AEYE - Earnings call transcript Q2 2021

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Operator

Good afternoon and welcome to AudioEye’s Second Quarter 2021 Earnings Conference Call.

Joining us today for the call are AudioEye’s Interim CEO, David Moradi; Executive Chairman, Dr. Carr Bettis; and CFO, Ms. Kelly Georgevich.

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

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

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

Carr Bettis

Relations now accessibility content press provider is results at you, of Investor operator. section AudioEye After A us for we overview ended the XXXX. again I a platform of brief and business. solutions. also closed, a and website the our second XX, the quarter issued everyone audioeye.com. you we our is thank as our today. Thank for Welcome, will June of SaaS-based market release press always leading release in with joining available the of begin, copy do, just a announcing digital

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

latest compliance commitment clients disabilities. from demonstrate with opportunity gain to Accessibility and with an population private give with to websites both ROI certify Act, American investments ADA sector or individuals a Web our also We the the their an Furthermore, in, of large we Disabilities Guidelines. Content to,

around David $X turning or I XX% MRR, million. XXXX Moradi, recurring few to provide QX quarter, monthly the results. to In over Before CEO, grew our year-over-year the highlights will call a revenue, approximately second our interim

an expand Gross proud We XX.X% reaching customer our remain margin doubled rate. continued year-over-year, than count more ago. in $X XX.X%, we increase XX,XXX to QX prior addition, XX% our year-over-year to retention customer year and a revenue of to from In grew year million.

transparency of customers. but and speaks rate retention that to team high to excellent service the continued Our our not our our quality, solution, stickiness to the provides only

June cash remains of sheet with $XX.X XX, and capitalized, balance debt million zero Our well XXXX. at

revenue two who SMB-focused These these their and all partners of as variety revenue In and our our of content Duda represented a like XXXX, approximately digital channels, vertical include channel platform of revenue also Regarding industry the this Partner general DealerCenter for and from deploy second system all revenue same partners Marketplace XX%, announced revenue products includes recently MRR. partners like both partners types, SMB quarter and such products marketplace channel customers. and management Dealer.com, agencies. partners like the for

the in XX% continue contribute of The the As to to count to channel majority revenue quarter, growth second enterprise ultimately we expect this our the approximately and continued MRR. MRR. unfolds, and perform see customer half channel contributing of in XXXX of in

revenue was clients XXXX, PDF rate. at from We healthy QX our enterprise revenue enterprise a enterprise sales renew recurring same grew product brands from over non-recurring down While notably again prominent to from efforts and our from continued our period. added the direct

with David, the to Kelly over has Kelly of growth. phase next the the pleasure the as Before AudioEye and CFO. to been during AudioEye appointed to of want call experience true recently a work and I our welcome turning Georgevich to David? has skill

David Moradi

technology track he for He from CPA. an data a served Graye transforming of next-generation most leading the recently at their product the is has in technical Thank and Architect, and at and Fuze you, a a today. recently as pleasure Georgevich has and where our Mase powering CFO Kelly executive SaaS spent Mase X products. engineering Facebook, was Sticky.io. the platform, teams her University CFO, of record was Northern infrastructure, career of to software Chief hires, Graye. E&Y. holds on served of industry career management advertising Carr. and e-commerce proven workload audit been delivering with and It lead I systems. most platform, welcoming controller financial to speak couple years want degree as start our focused my at is you She recent at practice She and its Iowa she and Kelly’s previously advanced by accounting

Before that, engineering architects was several of the one at original Cloud teams start-ups. and Infrastructure at Amazon and Oracle he led

continue reasons be of Simply of about AudioEye of team, the calls, I business the to As quality all bright our of the functions. in team the team I’ve the strength confident said leadership of to on the across members from future industry. is put, top strongest prior the so one is the

In have few for mission us we barriers in in addition, market, to set we technology a next success over all the all will advanced grow These up our accessibility. the most substantially factors patented eradicate expect years. digital to which

with unfolding. review company. to outline our and Now second year-to-date our we balance I’m see results and transition the higher-margin, quarter highly I’d pleased to scalable how the a continued progress of like XXXX SaaS

are a lines All revenue discussed on our position. investing in last our first of are business and growth. further recurring sequentially into sales to quarter, and R&D we I want what drive and call: from we very marketing the to I grew reiterate strong

the accessibility in First, the growing. still for solutions market and is early innings

approach Second, for our technology to transparent differentiated. clients solving are accessibility our and

AudioEye’s highly have plans. Fifth, to exceptional scalable. we Fourth, capitalized. on very is platform talent we well Third, execute are our growth

to are optimistic what for Finally, lies us reasons about tangible and ahead. importantly, there be

several customer yet the hundred to not our subscription our partners various clients in are thousand customers AudioEye count. tiers, XX,XXX addition in In have we have current that current potential

Moving on guidance. to

in and our customer on year the offerings was back revenue in call, of quarter our partnerships. based higher discussed half As guidance conference first new tier the conversions to for growth accelerating

we but have about has they significant external these are our we plan, are count, since these converting remain While which our one customer opportunities, year made progress on of forecast initiatives us to growth time aspects at enthusiastic adjust in rely our longer a lines, to to time. We quarter no tracking led own. calendar

In for growth terms million year-over-year between at $X.X the the quarter, will third representing to be XX% of million, believe guidance $X.X revenue we midpoint.

flow. flow a business half have we the cash the of In for the setting growth. managed year, from On future cash operations to positive foundation first the while

the we to warranted, demonstrated have long-term focusing manage on Over X value. years, costs when the shareholder last ability

increasing significant this to the investments opportunity capitalize marketing ahead, are and and Given sales now R&D on growth market. we

the expect additional Kelly, initiatives through second to results. financial Kelly. unfold, pleasure with over we to investment great as revisit a walk in call such, It’s use As certain CFO, the the to for our of flow Welcome, XXXX. to half the program cash to cash view our year turn

Kelly Georgevich

and revenue on all that team weeks and significant David excited part success. I’m key barriers first be you, Carr. at a setting drive continued noting. to is a to MRR, growth accessibility. in play us The and growing my such AudioEye, digital with high-caliber to up two In hyper-focused AudioEye and work are joining Thank MRR are help continue team, eradicating long-term there management worth observations for

wanted and I was and the In was of We efforts. XX% about by mainly focused to on equity our already driven and key versus strategic other and which metrics increase few expanding The increases for in sales excelled Carr was expenses. development by a million, most also focus of business, retention. QX, in was the compensation but increase R&D are in as last customer results increase and an mention product we OpEx $X.X G&A marketing are items. primarily QX have year. our This summarized driven

the adjustments scale in is quarters $X.XX. a net earnings second million $XXX,XXX in section forgiveness versus to towards of our On investing this million year compared flow $X.XX XX% million of $X.XX Operator, PPP this QX connection the forgiveness approximately XXXX for share period. statement. basis, quarter ago loan. our with XXXX, primary quarter about or million last $X.XX million, full open software was both was year and, of call total in period questions. year emerging compensation that, and market. or or or of R&D EPS reflected $X.X for compared development spend XX% GAAP $X.X our gain give in approximately QX commitment was same non-cash instructions. were per share-based spend the Our reflects The with on cost ago in recorded we of loss their This same please QX share $X.X Net per per $X.X non-GAAP to total and $X.X our in R&D the cash the share revenue the to loss the With investing as comparable in

Operator

Thank with Please ahead. go Now you. Securities. first B. Cummins question Zach come Riley Instructions] from [Operator our will

Zach Cummins

can of guess, we’re off, happening up this for kind with you mean, David Hi, thanks of and and just welcome of of David, give pushed-out I major a questions. why starting I at ended us kind those what my seeing aboard, this some sense line partners Hi, time taking Kelly. Carr, juncture?

David Moradi

Yes, sure. Yes.

earlier, pretty outside we dependent of which much our external on time are control. mentioned are lines, As

not Our as up partners expected. we ramped fast as initially have

growth see approach well. take and get and more we’ll the is up So digital in confident a going our on really In Agency feel timing. still we We began to by to did just had channels. these to We Enterprise, more conservative This quarter. guidance. a in shifting ramp we’re as opportunities quarterly partnerships. quarter of each based good

Zach Cummins

just And core PDF the mean, that us rate channel a of opportunity, QX I a obviously, segment? remediation recurring you into the kind of of revenue digging the in last can revenue. sense But of Enterprise the year lot give Understood. within had growth Enterprise

David Moradi

Sure. Kelly, that to want one? take you do

Kelly Georgevich

period-over-period enterprise Growth Yes. revenue XX% in QX. in recurring in was approximately

Zach Cummins

with And that MRR – enterprise? the growth MRR growth is in

Kelly Georgevich

MRR in – million channels QX enterprise. $X.X from XXXX. in with $X was Overall MRR That’s Yes. all in XXXX growth QX XX% from growth million

Zach Cummins

for do you of expectations go-to-market the now major approach some of partnerships? into that any David, have other you your I to changes mean, these sort for timeline have of And kind Understood. reset plan

David Moradi

No.

this think just based on I timing. is

We have in massive front of doing, people, been a to and and think invest into us. everything marketing R&D, do sales is there we opportunity are going we

we doing. So, we not change anything that are are going to

going accelerate. In are to fact, we

Zach Cummins

has Understood. major It then for you digital I kind final popular under And like changes a become new the in increasing overall just administration. here, any seems competitive especially topic accessibility mean an of have the me, question seen landscape?

David Moradi

Yes. There competition. is like a We competition. definitely more the little

and We and automation. with accessibility level the superior is monitoring an as of you transparent most have highest a product continuous the solution score, differentiated know. It

So, very confident. we feel

Zach Cummins

luck quarters. of thanks for Well, the questions taking best my in here coming and Understood.

David Moradi

Zach. you, Thank

Operator

H.C. ahead. go Please [Operator Scott comes Instructions] Your Buck next Wainwright. with question from

Scott Buck

Hi, for good you afternoon guys. taking my Thank questions.

what I customers from of still slower some is First, the looks as these a conversions, like. amount Are absent potential sales of you the pace of the customer am of a pipeline if fair or industry – seeing maybe or this reflective kind curious engagement kind more pushed-out whole? of

David Moradi

with discussions in all are We same folks. still the

nothing It’s has from they of more so just changed do don’t – we And the that when things. control respect. timing

Scott Buck

something we structure increased Yes. or And Okay. change this reflective curious in of the some No, more business? six thinking I kind quarters is whether the as a permanent am about second, of of of cost temporary this over understood. should next then the be investments, the

David Moradi

opportunity and is today TAM. think is This see side. Okay. a the all million here. with a the billion to about The market in $X.XX billion total, we We digital years, next $XXX few the massive probably TAM over are the consultants to $X going

So, into be we investing are going that. to

Scott Buck

That’s I you, Thank appreciate probably David. the guys. color.

David Moradi

Thank you.

Operator

Please Allen Your go ahead. next question from Klee. comes

Allen Klee

Yes. out, is that have can you put how there of explain up the timing Hi, issue for the long in platform terms or new new – of that takes? an you signing customers,

David Moradi

That to could on is website, very client few going bit bring to enterprise and a the quick. an is marketplace a of instant, the partner on take who is it’s from months. it’s platform take also longer sites tons standpoint. going If integration A

Allen Klee

going cash it half? of cause I turn is sure you be used one not that your in what you the that operating what – know don’t – the positive. you guidance year the a I second are you of that looks used that but to Okay. – factors to – are And your have would if so term flow now quarter. is, – one say to was to But things am the certain or negative for it for it

David Moradi

accessibility we over is believe of the and the innings digital grow We few that years. Yes. market are this Sure. going next early in to rapidly expect

maximize is we long-term tech invest value. our going to going to increase So, to which leads, we shareholder are think the

on from marketing we and investments already the there and R&D ramp expect starting positive sales see to are making further momentum side. are the to up We

Allen Klee

share time Okay. what the me Could the you you of as tell count is it? latest have

Kelly Georgevich

Yes.

million. As of August was $XX.X Xth, it

Allen Klee

is you just my – last And left is much or did you. how quarter? the of how raise how much of much or have during Thank left? ATM much And the do how question you

Kelly Georgevich

Total In is we $XX.X not balance through and cash raised of not March, it’s and XXXX. we as quickly. million, raise very now again million, bringing did so it in QX $XX.X

Allen Klee

you Okay. Thank so much.

David Moradi

Thank you.

Operator

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

David Moradi

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

Operator

you The has attending Thank concluded. conference now for today’s presentation.

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

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AudioEye (AEYE) 12 Aug 212021 Q2 Earnings call transcript