AEYE - Earnings call transcript Q3 2024

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Operator

Good afternoon, and welcome to AudioEye's Third Quarter 2024 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. I would like to remind everyone that this call will be recorded and made available for replay via a link available in the Investor Relations section of the company's website at www.audioeye.com.

the call like AudioEye's that historical to by management the the Executive statements facts turn conference AudioEye would this be company remind during are I considered over are forward-looking Chief to Officer, made call to Before that of statements. not course all participants such Securities Litigation XXXX The statements. Act Private provides a forward-looking of Reform safe harbor for anticipate, similar statements. expect, believe, estimate, statements expectation words will other confident The and forward-looking of identify and statements other are about events statements and are or These expectations that projections based are assumptions uncertainties. current subject future on predictions, and risk and to

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

-- in otherwise Further, website its available measures. GAAP or the available Relations most financial in www.audioeye.com. certain financial non-GAAP release management's directly the Investor earnings posted measures non-GAAP today is include A section remarks and at measures comparable will company's financial reconciliation of the and of these

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

David Moradi

Thank you, operator.

our adjusted guidance the in our EBITDA high from the July We end third quarter. strong beat with We performance are guidance. and achieved revenue of pleased

quarter time. quarter from rate margin $X.XX an of third the XX second growth exceeded Sequential to annualized representing quarter. in second $X.XX in of from the first XX% also million EBITDA improved XX%. million to sequentially, the XX% We quarter, in in the revenues third the the for grew Rule Adjusted

grew reduced year-over-year, revenue XX%. while expenses by quarter we Third XX% non-GAAP operating

flow. cash free adjusted at Looking

CapEx, million in In a second $XXX,XXX quarter the EBITDA year. $X.X generated $X last million negative quarter compared in and of terms minus third record the of quarter the we in to

see Marketplace channels Enterprise around annualized. in will our Strong year to channels. sequentially continue momentum us our impressive Both or and X% guidance, grew to I Partner full and We business which organically, is leading discuss shortly. increase performance XX%

quarter. will I cover notable a now developments the few other in

the penetrate schools. now. we market implemented expanded discussed is goal on Finalsite, to earnings plan, which call, The with partnership As our all our comprehensive years in leader installed recently their base being last K-XX the is with share over a go-to-market X next

partnership strategies over to the a will During the technology local the provide government expansion quarter, best-in-class The base of the enhanced customers, next market. is in we public industry. customer with include platform over SaaS our penetrate goal most partnership XX,XXX leader their with go-to-market government significant of in entire our to penetrate years. to anyone announced digital X The a CivicPlus, solutions sector the accessibility

over and substantial X Finalsite that and with working generate CivicPlus these of history long a partnerships the have will revenue We expect years. next

compliance where best list solution, have expand practices. positive ADA providing barriers an customer Next, relationships accessibility. completed client mission we audits Compliance of This products is They Site impressive end acquisition the and a Site the to can I'd discuss ongoing the is acquisition further. our eradicating leverage all third of like of to at accretive another quarter. digital to in Compliance ADA accessibility step our website

immediately accretive. We This attractive are also profile. Compliance excited about financial ADA is Site acquisition

of Compliance recurring. Site its with top revenue generated of revenue around XXXX, million terms being of $X in approximately In ADA line, XX%

over move months. the to already our our platform departments into their on employees next have integrated plan few and their to We customers

reason acquiring and Site the new our is AudioEye we Compliance to warm a One strong product offering, team. want welcome key extend and depth knowledgeable Site of in most ADA which members. the is to with comprehensive industry. to these breadth us gained By ADA Compliance, a I wanted combine

launch will today, we Earlier legacy a picture innovation our of Accessibility pioneers Status Customers our we fix each digital with details gives automation customer's Protection and of giving transparent level receive These assessments, understand announced reporting The of risk comprehensive protection. as the Accessibility profile. Protection their on builds of This Status. experts features in accessibility. transparent will what utilizing help AI. customers clients legal risk

and give accessibility a score use an creates of what score XXX% Also, protection analyze and the and vendor of detect will does accessibility than only who is vendor. to which risk, experts. automation-only can traditional a industry of accessibility with competitors. Customers false automation give from customers only with sense greater accessibility to a varies not full arbitrary platform risk, issues consulting your the in level many vendors products An more and high-risk score you to Most up gain picture security. detected be significantly XXX% as can than AudioEye's implement

third Kit in developers or the our way option resources of the to another The Testing cycle. testing yet source. issues pre-production life solve issues to customers This the helps to at Accessibility time they quarter, provides we SDK. issues. The development flexible accessibility offers SDK support in Software SDK digital software have In a to are accessibility announced different environments. These meet general of types fix the accessibility wherever early developers availability address and

AudioEye's data for its other HHS the These Type protection During health sector, care security the quarter, SOC achieved be that measures stringent milestones particularly by customers, and impacted HIPAA will II also industries we data which have certification. to confidentiality requirements. under we with protection, announced X strengthening reaffirm dedication those in regulations ongoing and compliance and

Moving on to guidance.

for the increase quarter We significant without expense. revenue to additional expect fourth

quarter, between growth. million For $X.X fourth guiding XX% the are representing million, $X.X year-over-year we revenues and

revenues million between $XX.X expect and we $XX.X XXXX, year full the million. For

between adjusted representing million, and $X.X quarter margin. We a the EBITDA million $X.X increasing XX% our are guidance to fourth for

also The the $X.XX. the Rule between call updated We million EBITDA the with year quarter at $X.XX for implies are AudioEye's our increasing million, adjusted I'll to over turn XXXX $X.XX of Kelly. midpoint. CFO, full now forecast $X.XX to to adjusted to XX EPS fourth

Kelly Georgevich

Thank you, David.

levels comparable XXth XXXX growth hit discussed, As $X.X to XX% revenue again David record prior growth annualized of with million, quarter and at revenue. record XX% the rate QX revenue marking which year, rate translates over a of our period

by at contributions Site and the the Annual reseller recurring ADA ARR $X.X Compliance. of a significant XXXX $XX.X revenue, of increase driven the ARR, million, acquisition million of third quarter was was end sequentially, both Enterprise which and from increase a or

revenue generate annualized results, both X to in channels continuing with are channels. Our high rates strong sequential growth

revenue Marketplace The same record-setting ARR growth with from our variety channel who revenue deploy marketplace these products a SMB-focused from Partner for and and of had products approximately their SMB partners includes customers near In XX% $X all in This QX. around third XXXX, revenue of revenue of increase XX% sequential of ARR or million this XX% of XX% channel X% grew annualized. the channel ARR. quarter and represents and sequentially and year-over-year

AudioEye's personnel the XX% and websites, annualized. with XX% ARR. The organically or generally customers channel Enterprise channel solutions. around XX% who our quarter, pricing year-over-year organizations, sales for the In around non-platform of those including with revenue and grew Enterprise channels and AudioEye third of engage X% directly Enterprise larger and contributed consist sequentially of XX%

Partner count from our by Marketplace customers increase from XX% approximately and customer XXXX, and September XXXX, September count and was on XXXX. the XXX,XXX X,XXX June driven approximately of increase in in XX, both On XXX,XXX, additions customers customer XX, channel. increase an an Enterprise XX, The was

increases expenses $X.X On GAAP marginal the gross with in year-over-year. million Gross of a in approximately and revenue of margin and in sold compared of approximately goods million, of QX $X.X driven only X% items, of $X.X expenses nonrecurring million year. year-over-year picked saw over X% higher up to same to and business cost these increased revenue, growth to profit combination by $XXX,XXX Outside last The sequentially operating increase approximately to of result decreases XX% basis, $X.X of margin expenses. a was of year-over-year gross million we period. X%

in XXXX statement. spend was from approximately reflecting section $X.X $X.X in investing Our million, XXXX. approximately about total XX% XX% quarter software year quarter of XXXX. period is R&D of the was in The in This the R&D of spend the versus the prior of our down total QX revenue this comparable million flow and cash development second QX cost XX% $XXX,XXX with the in

current believe We continue that appropriate. investment in to R&D is

and by to sales year and ago business nonrecurring XXXX net a in in gross million R&D, period. the loss additional compared Net litigation per loss or by profit driven was $X.XX per The third $X.X of or $X.X offset and marketing, in decrease share same combination in was revenue expense. efficiencies the increases share $X.XX quarter and million of

EPS per million EBITDA primary to and $X compensation, ADA costs noncash QX Our million associated year-over-year. improvement business record Compliance, earnings of share-based QX or $X.X Site adjusted litigation acquisition interest was $X.XX and expense. depreciation, XXXX expense combination a for The were the a with adjustments share, amortization, GAAP

activities be to offset by XX, from $XXX,XXX at-the-market ADA Cash $X.X Compliance. $X.X million well as $X.X of of by proceeds the Site with increased the capitalized operating offering payment continues XXXX. net sheet cash provided balance by and quarter, our cash September in million million, Our acquisition of for approximately of driven around

EBITDA $X.X development with million the calculated flow software of quarter. cash Free in was million adjusted third as $X $XXX,XXX costs of

this see X, increase share to raising fourth at continue of November average $XX.XX. we an in to the cash $X On the We completed of million expect offering, at-the-market quarter. price

call please that, open the With up instructions. give for Operator, we questions.

Operator

first Our Instructions] Sutton, George [Operator comes question from Craig-Hallum.

George Sutton

guys. results, Nice

curious resellers and to that assumption? just I'm them we're correctly. I simply their a that just touching I'm to penetrate Finalsite talking. is hearing and sure giving make period, So then when about can I the significant to talk want being buy? CivicPlus customers over X-year practical fully ability a David, Or want how see Is you just both that you

David Moradi

penetration product, of be very of their significant. of all of the We think would the so it mean, would buying I dollars be changes Full it face company. additional. tens millions the customers it's

George Sutton

Okay.

past given year. to new that to less to confirm regulatory are I I register, what I just XX in believe pressured would those? are the there just things We have change hours you coming talk But is next be regulatory so. wanted I'm we're driving think finding a in curious, And they're expect if so a don't going that. out I to administration any can our about environment, the changes,

David Moradi

so. II I with or rolled HHS be the Title think I rule don't We've concerned not can back, so don't for it. think analyzed that.

George Sutton

and Okay. being audit Or you're how opportunities? us is offerings. then going go-to-market business, software those of an you how Can the combination? When somewhat question. curious X cross-sell market separately explain have historically that's to finding I a being to you business, separate question working. been still a just ADA think Last you going are with Just

David Moradi

Yes.

think services. a AudioEye match it's customers base. opportunity with customer up-sell products to I good an and to migrate our and their see We

We going customers the with integration. expect We've over moved employees over few quickly to pretty their our next in the move this departments to months. are and

Operator

question Partners. comes Capital Richard ROTH from next Our Baldry,

Richard Baldry

you because does got domain and it your are you as and more acquisition internal view that the about when how Or people keep do at we more sort slow we expertise OpEx? out own in you do look get the they've we How those first, hiring you some X overlapping When of can do think think work? of it synergies ahead? you from can view integrated

David Moradi

We the to Bureau the like think from with that did We by bought grew grow about it. we we're Yes. XXXX. revenue going back XX% in base where we

a So And next it's continue the be we similar years. will and accretive. opportunity there X to X, accretive X there's over day from think

Richard Baldry

if toughest to adding determined traction your -- meaningful Great. it it the they implementation to view grow think that of do were Then that? ability basis, was a that challenges to off? side, integration to to customer's of of What you adoption do sort heads ability scaling you is? these point how the your by with near-term sort on if gain Is customer ability about think respond quickly the what for partnerships, of your do some take sort when you teams? more sort to each on on Is of work of

David Moradi

way the think I with on do and AI scalable. automation. highly I foresee things implementation, it's don't any problems we

so see account handle don't selling the management, the I side. handle doing We can So and that. it. They're implementation we can

Richard Baldry

me. for Last

ability try do you go-to-market any now sort of Rule sort have have that business? back and do think to -- EBITDA X the you you of of now. You're think and of Or an more over to time? the still time it take number into of sort Do it grow of sort you the line? continue exceeding it's to push the think upside part balance is right the you XX important scale to to Or

David Moradi

on I think them margin. we future, there's in the can scale so both EBITDA more grow

and can it or revenue in push generate think side. I XXs up potentially XXs the on we over time, the could

Operator

Securities. Instructions] Our B. question Riley [Operator next Zach Cummins, comes from

Zach Cummins

was inbound of David, mandates in you've curious demand I if getting with XXXX. for accessibility Europe upcoming of June sort the started any in

David Moradi

a people more yet, to more aware but I'm more leads few not that on. more months go converting deals We're seeing seeing quite as and in. coming monitoring. of calls and are it the I'm in the They're

Zach Cummins

hitting my And is really follow-up see the gross it. this to one XX% quarter. margin on of Nice it Understood. side the mark

we expansion should the side? forward of we progression forward. about that think as Just for there moving that on curious Is room still go how

Kelly Georgevich

Yes.

We see It's up efficiencies, tick mix in to of been efficient revenue about pleased well. feel about it have sequentially. that going as good that going product and forward we're think but And all and be we able both to the cost scale and XX% see year-over-year I we forward. revenue.

Operator

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

David Moradi

Thanks, call. joining the and us, you will next everybody, we see for on

Operator

Third Conference for for Before like Thank available us Earnings we conclude of be today's recording will a to XXXX Call. today's everyone section website. replay -- remind in for of today a available call, Investors the I the you link call would joining for AudioEye's via Quarter that

disconnect. may now You

AudioEye (AEYE) 7 Nov 242024 Q3 Earnings call transcript