AEYE - Earnings call transcript Q4 2021

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Operator

Good afternoon, and welcome to AudioEye's Fourth Quarter 2021 Earnings Conference Call.

Joining us for today's call are AudioEye's CEO, Mr. David Moradi, and CFO, Ms. Kelly Georgevich.

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

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

Now, to Moradi. Sir, Chief David proceed. Officer; Executive call Mr. over AudioEye's I'd the turn like please to

David Moradi

of and you, us. for operator. of at acquisition press the today, release copy of Thank recent is Bureau ended of Welcome, our Investor first, closed for press exciting acquisition our in This acquisition mission all to of would you discuss to section the eradicating of both the the releases digital and ongoing issued or press XXXX, accessibility. available market full December fourth positive barriers releases: and joining everyone, step our our BoIA. in two BoIA. our quarter thank another Relations website A audioeye.com. results After Accessibility we XX, one, is year on Internet one I, like

are users. thrilled team is customers forces our direct We the product community accessibility ultimately and of additional to joining options to provide that end entire BoIA the

this acquisition believe shareholders. value-enhancing also be We our to for a

shares. both diluting a in through and competition product without We accretive the are pulling offering revenue This for away deal expansion our stakeholders. from scale all great is

unique stands earnings said competition accessibility from the AudioEye previous As and apart with market we in have in the solutions. our calls, transparent

customers accessibility product to University, of experience source. at the for across of at accessibility clients, Dillard's, a Godiva, fix an our levels guide customers human-assisted our full journey. leader automation technology, for our fraction issues key of a cost BoIA two We of customers approaches. to traditional acquisition including decades giving of automated in issues which our in step-by-step industry customers the all and with hundreds patented who platform a of for to suite, accessibility the With prefer Harvard are Rydell those combined Chipotle, dimension accessibility the for highest BoIA solution end-to-end fix combining testing want delivers an us implementation The who software, Deckers, is source, adds enterprise and a giving their with

are the to BoIA. will profile excited about AudioEye. to addition immediately of product also In offering, the financial we be acquisition attractive accretive This

margins revenue. with from are BoIA In maintenance. and clients we are the to general, incremental onboarding $X expect terms ongoing our similar subscription of XX% accretive the gross be delivered in acquisition of XX% top of From million accretion line, of standpoint, revenues and revenues approximately XXXX. from In of initial gross BoIA margins, the will derived an the

new upsell acquired can we team. that now we summary substantially continuous as on results of new in trusted BoIA, assets leading team. we results-oriented Square will very with and key business acquiring I want all welcome platform. also solution a the position of knowledgeable In December XXXX. to other the I ADA, Square Squarespace our XXXX, believe core a ecosystem. quarter give and to the within the team base a from have With fourth want these welcome for Squarespace the highlights we to accessibility move members accessibility also now customer also products ADA warm to Square I AudioEye. a our ADA, We to In in of AudioEye a the monitoring. offering, such of gain

representing achieved quarters. we fourth As noted million, confirm outlook in results, from guidance high $X.X the prior quarter of that we are our at the to accelerated of revenue growth pleased range for preliminary end

agency including and of was improvements of channels HR for to with newly with payroll Overall, a large see of a and a software contract the all global launch financial and year growth revenue healthy pace contracts our platform, critical and and signed company of in with reporting revenue and software innovation results institution. the rapid quarter XXXX significant MRR. in issue a next-gen continue million continued and ended substantial with We $X.X automation. a service the of growth a wins quarter several renewal Fourth recurring AudioEye, included

we'll continue industry-leading industry, the assembled with in product have We raise bar the technology in investments. and strongest to team R&D the and

Moving on to guidance.

to to the with continue term. runway on and cash well in have business $XX capitalized long the continue We for million the investing December be XXXX, of XX,

We compared expect slower as to XXXX, in gain we efficiencies. into talent investing XXXX as but at to investment continue rates

expect excluding remain first non-recurring in items, that the fourth We cash to half, sequentially and remainder the will our down for the similar the burn trend year. quarter then of

midpoint. quarter. for representing yesterday acquisition revenue are quarter, $X.X three million guiding and BoIA at $X.X the revenue closed will The for weeks first contribute We growth year-over-year million to of XX% the in growth approximately the of

performance recurring used revenue, internally metric, convert revenue. monthly new annual versus operating to growth a Lastly, measure through recurring we will continue previously as and revenue we new to KPIs,

begin ourselves The in will the who first reporting CFO, other us quarter Kelly? industry. allow software those better ARR will We to similar baseline With of turn annual Georgevich. use primarily to now XXXX. the as will companies plans metric used SaaS Kelly that, to against I a and AudioEye's the recurring compensation for revenue over develop shift call

Kelly Georgevich

David. Thank you,

I Executive January a and David on I full-year summary QX Chief of officially CEO XXXX. to AudioEye to from with begin XXXX, Interim in behalf moving for Officer Before want of first congratulate

for Bureau you March X, continue the transaction. Internet price and on some customary acquire to recent Inc. cash aggregate is at of information all to of the paid lead of outstanding subject we stock interest $X We a team equity purchase Accessibility, Bureau into capital closing million The to the are adjustments. net have the XXXX, entered additional provide happy other very On vision to also future. financial agreement like was working Internet of to and I purchase would AudioEye Accessibility and

the the multiple agreement times. be valuation purchase achieved cash relative of is assumed. and and liabilities not targets cash revenue and will report, in acquired to date intangible contingent value the net acquisition have milestones provides the for provisional of we timing BoIA's revenue accretive, the if completed around of all assets that our payments in for to this paid, deal the are acquisition based of tangible on and addition, In BoIA XXXX. earnout XXXX Due to revenue X.X This enterprise highly

a our fiscal disclose will We purchase March the consideration of ended XX, allocation in provisional and XXXX. recognize quarter

a providing Now, full of summary results. XXXX and year QX

was $XX.X million in QX pleased million million, straight was ending year of year-over-year. fourth XXXX MRR XXth mentioned, we XX% which quarter Monthly the increase and million, end revenue of the XX% David As full in quarter quarter $X.X performance. also over of quarter recurring grew year at of the $X.X growth On growth, XX% are XXXX. at the with record $XX.X fourth the over to XXXX, fiscal quarter our from at our a revenue, marks the end MRR, XXXX. a or basis,

products marketplace XXXX, and partners and this channel these of Partner and As year-over-year represented and and includes variety we of for approximately all customers. a revenue two channels: from the products The communicated In MRR. our previously, who XX% Partner their from quarter SMB-focused grew and fourth Marketplace have XX% Marketplace channel SMB revenue revenue deploy same revenue of revenue Enterprise.

expect continue our grew perform The On XXXX, contributing ultimately revenue in basis, and Partner continued XXXX. XX% in and channel MRR. full-year Enterprise approximately We count this MRR. in the Marketplace customer to to our contribute to quarter, to channel see significantly XX% revenue in growth a of and from

added financial increase year, prominent grew XXXX, a in the revenue continuing for QX same While prior over channel XX% consistent project-oriented in PDF was On brands enterprise direct channel. drive at the and sales from our approximately revenue We revenue the large Enterprise XXXX basis, rates. from year-over-year a remained again including down recurring period from Enterprise institution, with grew our to XXXX, enterprise revenue. and recurring XX% a efforts, to Enterprise revenue XXXX full-year impressive clients total our renew continue in

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

transparency to to service but retention team that customers. solutions, stickiness our excellent the our customer not of quality, speak high rates provides and Our our to the only

with New customer We growth representing customers, continued approximately year-over-year. XXXX. acquisition QX XXXX XX,XXX QX growth ended XXX% in

million each revenue to to quarter in in QX customer profit compared XX% fourth increases see of our continue counts Gross was of channels. revenue across million and revenue of of the XX% the about or $X.X year. $X.X for last We

adjusting significant period, percent, steady research the are total pleased the platform development play which resulting increased year-ago total and gross of We increase million, factor In million of inclusive QX about from compensation about given XX% a full-year is cost and or increase our drivers going all gross customer in revenue. to of XX% this million directly a the $X.X or expense continued and $X.X litigation. the and our litigation stock basis, million $X.X million and with and profit. XXXX, million revenue profit was On of was costs, which million $X an increase OpEx, $X.X in $XX.X of million expense, of to of investment $X and revenue in marketing. for in sales gross last of for success about $X.X and main in stock compensation same margin after or XX% investment revenue year $XX.X development QX million versus research The

QX was for share in total recognition the total million. of XX% increased about scale or spend flow at spend R&D fourth approximately Our future market. last opportunities expenses and $X.X loss statement. the $X XXXX the to QX same Net QX approximately continues the versus sales. to in Sales quarter from share in per are brand outreach about XX% R&D million, or drive in costs revenue investing of in XXXX of reflect investing is period. this This and to per and million and this in $X.XX $X.XX section was development We XXXX $X the $XXX,XXX, quarter market see commitment million $X year-ago software approximately in compared great cash investing approximately to with reflected marketing our this year XX% towards

for from for basis, loss compared per full-year per However, compared about a was on or the net million million XXXX million or was litigation the per year non-GAAP reconciliation XXXX litigation. $XX.X The adjustment XXXX. our annual a loss $X.X fiscal $X.XX EPS or $X.X for our for to to item both expense per non-GAAP $X.XX The compensation, QX patent share. GAAP XXXX, net was or full to year the our for the an per year-ago non-GAAP loss year line $X.X basis, share to share-based per basis, $X.XX was litigation the $XXX,XXX is new for period $X.XX $X.XX expense. million GAAP adjustment about earnings net share severance fiscal $X.XX share On million share XXXX. On share earnings or a in in and $X.X same and related loss non-cash QX or of and to primary

XX, December debt zero with capitalized cash XXXX. of well million remains and sheet balance $XX Our on

I that controls on open value XX-K a for processes and and Operator, effective. status We would the in give controls our in building of we outcome that, as to grow, With Lastly, instructions. like highlight to effort. the ineffective XXXX robust place questions. effective change is call control from tangible up this please we our

Operator

[Operator Instructions].

Now Zach our B. Riley Cummins first of question Securities. come from will

Zachary Cummins

Congrats the on of end year. the solid results here to

Just BoIA. starting acquisition of off the with

Just to that mix million. I being with that think compensation is clarify to trying that a you total just Is along confirm, paid the Or So, of cash? cash? $X front. was issued said all stock on

Kelly Georgevich

and The $X on I XXX% mentioned, earnout agreement cash, provides purchase million XXXX payments is as revenues. cash based also contingent at all And closing the in for cash. XXXX

Zachary Cummins

to of upsell the current some BoIA. Just their customer board? for overlap just bring there customer them of with to once terms curious base of you kind looking on at is immediately in opportunity you the I'm strategic any rationale,

David Moradi

far current customers. the that they is They're which at JavaScript know. And No, approach separate all I fix do. as the there's different no things as source, we overlap from

now, compelling. full for So solution we really is have all customers, a which end-to-end

we're think this. the there ones doing only out anything I like

Zachary Cummins

my of to of forward there, to really some major for you opportunities? that as speak you about WP kind caught Engine. can kind of going Can guys partnership was the partnership opportunity start expectations that? attention you David, that speak potential you ramp on and the One

David Moradi

to one. And base to of exciting We their opportunity, for We're launched lot early exciting this both over partnership. a that very different the an a customer the that's Yes, time. long-term ways in on phases their companies. sell of It's app store. but there's just

Zachary Cummins

a that any have through spoke Can pushed right. update on any of quite you few to that to? give kind partnerships previous us of the the know XXXX gotten you I there's

moving update of progress can those sort forward you partnerships on with give those? and any So, prior

David Moradi

of automation from little the folks, a that the the we're them services. want now, are sell what on bump also all who the agency, did so to customers same some we toolkit, Speaking upgrade visual getting service to basic we but getting to

proposition it's So, starting a to it's for long-term happen. actually us, but

Zachary Cummins

cash burn balancing are in the appreciate over I the you I of around years? left of kind some plans pursuing and to expected the the Finally, thinking on of guys color ATM cash growth and versus available still know to kind of next you Any have concerns the rates this here. sort capacity how spend on available execute cash you. couple opportunity about But business? your

Kelly Georgevich

can I comment on that.

BoIA meaningful transaction time. raise While have generate not we the a is capital this for a investment for AudioEye, cash, at plans expect to we do and

Operator

Our next Wainwright. Buck question H.C. comes from of Scott

Scott Buck

BoIA, ongoing work customers First any one. given on of the kind at ongoing they of you longer-term those an kind have do many what or re-up have of and idea customers is? On how is time

Kelly Georgevich

enterprise BoIA your on second number question terms of It there of was was… impact significant they I'm customers. customers. primarily do have in have a customers out enterprise-type won't of material customer count, but the our a number sorry,

Scott Buck

kind opportunity an oversight, XX the ongoing out and If extend is and revenue another of upfront XX% of they do is how XX% maintenance often or months that so? XX%

Kelly Georgevich

signing contracts one-time the of customers also reoccurring typically support reoccurring service good that majority continues for the are and And on signing piece. retention reoccurring up the for is The piece piece. for

Scott Buck

you you're XQ versus to as up XXXX you XQ quite the a sequentially little and bit to looking down XQ year-over-year, the third can not extent in quarter. speak at versus difference bit but XXXX one, XXXX in Second were XQ then gross then, margin? the a Just little and you're XXXX,

eye keeping else out just should something on? that's we that if curious So an mix be or

Kelly Georgevich

the customer with our R&D especially significant full the our year, steady of approximately in we're platform margin costs. percent XX% in and given success investment Overall, for gross pleased

happy to expect gross areas stay invest We this to margin continue relatively in to are consistent. these and expect margin. we But with

at kind look top comparables comparable space, is you this SaaS the If the other in of with performers.

Scott Buck

one me. Last for

some that XXXX, that more there's in like growth about should to to extent annual an it of but going in How spend the terms we XXXX not was. Just rate? OpEx, on sounds be quite the investment think

Kelly Georgevich

can expect second and look similar of cash you numbers expect thinking year half to at down QX burn in you're half XXXX. of the the in the first the burn, and cash If go somewhat

Operator

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

David Moradi

Thank for you joining today. us

As our updating their always, I want look thank to and for employees, support. next our investors We call. partners to continued on you forward

Operator

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

now disconnect. may You

AudioEye (AEYE) 11 Mar 222021 Q4 Earnings call transcript