line with from Group. of the a question Klee

Allen Klee

questions. two It's Hi. Yes.

based think expenses you you. I for then, thought you answered of first operating improve? this where expect secondly, can that they the true continue confirm that do were continue to improve. to margins think I XXXX? about you Thank Is And want run it kind you one, it. we rate the think of how quarter they on say but to I heard I gross to

Sach Barot

a based remediations new margin take perspective, we Allen, gross automation, and expect both. that So, we technology. our this have increased always From mentioned on right, I'll

them XX%. year gross more. expect in XX% even next time. margins we but fluctuate, to may -- over and to -- continue QX And for We two touched improve They be saw to we to to years, you touching want time the over over

your next So, should give be expect for we can't should in over and margins you to to It only specific to you expect you beyond sure, But, not few quarters, as contracts us a -- it XXXX, modeling implement. well. number. purposes down the -- continued improve to we to continue I grow. for but comes what

Allen Klee

expenses? operating and you, Thank

Sach Barot

perspective, right, especially a increase have you lot bit, we we we before. saw expect talked R&D. prepared as in to From are in -- mentioned about this remarks, OpEx Look, an Yes. my investing OpEx driven a

in product. market. as are sales marketing are take And We to talent as of investing well and emerging advantage hiring this we

We of a us. have lot of front in runway

costs based stocks factors the outside that G&A different more sales And to you over comp, few -- of play are prices quarters. by fluctuate from start many issued. on next come including So perspective, -- prices, share so should the plateauing play, expect or into increase way, the less marketing which that should non-cash when and equity will

fluctuating OpEx an drivers. So, a as well perspective, be one and we that the of sales will But be go. to marketing from number as expect overall, big

Allen Klee

great. much. Thank That’s you so

Sach Barot

welcome. You’re

Operator

I'd no management in like are hand call There to the further for remarks. back questions queue. to closing the

David Moradi

for you look today, to to our next forward support. We partners, continued us call. and Thank Yes. our want especially for thank investors joining on employees, their you updating

Operator

today's gentlemen, Thank you this conclude participation. your and for teleconference. Ladies does

You day. at may have disconnect time, your lines a and this wonderful

AudioEye (AEYE) 12 Mar 212020 Q4 Earnings call transcript