AudioEye Reports Fourth Quarter and Full Year 2018 Results
TUCSON, Ariz., March 27, 2019 /PRNewswire/ -- AudioEye, Inc. (NASDAQ: AEYE), a leader in cloud-based software-as-a-service (SaaS) digital accessibility technology solutions that expand website access for all individuals, including those with disabilities, while allowing companies to maintain conformance with ADA-related requirements, reported financial results for the fourth quarter and full year ended December 31, 2018.
Fourth Quarter and Recent Operational Highlights
-- Continued to grow its direct sales channel client roster in the fourth
quarter with prominent new customers from the fashion, retail,
hospitality and healthcare space among others.
-- Partnered with Dealer.com, within indirect sales channels, one of the
premier digital marketing solutions and platform providers for auto
dealerships with thousands of websites hosted on its platform.
-- Partnered with Simpleview, within indirect sales channels, a worldwide
leading provider of integrated destination marketing solutions.
-- Increased the sales and implementation teams to grow AudioEye market
share faster and to continue implementing its service solution for
customers in a timely manner.
Key Performance Indicators (KPIs)
-- Continued to fortify new indirect channel partner relationships.
Currently, 16 established channel partners offer AudioEye as their
exclusive digital accessibility solution to their clients.
-- Total customer count had grown to exceed 1,000 customers as of February
28, 2019.
Fourth Quarter 2018 Financial Results
-- Total revenues increased 103% to a record $1.78 million from $876,000 in
the same period a year-ago. The increase in revenues was primarily due
to continued execution in direct channel as well as steady growth in the
indirect channel.
-- Cash contract bookings increased 124% to a record $3.50 million from
$1.56 million in the same year-ago period. The increase in cash contract
bookings was primarily due to execution in contract closings in the
direct channel and securing a significant contract with a new indirect
channel partner.
-- Gross profit increased 94% to $1.04 million (58.2% of total revenues)
from $536,000 (61.2% of total revenues) in the same year-ago period. The
increase in gross profit was primarily due to the increase in revenues
previously described. The decrease in gross profit margin was primarily
due to increased payroll costs as the Company prepares for continued
growth and timely implementation.
-- Total operating expenses decreased 4% to $2.05 million from $2.14
million in the same year-ago period. The decrease in total operating
expenses was primarily due to a decrease in stock-based compensation
expense and increased efficiencies being realized as the Company
continues to scale its operations.
-- Net loss available to common stockholders improved to $1.44 million, or
$(0.19) per share, compared to $2.78 million, or $(0.53) per share, in
the same year-ago period. The improvement in net loss was primarily due
to the increase in revenues and decrease in total operating expenses
previously mentioned.
-- At quarter-end, the Company had $5.74 million in cash and cash
equivalents, compared to $1.96 million at December 31, 2017, and no
debt.
Full Year 2018 Financial Results
-- Total revenues increased 107% to $5.66 million from $2.74 million in
2017. The increase in revenues was primarily due to increased sales
volume, revenue renewal rate and recognition of deferred revenue as a
result of longer-term contracts.
-- Cash contract bookings increased 83% to $11.55 million from $6.31
million in 2017. The increase in cash contract bookings was primarily
due to execution of the sales and marketing plan, which nurtured a
growing sales pipeline throughout the year and resulted in a larger
number of closings and new customers.
-- Gross profit increased 124% to $3.03 million (53.6% of total revenues)
from $1.36 million (49.5% of total revenues) in 2017. The increase in
gross profit and gross profit margin was primarily due to the increase
in revenues previously described.
-- Total operating expenses increased 30% to $7.61 million from $5.87
million in 2017. The increase in total operating expenses was primarily
due to increased capital investment in key personnel and technology
enhancements.
-- Net loss available to common stockholders improved to $5.07 million, or
$(0.74) per share, compared to a net loss of $5.68 million, or $(1.21)
per share, in 2017. The improvement in net loss was primarily due to the
increase in revenues previously mentioned.
Full Year 2019 Financial Outlook
Management still expects to be within the range of its previously announced financial guidance for full year 2019. The Company expects revenues to range between $11.0 million and $13.0 million and cash contract bookings for the full year 2019 to range between $20.0 million and $22.0 million.
Management Commentary
AudioEye Executive Chairman Carr Bettis said, "With the fourth quarter's 103% increase in revenues as compared to Q4 2017, we've now realized record revenues for the past twelve consecutive quarters, which translates to three years of consistent growth and improvement. We are off to a good start this year and believe that the new investments we are making this quarter in our sales team, lead generation, marketing and public relations will enable AudioEye to leverage our competitive advantages and continue to improve both mindshare and market share going forward."
AudioEye CEO Todd Bankofier added: "2018 was a banner year for our organization as we continued to generate substantial growth through direct sales as well as our indirect channel partnerships. More specifically, we entered 2019 with nearly 1,000 total customers and a growing number of channel partners. Our current sales pipeline is now more than double where it was just a year ago. We also have new partners coming on board to sell our Ally Managed Service and have made enhancements in our technology to be able to implement our solution on more websites in a more timely and cost-efficient manner."
Conference Call
AudioEye management will hold a conference call today, March 27, 2019 at 4:30 p.m. Eastern time(1:30 p.m. Pacific time) to discuss these results.
AudioEye management will host the call, followed by a question and answer period.
U.S. dial-in number: (877) 407-9208
International number: (201) 493-6784
Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Liolios at (949) 574-3860.
The conference call will be broadcast live and available for replay here and via the investor relations section of the company's website after 7:30 p.m. Eastern time on the same day through April 3, 2019. A recording will remain available on the company's website for 90 days.
Toll-free replay number: (844) 512-2921
International replay number: (412) 317-6671
Replay ID: 13688235
About AudioEye, Inc.
AudioEye is a technology company serving businesses committed to providing equal access to their digital content. Through patented technology, subject matter expertise and proprietary processes, AudioEye is transforming how the world experiences digital content. Leading with technology, AudioEye identifies and resolves issues of accessibility and enhances the user experience, making digital content more accessible and more usable for more people.
AudioEye's common stock trades on the Nasdaq Capital Market under the symbol "AEYE." The Company maintains offices in Tucson, Scottsdale, Atlanta and Washington D.C. For more information about AudioEye and its online accessibility solutions, please visit www.audioeye.com.
Forward-Looking Statements
Any statements in this press release about AudioEye's expectations, beliefs, plans, objectives, prospects, financial condition, assumptions or future events or performance are not historical facts and are "forward-looking statements" as that term is defined under the federal securities laws. Forward-looking statements are often, but not always, made through the use of words or phrases such as "believe", "anticipate", "should", "intend", "plan", "will", "expects", "estimates", "projects", "positioned", "strategy", "outlook" and similar words. You should read the statements that contain these types of words carefully. Such forward-looking statements contained herein include, but are not limited to, statements regarding continued rapid expansion in 2019, revenues and cash contract bookings for the year ending December 31, 2019 and our business focus going forward. These statements are subject to a number of risks, uncertainties and other factors that could cause actual results to differ materially from what is expressed or implied in such forward-looking statements, including the variability of AudioEye's revenues and financial performance; risks associated with product development and technological changes; the acceptance of AudioEye's products in the marketplace by existing and potential future customers; competition; and general economic conditions. These and other risks are described more fully in AudioEye's filings with the Securities and Exchange Commission (the "SEC"), including AudioEye's Registration Statement on Form S-1 filed with the SEC on September 4, 2018 and its Quarterly Report on Form 10-Q for the quarter ended September 30, 2018. There may be events in the future that AudioEye is not able to predict accurately or over which AudioEye has no control. Forward-looking statements reflect management's view as of the date of this press release, and AudioEye urges you not to place undue reliance on these forward-looking statements. AudioEye does not undertake any obligation to update such forward-looking statements to reflect events or uncertainties after the date hereof.
About Key Operating Metrics
To supplement our financial information presented in accordance with generally accepted accounting principles in the United States (GAAP), we consider certain operating measures that are not prepared in accordance with GAAP, including monthly recurring revenues and cash contract bookings. AudioEye reviews a number of operating metrics such as these to evaluate its business, measure performance, identify trends, formulate business plans, and make strategic decisions. We believe these metrics and measures are useful to facilitate period-to-period comparisons of our business and to facilitate comparisons of our performance to that of other similar companies. In this press release, we are reporting results and/or affirming our previously announced guidance on cash contract bookings and monthly recurring revenues.
AudioEye's Cash Contract Bookings is the contracted amount of money the customer commits to spend with the Company over an agreed amount of time, generally ranging from 12 months up to 60 months.
AudioEye's Monthly Recurring Revenues is the Company's annualized spend of a customer divided by 12.
Corporate Contact:
AudioEye, Inc.
Todd Bankofier, Chief Executive Officer
tbankofier@audioeye.com
(520) 308-6140
Investor Contact:
Matt Glover or Tom Colton
AEYE@liolios.com
(949) 574-3860
-Financial Tables to Follow-
AUDIOEYE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
Three months ended December 31, Year ended December 31,
2018 2017 2018 2017
---
Revenues $1,781,875 $876,328 $5,660,427 $2,739,439
Cost of revenue 744,117 340,332 2,626,815 1,384,145
---
Gross profit 1,037,758 535,996 3,033,612 1,355,294
Operating expenses:
Selling and
marketing 649,520 440,293 2,462,865 1,421,127
Research and
development 46,540 42,630 194,429 181,303
General and
administrative 1,358,134 1,658,921 4,950,138 4,271,510
---
Total operating
expenses 2,054,194 2,141,844 7,607,432 5,873,940
Operating loss (1,016,436) (1,605,848) (4,573,820) (4,518,646)
Other income (expense):
Unrealized loss on
derivative
liabilities (286,882) (155,027)
Unrealized loss on
marketable
securities (210) (450) (240) (450)
Loss on settlement
of debt (267,812) (15,724) (267,812) (15,724)
Interest income
(expense), net (145,242) (860,233) (178,002) (917,992)
---
Total other
(expenses) income (413,264) (1,163,289) (446,054) (1,089,193)
Net loss (1,429,700) (2,769,137) (5,019,874) (5,607,839)
Dividends on Series
A convertible
preferred stock (13,233) (15,206) (53,740) (75,206)
---
Net loss available
to common
stockholders $(1,442,933) $(2,784,343) $(5,073,614) $(5,683,045)
===
Net loss per common
share-basic and
diluted $(0.19) $(0.53) $(0.74) $(1.21)
Weighted average
common shares
outstanding-basic
and diluted 7,531,035 5,294,063 6,892,238 4,693,437
===
AUDIOEYE, INC.
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2018 AND 2017
2018 2017
---
ASSETS
Current assets:
Cash $5,741,549 $1,960,430
Accounts receivable, net 172,384 105,817
Marketable securities, held in
related party 510 750
Deferred costs, short term 176,006
Prepaid expenses and other
current assets 49,901 67,406
---
Total current assets 6,140,350 2,134,403
Property and equipment, net 108,007 34,994
Deferred costs, long term 93,790
Intangible assets, net 2,061,404 2,164,463
Goodwill 700,528 700,528
---
Total assets $9,104,079 $5,034,388
===
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued
expenses $93,544 $82,628
Related party payables 14,467 23,535
Derivative liabilities - 2,984,010
Capital leases, short term 30,172
Deferred rent 4,472 9,402
Deferred revenue 2,626,712 1,233,754
---
Total current liabilities 2,769,367 4,333,329
Long term liabilities:
Capital leases, long term 51,150
Deferred rent 6,585 5,048
Deferred revenue 402,075
---
Total liabilities 3,229,177 4,338,377
Stockholders' equity:
Preferred stock, $0.00001 par value, 10,000,000 shares
authorized
Series A Convertible Preferred
stock, $0.00001 par value,
200,000 shares designated,
105,000 and 110,000 shares
issued and outstanding as of
December 31, 2018 and 2017,
respectively 1 1
Common stock, $0.00001 par
value, 50,000,000 shares
authorized, 7,579,995 and
6,467,066 shares issued and
outstanding as of December 31,
2018 and 2017 respectively 76 65
Additional paid-in capital 48,017,926 40,121,845
Accumulated deficit (42,143,101) (39,425,900)
---
Total stockholders' equity 5,874,902 696,011
---
Total liabilities and
stockholders' equity $9,104,079 $5,034,388
===
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SOURCE AudioEye, Inc.
