AEYE

Image source: The Motley Fool. Thursday, Aug. 13, 2026, at 4:30 p.m. ET Chief Executive Officer-Kelly Georgevich Chief Financial Officer-Matthew Domeyer Operator: Good afternoon and welcome to AudioEye's Second Quarter 26 Earnings Conference Call. Joining us for today's call are AudioEye's Chief Executive Officer Ms. Kelly Georgevich and Chief Financial Officer, Mr. Matthew Domeyer. 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 site at www.audioeye.com. Before I turn the call over to AudioEye's CEO, the company would like to remind all participants that statements made by AudioEye management during the course of this conference call that are not historical facts are considered to be forward looking statements. The Private Securities Litigation Reform Act of 2000 provides a Safe Harbor for such forward looking statements. Words believe, expect, anticipate, estimate, confident, will, and other similar statements of expectation identify forward looking statements. These statements are predictions, projections and other statements about future events and are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could differ materially because of factors discussed in today's press release. Comments made during the conference call and in the Risk Factors section of the company's annual report on Form 10 its quarterly reports on Form 10 Q, and its other reports and filings with the Securities and Exchange Commission. Participants on this call are cautioned not to place undue reliance on these forward looking statements which reflect management's beliefs only as of the date hereof. AudioEye does not undertake any duty to update or correct any forward looking statements. Further, management's remarks today will include certain non GAAP financial measures. A reconciliation of the most directly comparable GAAP financial measures to these non GAAP financial measures is available in the company's earnings release or otherwise posted in the Investor Relations section of its website at www.audioeye.com. Now I would like to turn the call over to AudioEye's CEO, Ms. Kelly Georgevich. Kelly Georgevich: Thank you, operator, and good afternoon, everyone. Q2 marked our 42nd consecutive quarter of sequential revenue growth, and we are excited about the continued momentum throughout the business. Revenue came in at $10.7 million and ARR grew $1.1 million sequentially to $42.3 million. This reflects low double digit year over year ARR growth. Adjusted EBITDA and free cash flow have reached a pivotal point, and we are raising our full year adjusted EBITDA guidance. Adjusted EBITDA has grown at a CAGR of 42% over the last 2 years and we now expect to achieve over $15 million run rate adjusted EBITDA in the fourth quarter of 2026. We also expect meaningful free cash flow generation in the second half of 2026 as we expect litigation expense to trend down. We are currently evaluating options to deploy excess cash including potential share buybacks and dividends. In the second quarter, adjusted EBITDA reached $3 million, representing 28% adjusted EBITDA margin over $600 thousand higher than Q1 26 and $1.1 million higher than Q2 25 representing 54% increase from the prior year quarter. As ARR scales, a growing share of incremental revenue is flowing to the bottom line. We expect that trend to continue and accelerate in the second half of 2026. We have proven that our operating model is highly scalable and expect continued growth of cash flow in 2027 and beyond. The Internet continues to be highly inaccessible, and we believe it is becoming more inaccessible as AI coding becomes more prevalent. LLMs were not built with accessibility in mind which is contributing to the problem. WebAIM's latest study found that 95.9% of top homepages had detectable WCAG failures averaging 56.1 errors per page up 10% year-over-year, the first increase after 6 years of steady improvement. WebAIM points to third party frameworks and AI assistant code as key drivers. In June, we released the third annual digital accessibility index covering more than 165 thousand pages across 6.1 thousand domains in The U. S. And Europe. 2 findings stood out most in this report. First, many organizations focus their accessibility efforts primarily on the homepage and typical user flows but interior pages now carry more risk. They average 10% more issues than homepages and accounted for roughly 60% of accessibility claims filed last year. As the use of LLMs increasingly exposes pages that have not been prioritized for accessibility, contributing to increased litigation. Second, despite the European Accessibility Act, having been in place for over a year, EU websites on average still carry roughly 25% more accessibility issues per page than comparable US sites. A gap I will discuss in more detail when I walk through where EAA enforcement stands. Both findings point to the same thing. The risk is living where most companies are not focused. In web pages with less traffic, across the whole region still catching up with the new law. that is where our solution is built to scale. AudioEye's automation signs and fixes far more issues than any other solution on the market automatically in real time across every page a customer has. Our custom fixes handle the majority of remaining issues in a scalable, cost effective way. The 25% accessibility gap between EU and U. S. Sites I just mentioned aligns with current state of EAA enforcement. The European Accessibility Act is beginning to shift from a compliance deadline to active enforcement, we still call it early innings, not yet an inflection point. Sweden and The Netherlands both began market surveillance and reporting requirements in late 2025 and escalated those efforts throughout this year. Germany has seen a wave of warning letters targeting non compliant e commerce operators. Most notably, French courts issued a ruling in June against the major retailer rejecting the argument that partial compliance in that case roughly 71% conformance satisfies the law. The court held that digital accessibility is an obligation of results meaning sites must be fully accessible not mostly accessible and ordered full remediation within 6 months. Under the threat of daily penalties. These cases are important signals of future enforcement. We are seeing early EU momentum building with Q2 marking our strongest EU contribution to ARR growth to date. We continue to take a strategic multichannel approach in the EU, positioning ourselves to capitalize on the inflection point. When it arrives. Now turning to guidance. For the third quarter of 2026, we expect revenue between $10.85 million and $11.05 million, a sequential quarterly increase of approximately $235 thousand at the midpoint. We expect further acceleration of sequential revenues in Q4. For the full year 2026, we are maintaining the midpoint of our revenue guidance. While tightening the range to between $43.5 million and $44 million. For the third quarter of 2026, we expect adjusted EBITDA between $3.4 million and $3.6 million representing an adjusted EBITDA margin of approximately 32% at the midpoint. And adjusted EPS of between $0.26 and $0.28 per share. For the full year 2026, we are increasing adjusted EBITDA guidance from at least $12 million to $12.7 million. This represents a 29% adjusted EBITDA margin at the mid point of revenue guidance. And 40% year-over-year growth. We also expect adjusted EPS of at least $0.98 for 2026 and a run rate adjusted EBITDA of over $15 million by the end of 2026. We expect cash flow to ramp significantly. In the third quarter, at the midpoint of guidance and adjusted EBITDA of $3.5 million plus around $400 thousand of software development costs implies $3.1 million of adjusted free cash flow. We expect adjusted free cash flow to accelerate further in Q4. Additionally, we expect litigation expense to come down in the second half resulting in substantial cash generation. Lastly, I want to formally welcome Matthew Domeyer, who joined us as CFO in July. Matthew brings nearly 20 years of finance experience including public company and operational finance background making him a strong partner as we scale. I am looking forward to working closely with him in this next phase of growth. With that, I will hand it over to Matthew to cover our financial results in more detail. Matthew Domeyer: Thank you, Kelly. Revenue for the second quarter of 2026 was $10.7 million representing a 9% increase from the comparable prior year quarter. As Kelly mentioned, this marks our 42nd consecutive period of record revenue. Annual recurring revenue was $42.3 million as of 6/30/2026, up from $41.2 million as of 3/31/2026. reflecting 11% annualized sequential ARR growth. ARR also grew 11% compared to the prior year comparable period. We continue to expect ARR growth in future quarters and that the compounding impact of sequential ARR growth will generate notable growth rates in revenue in the third and fourth quarters of this year. As of June 30, 2026, AudioEye had approximately 129 thousand customers. up 9 thousand from 6/30/2025. The increase is primarily in our partner and marketplace channel driven by further expansion with existing partners. Going deeper into revenue by our 2 channels, AudioEye's enterprise channel consists of our large customers and organizations, including those with non platform custom websites, who generally engage directly with AudioEye sales personnel for pricing and solutions. In Q2 2026, enterprise revenue was flat year over year with lower nonrecurring revenue offset by increased recurring revenue. Enterprise ARR grew 5% over the comparable period of the prior year and sequential annualized enterprise ARR growth was 17%. As of 06/30/2026, enterprise ARR represented approximately 41% of total ARR. Our partner and marketplace channel includes all revenue from our SMB focused marketplace products, as well as from partners who deploy these products for their SMB customers. In the second quarter of 2026, partner and marketplace channel revenue grew 16% year-over-year and contributed meaningfully to ARR growth in the quarter. As of 06/30/2026, our partner and marketplace channel accounted for approximately 59% of ARR. We continue to see solid expansion from our state and local government partners specifically in the second quarter of 2026. Gross profit for the second quarter was $8.4 million or approximately 79% of revenue. Compared to $7.6 million or 77% of revenue in Q2 of 2025. Adjusted gross margin defined as gross margin adjusted for non cash items in our cost of revenue such as amortization of capitalized software development costs and stock compensation expense was 84% in Q2 2026. Compared to 83% in the prior year comparable period. In the second quarter of 2026, operating expenses were $9 million compared to $7.4 million in Q2 2025. The year over year increase in total operating expenses was primarily due to a $1.4 million benefit from the revaluation of contingent consideration in the prior year's comparable quarter did not recur in the current period. Our total R&D spend in Q2 was approximately $1.2 million, includes approximately $400 thousand capitalized as software development costs and recorded in the investing section of the cash flow statement. Total R&D spend was around 12% of Q2 2026 revenue, down from 17% in Q2 2025 primarily due to reduced headcount resulting from efficiencies realized through the implementation of AI tools and automation. Net loss in the second quarter of 2026 was $900 thousand or $0.07 per share, compared to breakeven or $0.00 per share in the same year ago period. Excluding the impact of the $1.4 million revaluation of contingent consideration in the comparable period of the prior year, net loss improved mainly due to higher gross profit. In the second quarter of 2026, we achieved adjusted EBITDA of approximately $3 million or $0.23 per share and an adjusted EBITDA margin of 28%. This compares to Q2 2025 adjusted EBITDA of $1.9 million or $0.15 per share and 20% adjusted EBITDA margin. The $1.1 million increase in adjusted EBITDA over the comparable period of the prior year was primarily driven by an increase in gross profit. In the second quarter, we generated $2.6 million of adjusted free cash flow, calculated as adjusted EBITDA of $3 million, less $400 thousand of software development costs. Improvement of $1.2 million from the second quarter of 2025. Turning to the balance sheet, we ended the quarter with $8.7 million in cash and $3 million available under our revolving line of credit. As of 06/30/2026, our net debt defined as total debt less cash was $8.1 million and our net debt to adjusted EBITDA ratio using our 2026 adjusted EBITDA guidance is approximately 0.6x. With that, I will turn the call back to the operator to open the line for questions. Operator? Operator: Thank you. We will now take questions from the company's publishing analysts. At this time, And your first question comes from Joshua Reilly with Needham and Company. Please state your question. Joshua Reilly: All right, great. Thanks for taking my questions. Nice job on the quarter here. So if you look at these warning letters that are now being sent out in Europe, how do you think about potentially accelerating sales investments there? In that region? And how quickly can you scale up sales support there if demand really takes off over the next few quarters? And does it make sense to maybe add additional sales partnerships in Europe? Kelly Georgevich: Yeah, we are definitely watching it closely and keep an eye on our countries and developments. We are being strategic in investments in the EU. We do have, resources in the EU and are investing in a multichannel approach. So I think we are ready when, you know, we have said it is you know, we still view it as early innings, but at some point, it will hit an inflection point, and we are ready to capitalize on that and making inroads now to do that. Joshua Reilly: Got it. And then I guess, a couple of items on AI. You know, first of all, what are you seeing I guess, on in the direct channel with the larger customers in terms of their willingness to spend given, you know, the AI driven concern software spend environment right now. And then along with the AI angle, second part to the question is, how are you doing in terms of implementing AI internally for R&D and customer service? And how is that efficiency trending there relative to your expectations? Kelly Georgevich: Yep. Good questions. Right now, we are not seeing any notable impacts besides adding more value to customers on the AI front. As we mentioned previously, AI coding tools are trained on the Internet that is not built with accessibility. So we are not seeing in any impact from competitors coming in. 1 of the unique things about us is that we have the best automation in the industry, the audience has our automation of 89% to 300% more than competitors. And we have also taken that unique approach to accessibility of custom fixes and no 1 has that proprietary dataset. I would also say, you know, I think the other thing to keep in mind is that we are do provide litigation protection at the end of the day. So on an enterprise customer front, they see us as, protected and it is not something that they see as an opportunity on the cost cutting front. On your second point, where really everything we are doing is starting with the proprietary data that we have. You know, we have millions of human reviews and billions of real-world fixes, and no 1 else has that data. And so we are using it currently to make reporting easier for clients to understand, to make fixes easier, to make sure works seamlessly with our dev for people who are in dev environment and want to make source fixes, but we are also making sure we utilize that proprietary data in new and exciting ways. I think more to come on that front in the next handful of months. Joshua Reilly: Got it. 1 last question for me is on the, partner versus direct channel revenue growth rate. I believe you mentioned that was a couple of moving parts on the direct side there. Could you just in terms of the year over year revenue growth, could you just give a little more color on what you saw in terms of the year over year growth rate between partner and direct channels? Thank you, guys. Kelly Georgevich: Yep. Thanks. Yeah. On the-- if you look at your revenue year over year, the direct revenue year over year growth was impacted by and we have mentioned this before that shift from non recurring revenues to recurring revenue. If you look at ARR growth in enterprise, it was pretty notable, both sequentially and year over year. And we really think you should focus on that ARR growth is where to look there. And on the partner marketplace side, we continue to see good results from our existing partners and continue to see that expand. So good growth on both the revenue side and the ARR side in that channel. Joshua Reilly: Awesome. Thank you, guys. Operator: Your next question comes from George Sutton with Craig Hallum. Please state your question. George Sutton: Thank you. And I would like to welcome Matthew to the call. Kelly Georgevich: So, Kelly, I am particularly enthused to see the partner strengths in front of the mandates actually going into effect. Can you just give us a little picture on sort of focus? And I know you have got a couple key partners, but and I know they have had specific salespeople dedicated to this. I assume they are seeing some impact as a result? We are seeing all systems go on the partner side, and we know that the date was pushed back to 2027, but we are seeing still really good results from those partners. And I think everyone's now just all eyes on 2027. And further penetration into their customer base before that deadline. George Sutton: So just on the cash deployment theme. Obviously, M&A has been 1 area that you have been at least looking for a while. I know some of the challenges have been prices, expected by the sellers. Where do things stand on the M&A side as you are thinking of cash deployment? Kelly Georgevich: Yeah. As I mentioned, we do expect to generate significant free cash flow as we go into second half of the year and into 2027, and that just opens up a number of different possibilities, and M&A would be 1 of those. We always are kind of evaluating M&A. it is got to be the right fit. it is got to be at the right price, but I do think it could be an opportunity for the future. George Sutton: Alright. that is it for me. Thank you. Kelly Georgevich: Thanks, George. Operator: Thank you. And your next question comes from Zachary Cummins with B. Riley. Securities. Please state your question. Eric Suppiger: Yes. Thanks and congrats on a good quarter. On the AI features that you have been adding, to your-- are you seeing-- is there opportunity for that to drive pricing higher And conversely, are you-- how difficult will it be for large language models or for coding for AI coding to develop accessibility capabilities. I understand you have proprietary data for that. But are there are they able to chip away at that? Kelly Georgevich: Yep. I will answer that-- the first question first. Yeah, I think with AI capabilities, there is opportunity to introduce supplemental products. And so over time, I think as an ASP per customer, it could grow up because of that. But I think big opportunities ahead in general. We have commented on this a bit, but as I-- and I might have already said this in the comments, but WebAIM supports it that websites are just getting more accessible. LLMs were not trained on accessible websites, so they are actually creating more inaccessible sites. And the thing that makes us really unique that no 1 else has is our proprietary dataset. So we have been doing human fixes, for 10 years, and no 1's been doing that. And all of that data really lends itself to building out something really interesting in the AI space that LLMs or other competitors do not have access to in terms of data. Okay. Eric Suppiger: And then lastly, on litigation, can we assume that is going to stay at lowered levels for the foreseeable future? Or what are your thoughts in terms of that Yeah. Kelly Georgevich: As I mentioned, Q2 was about 40% or came down 40% from Q1. We do expect it to ramp down the second half of 2026. We cannot comment any further on active litigation, but I think you can expect a significant additional cash generation with litigation trending down in second half of 2026? Eric Suppiger: Very good. Thank you. Operator: Thank you. At this time, this concludes our question and answer session. I would now like to turn the call back over to Ms. Kelly Georgevich for her closing remarks. Kelly Georgevich: I would like to thank our employees, customers and investors for their support. Look forward to providing an update on the next quarter. Thank you. Operator: Before we conclude today's call, I would like to remind everyone that a recording of today's call will be available for replay via a link available in the Investor Relations section of the company's website. Thank you for joining us today for AudioEye's second quarter 2026 Earnings Conference Call. May now disconnect. Before you buy stock in AudioEye, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and AudioEye wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. 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As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. AudioEye (AEYE) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Achieved 42nd consecutive quarter of sequential revenue growth, driven by the increasing inaccessibility of the internet as AI-assisted coding introduces more detectable WCAG failures. Management attributes the 10% year-over-year increase in web errors to LLMs being trained on inaccessible code, creating a growing demand for AudioEye's automated remediation. Strategic focus has shifted toward interior web pages, which now average 10% more issues than homepages and accounted for approximately 60% of accessibility claims last year. The European market is transitioning from a compliance deadline to active enforcement, evidenced by recent French court rulings requiring full rather than partial conformance. Operating model scalability is demonstrated by a 54% year-over-year increase in adjusted EBITDA, as incremental revenue increasingly flows to the bottom line. Enterprise ARR growth of 17% sequentially reflects a successful transition from non-recurring project revenue to high-margin recurring subscription models. Management expects to achieve a run-rate adjusted EBITDA of over $15 million by the fourth quarter of 2026, supported by continued margin expansion. Free cash flow is projected to ramp significantly in the second half of 2026, primarily due to the expected downward trend in litigation expenses. The company is evaluating options for excess cash deployment, including potential share buybacks, dividends, and strategic M&A that fits their price and integration criteria. Revenue guidance for Q3 2026 assumes a sequential increase of approximately $235 thousand at the midpoint, with further acceleration anticipated in Q4. Management anticipates an 'inflection point' in European demand as market surveillance and reporting requirements escalate in Sweden, the Netherlands, and Germany. Litigation expenses, while trending down by 40% from Q1 to Q2, remain a key variable for cash flow generation in the second half of the year. R&D spending as a percentage of revenue decreased from 17% to 12% year-over-year, driven by headcount efficiencies realized through internal AI tools and automation. Net loss comparisons were impacted by a $1.4 million non-recurring benefit from the revaluation of contingent consideration in the prior year period. The European Accessibility Act (EAA) gap persists, with EU websites carrying roughly 25% more accessibility issues per page than U.S. sites, representing a significant market opportunity. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management is maintaining a strategic multichannel approach and currently has resources in the EU to prepare for a looming inflection point in enforcement. While currently in 'early innings,' the company is ready to scale sales support quickly as demand for compliance solutions increases across the region. Management stated that AI coding tools are actually increasing the problem of inaccessibility, as they are trained on non-compliant internet data. AudioEye's proprietary dataset of millions of human reviews and billions of real-world fixes provides a competitive moat that LLMs cannot easily replicate. Internal use of AI is currently focused on making reporting easier for clients and streamlining fixes for developers. Management confirmed litigation costs decreased 40% sequentially and are expected to continue ramping down in the second half of 2026. The reduction in these legal costs is the primary driver for the projected 'substantial' cash generation in upcoming quarters.

This article first appeared on GuruFocus. Revenue: $10.7 million in Q2 2026, a 9% increase year-over-year. Annual Recurring Revenue (ARR): $42.3 million as of June 30, 2026, up $1.1 million sequentially and 11% year-over-year. Adjusted EBITDA: Record $3.0 million in Q2 2026, representing a 28% margin, up 54% from the prior year quarter. Adjusted Free Cash Flow: $2.6 million in Q2 2026, an improvement of $1.2 million from Q2 2025. Gross Profit: $8.4 million in Q2 2026, or approximately 79% of revenue, compared to $7.6 million (77%) in Q2 2025. Adjusted Gross Margin: 84% in Q2 2026, up from 83% in the prior year period. Net Loss: $0.9 million, or $0.07 per share, in Q2 2026, compared to breakeven in Q2 2025. Customer Count: Approximately 129,000 customers as of June 30, 2026, up 9,000 from June 30, 2025. Enterprise Channel Revenue: Flat year-over-year in Q2 2026, with enterprise ARR growing 5% year-over-year and 17% sequentially annualized. Partner and Marketplace Channel Revenue: Grew 16% year-over-year in Q2 2026. Full-Year 2026 Revenue Guidance: Maintained midpoint, tightened range to between $43.5 million and $44.0 million. Full-Year 2026 Adjusted EBITDA Guidance: Raised from at least $12 million to at least $12.7 million. Warning! GuruFocus has detected 4 Warning Signs with AEYE. Is AEYE fairly valued? Test your thesis with our free DCF calculator. Release Date: August 13, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. AudioEye Inc (NASDAQ:AEYE) reported its 42nd consecutive quarter of sequential revenue growth, with Q2 2026 revenue reaching $10.7 million, a 9% year-over-year increase. Adjusted EBITDA hit a record $3 million in Q2 2026, representing a 28% margin, up 54% from the prior year quarter, and the company raised its full-year adjusted EBITDA guidance to at least $12.7 million. The company expects significant free cash flow generation in the second half of 2026 as litigation expenses trend down, and is evaluating options to deploy excess cash, including potential share buybacks and dividends. AudioEye Inc (NASDAQ:AEYE) is well-positioned to capitalize on the European Accessibility Act enforcement, with Q2 2026 marking its strongest EU contribution to ARR growth to date. The company's proprietary data set, built from 10 years of human fixes and billions of real-world fixes, provides a competitive advantage in AI-driven accessibility solutions, with automation that fixes 89% to 300% more issues than competitors. Enterprise revenue was flat year-over-year in Q2 2026, impacted by lower nonrecurring revenue, though recurring revenue increased. The company reported a net loss of $0.9 million in Q2 2026, compared to breakeven in the prior year period, partly due to a non-recurring $1.4 million benefit from contingent consideration revaluation in Q2 2025. The European Accessibility Act enforcement is still in early innings, with no clear inflection point yet, which could delay expected revenue growth from the region. The increasing prevalence of AI coding tools is contributing to more inaccessible websites, as LLMs are not built with accessibility in mind, potentially increasing the complexity and cost of remediation for customers. The company's total operating expenses increased to $9 million in Q2 2026 from $7.4 million in Q2 2025, driven by the non-recurring benefit in the prior year period, which could pressure margins if not offset by revenue growth. Q: How is AudioEye positioned to capitalize on the increasing enforcement of the European Accessibility Act (EAA), and what is the company's strategy for scaling sales support in Europe if demand accelerates? A: Kelly Georgevich (CEO): We are closely monitoring developments across all EU countries and are being strategic with our investments there. We have resources in place and are pursuing a multichannel approach. While we still view the market as early innings, we are prepared to capitalize on the inflection point when it arrives, having already made inroads to do so. Q: What is the impact of AI on the competitive landscape and on AudioEye's internal efficiency, particularly in R&D and customer service? A: Kelly Georgevich (CEO): We are not seeing negative impacts from AI; in fact, it adds value for customers. AI coding tools are trained on the internet, which is not built with accessibility in mind, creating more inaccessible sites. Our key differentiator is our proprietary data set, built from millions of human reviews and billions of real-world fixes over 10 years, which no competitor or LLM has access to. Internally, we are using this data to make reporting and fixes easier for clients and to develop new, exciting AI-driven capabilities. This has also led to R&D efficiencies, with total R&D spend down to 12% of revenue from 17% year-over-year. Q: Can you provide more color on the year-over-year growth rates for the partner versus direct channels, given the moving parts on the direct side? A: Kelly Georgevich (CEO): The direct revenue year-over-year growth was impacted by a shift from nonrecurring to recurring revenue. However, enterprise ARR growth was notable both sequentially and year-over-year, which is the key metric to focus on. The partner and marketplace channel continues to see strong results from existing partners, with good growth on both the revenue and ARR side. Q: Given the strong partner performance ahead of mandates, are key partners seeing an impact from the upcoming DOJ regulations? A: Kelly Georgevich (CEO): We are seeing "all systems go" on the partner side. Even though the DOJ deadline was pushed back to 2027, partners are seeing strong results and are focused on further penetrating their customer base before that deadline arrives. Q: With the expectation of significant free cash flow generation, what are the company's thoughts on cash deployment, specifically regarding M&A? A: Kelly Georgevich (CEO): We expect to generate significant free cash flow in the second half of 2026 and into 2027, which opens up several possibilities. M&A is one of those options, and we are always evaluating opportunities, but it must be the right fit at the right price. We are also evaluating other options like share buybacks and dividends. Q: Is there an opportunity for new AI features to drive higher pricing, and how difficult will it be for AI coding to develop accessibility capabilities that could compete with AudioEye? A: Kelly Georgevich (CEO): Yes, AI capabilities present an opportunity to introduce supplemental products, which could increase the average selling price (ASP) per customer over time. Regarding competition, LLMs were not trained on accessible websites and are actually creating more inaccessible sites. Our proprietary data set, built from a decade of human fixes, is a unique asset that LLMs and competitors do not have access to, making it difficult for them to replicate our capabilities. Q: Can we assume litigation expenses will stay at lower levels for the foreseeable future? A: Kelly Georgevich (CEO): Litigation expense in Q2 came down 40% from Q1, and we expect it to continue to trend down in the second half of 2026. While we cannot comment on active litigation, we expect significant additional cash generation as a result of this trend. Q: What are the key drivers behind the company's strong adjusted EBITDA growth and the decision to raise full-year guidance? A: Kelly Georgevich (CEO) & Matthew Domeyer (CFO): Q2 marked the 42nd consecutive quarter of sequential revenue growth, with revenue at $10.7 million and ARR at $42.3 million. Adjusted EBITDA reached a record $3 million, a 28% margin, driven by a scalable operating model where a growing share of incremental revenue flows to the bottom line. We are raising full-year adjusted EBITDA guidance to at least $12.7 million, representing 40% year-over-year growth, and expect to achieve a run-rate adjusted EBITDA of over $15 million by Q4 2026. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Interested in Audioeye, Inc.? Here are five stocks we like better. Revenue and recurring growth continued: AudioEye’s second-quarter revenue rose 9% year over year to $10.7 million, while ARR increased 11% to $42.3 million, extending its sequential revenue-growth streak to 42 quarters. Profitability and cash flow improved: Adjusted EBITDA climbed 54% to approximately $3 million, producing a record 28% margin, while adjusted free cash flow reached $2.6 million. The company raised its full-year adjusted EBITDA forecast to at least $12.7 million. Growth is shifting toward recurring and international demand: Partner and marketplace revenue grew 16%, while enterprise ARR increased 5% despite flat reported enterprise revenue. Management highlighted rising European accessibility enforcement as a potential demand catalyst and said stronger cash generation could support buybacks, dividends, or acquisitions. Are These 3 Under-the-Radar AI Stocks the Next Big Growth Stories? Audioeye (NASDAQ:AEYE) reported second-quarter 2026 revenue of $10.7 million, up 9% from the prior-year period, as the digital accessibility software provider extended its streak of sequential revenue growth to 42 quarters. Annual recurring revenue, or ARR, reached $42.3 million as of June 30, increasing $1.1 million from the end of the first quarter and 11% from the comparable period a year earlier. Chief Executive Officer Kelly Georgevich said the company’s results reflected continued momentum across the business, while profitability and cash flow reached what she described as a pivotal point. → AST SpaceMobile Earnings Just Reminded Investors How Risky Space Can Be “As ARR scales, a growing share of incremental revenue is flowing to the bottom line,” Georgevich said. “We expect that trend to continue and accelerate in the second half of 2026.” AudioEye generated adjusted EBITDA of approximately $3 million in the second quarter, representing a record 28% adjusted EBITDA margin. The result was more than $600,000 above the first quarter and $1.1 million higher than the year-earlier quarter, a 54% increase. → Nebius’ Q2 Beat Shows the AI Bottleneck Is Capacity, Not Demand Chief Financial Officer Matthew Domeyer, who joined the company in July, said the year-over-year improvement in adjusted EBITDA was driven primarily by higher gross profit. Gross profit totaled $8.4 million, or about 79% of revenue, compared with $7.6 million, or 77% of revenue, a year earlier. Adjusted gross margin was 84%, up from 83%. The company reported a net loss of $900,000, or $0.07 per share, compared with breakeven in the prior-year quarter. Domeyer said the prior-year period benefited from a $1.4 million revaluation of contingent consideration that did not recur in the current quarter. Excluding that item, he said the net loss improved mainly because of higher gross profit. → On Holding's Price Stumble May Be an Opening for a Company Built to Run Adjusted free cash flow was $2.6 million in the quarter, calculated as adjusted EBITDA plus $400,000 of capitalized software development costs. That represented a $1.2 million improvement from the second quarter of 2025. AudioEye increased its full-year adjusted EBITDA outlook to at least $12.7 million, from prior guidance of at least $12 million. The company said the revised forecast implies a 29% adjusted EBITDA margin at the midpoint of its revenue outlook and 40% year-over-year adjusted EBITDA growth. It also expects adjusted earnings per share of at least $0.98 for 2026 and a run-rate adjusted EBITDA level of more than $15 million by year-end. The company maintained the midpoint of its full-year revenue outlook while narrowing the range to $43.5 million to $44 million. For the third quarter, AudioEye forecast revenue of $10.85 million to $11.05 million, with further acceleration in sequential revenue growth expected in the fourth quarter. AudioEye’s enterprise channel, which serves larger organizations and custom websites through direct sales, recorded flat revenue year over year. Domeyer said lower non-recurring revenue offset increased recurring revenue. Enterprise ARR grew 5% from a year earlier and posted 17% annualized sequential growth, accounting for approximately 41% of total ARR at quarter-end. The partner and marketplace channel, which includes small and midsize business marketplace offerings and partner-deployed products, grew revenue 16% year over year. The channel represented about 59% of total ARR and benefited from expansion with existing partners, including state and local government partners. Georgevich told analysts that enterprise revenue comparisons were affected by the shift from non-recurring to recurring revenue, and said ARR growth was the more relevant measure for the channel’s progress. Georgevich said the growth of AI-assisted coding is contributing to web accessibility problems because large language models were not built with accessibility in mind. She cited a recent WebAIM study finding that 95.9% of leading homepages contained detectable Web Content Accessibility Guidelines failures, averaging 56.1 errors per page. According to Georgevich, the error count rose 10% year over year after six years of improvement. The company’s Digital Accessibility Index, which covered more than 165,000 pages across 6,100 domains in the United States and Europe, found that interior pages averaged 10% more issues than homepages. Those interior pages accounted for roughly 60% of accessibility claims filed last year, Georgevich said. She also said European websites had about 25% more accessibility issues per page than comparable U.S. sites. While describing enforcement under the European Accessibility Act as still in its early stages, Georgevich pointed to stepped-up market surveillance in Sweden and the Netherlands, warning letters in Germany targeting non-compliant e-commerce operators, and a French court ruling requiring a major retailer to achieve full remediation within six months under the threat of daily penalties. AudioEye said the second quarter marked its strongest contribution from Europe to ARR growth to date. Georgevich said the company is pursuing a multi-channel European strategy and has resources in the region, while remaining prepared to increase its efforts if enforcement produces an inflection in demand. For the third quarter, AudioEye expects adjusted EBITDA of $3.4 million to $3.6 million and adjusted earnings per share of $0.26 to $0.28. At the midpoint, the company said $3.5 million in adjusted EBITDA plus approximately $400,000 in software development costs would imply $3.1 million of adjusted free cash flow. Management expects free cash flow to accelerate further in the fourth quarter as litigation expense trends lower. Georgevich said litigation expense fell 40% in the second quarter from the first quarter and is expected to decline further during the second half. AudioEye ended the quarter with $8.7 million in cash and $3 million available under its revolving credit line. Net debt was $8.1 million, and Domeyer said net debt to adjusted EBITDA, based on the company’s 2026 guidance, was approximately 0.6. Georgevich said anticipated cash generation could support options including potential share repurchases, dividends, or acquisitions, though she said any merger-and-acquisition activity would need to be the right strategic fit and occur at the right price. AudioEye, Inc is a provider of digital accessibility solutions, offering software and services designed to help organizations ensure their online properties comply with Web Content Accessibility Guidelines (WCAG), the Americans with Disabilities Act (ADA) and other global accessibility standards. Through its cloud-based platform, the company automates the detection and remediation of accessibility barriers in websites, mobile applications and multimedia content. The company's flagship AEYE Platform leverages machine learning, artificial intelligence and human validation to continuously scan digital assets, identify potential compliance issues and deploy corrective overlays or code adjustments. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Audioeye Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

AudioEye (AEYE) came out with quarterly earnings of $0.23 per share, beating the Zacks Consensus Estimate of $0.22 per share. This compares to earnings of $0.15 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +4.55%. A quarter ago, it was expected that this company would post earnings of $0.19 per share when it actually produced earnings of $0.18, delivering a surprise of -5.26%. Over the last four quarters, the company has surpassed consensus EPS estimates three times. AudioEye, which belongs to the Zacks Internet - Software industry, posted revenues of $10.72 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 0.06%. This compares to year-ago revenues of $9.86 million. The company has topped consensus revenue estimates three times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. AudioEye shares have lost about 41.8% since the beginning of the year versus the S&P 500's gain of 13.2%. While AudioEye has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for AudioEye was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.26 on $11.23 million in revenues for the coming quarter and $0.95 on $44.11 million in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Internet - Software is currently in the top 36% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Another stock from the same industry, Guidewire Software (GWRE), has yet to report results for the quarter ended July 2026. This provider of software to the insurance industry is expected to post quarterly earnings of $0.94 per share in its upcoming report, which represents a year-over-year change of +11.9%. The consensus EPS estimate for the quarter has been revised 0.4% lower over the last 30 days to the current level. Guidewire Software's revenues are expected to be $402.23 million, up 12.8% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Audioeye, Inc. (AEYE) : Free Stock Analysis Report Guidewire Software, Inc. (GWRE) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Forty-Second Consecutive Period of Record Revenue TUCSON, Ariz., Aug. 13, 2026 /PRNewswire/ -- AudioEye, Inc. (Nasdaq: AEYE) ("AudioEye" or the "Company"), an industry-leading digital accessibility company, reported financial results for the second quarter ended June 30, 2026. "This was an outstanding quarter with our forty-second quarter of sequential revenue growth and low double-digit year-over-year ARR growth. Adjusted EBITDA and free cash flow have reached a pivotal point, and GAAP net loss improved sequentially from the first quarter. We are raising our full year adjusted EBITDA guidance and expect to achieve over $15 million of annualized run rate adjusted EBITDA by the end of the year, with meaningful free cash flow generation in the second half of 2026. As our free cash flow continues to scale, we are evaluating options to deploy excess cash, including potential share buybacks and dividends," said Kelly Georgevich, Chief Executive Officer of AudioEye. Second Quarter 2026 Financial Results Annual Recurring Revenue ("ARR") as of June 30, 2026, increased sequentially to $42.3M from $41.2M as of March 31, 2026, and increased 11% compared to June 30, 2025. Total revenue increased 9% to a record $10.7M from $9.9M in the same prior year period. Gross profit increased to $8.4M (79% of total revenue) from $7.6M (77% of total revenue) in the same prior year period. The increase in gross profit was driven by continued revenue growth. Adjusted gross margin, which is defined as gross margin adjusted for non-cash items such as stock-based compensation and depreciation and amortization expenses in cost of revenue, was 84% in the second quarter of 2026 compared to 83% in the same prior year period. Operating expenses were $9.0M, an increase of 23% from the comparable prior year period. The increase was primarily due to the prior year quarter including a one-time gain on revaluation of contingent consideration of $1.4M, which did not recur in the current quarter, as well as increased general and administrative expenses in the current quarter, primarily driven by higher litigation expenses. Net loss was $0.9M, or $(0.07) per share, compared to a net loss of $0.0M, or $(0.00) per share, in the same prior year period. The prior year comparable period included a $1.4M one-time gain on revaluation of contingent consideration. Removing this impact, net loss improved due primarily to higher gross profit. Adjusted EBITDA in Q2 2026 was a record $3.0M, and adjusted EPS was $0.23 per share, compared to adjusted EBITDA of $1.9M and adjusted EPS of $0.15 per share in the same prior year period. For Q2 2026, the adjusted EBITDA and adjusted EPS results reflect adjustments primarily for stock-based compensation expense, litigation expense, depreciation and amortization, severance expense, and interest expense. At June 30, 2026, the Company had $8.7M in cash and cash equivalents, an increase of $0.1M from March 31, 2026. Other Updates AudioEye released the 2026 Digital Accessibility Index on June 25, 2026, scanning over 165,000 pages across 6,100 domains in the U.S. and Europe. The findings revealed a consistent gap between where accessibility programs focus and where risk is the highest, as AI search increasingly routes users past the homepage to less compliant interior pages. The scans also revealed that European sites averaged 25% more accessibility issues per page than U.S. sites. AudioEye appointed Matthew Domeyer as Chief Financial Officer, effective in July 2026. Matt brings finance leadership experience from Flexsteel Industries and PricewaterhouseCoopers, and succeeds Kelly Georgevich, who transitioned from CFO to CEO in May 2026. As of June 30, 2026, AudioEye had approximately 129,000 customers, an increase of 9,000 year-over-year from June 30, 2025, driven by increases in the Partner and Marketplace channel. Financial OutlookAudioEye expects revenue of between $10.85M and $11.05M for the third quarter of 2026 and between $43.5M and $44.0M for the full year 2026. The Company expects adjusted EBITDA of between $3.4M and $3.6M for the third quarter of 2026 and at least $12.7M of adjusted EBITDA, or 40% year-over-year growth, for the full year 2026. The Company expects adjusted EPS of between $0.26 and $0.28 per share for the third quarter of 2026 and at least $0.98 per share for the full year 2026. Conference Call InformationAudioEye management will hold a conference call today, August 13, 2026, at 4:30 p.m. Eastern time (1:30 p.m. Pacific time) to discuss these results, followed by a question-and-answer period. Date: Thursday, August 13, 2026Time: 4:30 p.m. Eastern Time (1:30 p.m. Pacific Time)U.S. dial-in number: 877-407-8289International number: 201-689-8341Webcast: Q226 Webcast Link Please call the conference telephone number 5-10 minutes prior to the start time. If you have any difficulty connecting with the conference call, please contact Gateway Group at 949-574-3860. The conference call will also be webcast live and available for replay via the investor relations section of the Company's website. The audio recording will remain available via the investor relations section of the Company's website for 90 days. A telephonic replay of the conference call will also be available after 7:30 p.m. Eastern Time on the same day through August 27, 2026 via the following numbers: Toll-free replay number: 877-660-6853International replay number: 201-612-7415Replay passcode: 13761919 Due to rounding, numbers presented throughout this document may not add precisely to the totals provided and percentages may not precisely reflect the absolute figures. About AudioEyeAudioEye exists to ensure the digital future we build is accessible. The gold standard for digital accessibility, AudioEye's comprehensive solution combines industry-leading AI automation technology with expert fixes informed by the disability community. This powerful combination delivers industry-leading protection, ensuring businesses of all sizes - including over 129,000 customers such as Samsung, Lands' End, and Samsonite - meet and exceed compliance standards. With 25 US patents, AudioEye's solution includes 24/7 accessibility monitoring, automated WCAG issue testing and fixes, expert testing, developer tools, and legal protection, empowering organizations to confidently create accessible digital experiences for all. Forward-Looking StatementsAll 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", "confident", "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 future cash flows of the Company, anticipated contributions from new sales channels, long-term growth prospects, opportunities in the digital accessibility industry, our revenue, adjusted EBITDA, adjusted EPS and ARR guidance, and our expectation of investments in marketing and sales. 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 revenue and financial performance; sales channels and offerings; product development and technological changes; the acceptance of AudioEye's products in the marketplace; the effectiveness of our integration efforts; competition; inherent uncertainties and costs associated with litigation; and general economic conditions. These and other risks are described more fully in AudioEye's filings with the Securities and Exchange Commission. 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 MetricsWe consider annual recurring revenue ("ARR") as a key operating metric and a key indicator of our overall business. We also use ARR as one of the primary methods for planning and forecasting overall expectations and for evaluating, on at least a quarterly and annual basis, actual results against such expectations. We manage customers through two primary channels, Enterprise and Partner and Marketplace. Enterprise channel consists of our larger customers and organizations, including those with non-platform custom websites, who generally engage directly with AudioEye sales personnel for custom pricing and solutions. This channel also includes federal, state and local government agencies. The Partner and Marketplace channel consists of our CMS partners, platform & agency partners, authorized resellers and our marketplace. This channel serves small and medium sized businesses who are on a partner or reseller's web-hosting platform or who purchase an AudioEye solution from our marketplace. We define ARR as the sum of (i) for our Enterprise channel, the total of the annualized recurring fee at the date of determination under each active contract, plus (ii) for our Partner and Marketplace channel, the annual or monthly recurring fee for all active customers at the date of determination, in each case, assuming no changes to the subscription, multiplied by 12 if applicable. Recurring fees are defined as revenues expected to be generated from services typically offered as a subscription service or annual service offering such as our automation and platform, periodic auditing, human-assisted technological fixes, legal support and professional service offerings and other services that reoccur on a multi-year contract. This determination includes both annual and monthly contracts for recurring products. Some of our contracts are terminable prior to the expected term, which may impact future ARR. ARR excludes non-recurring fees, which are defined as revenue expected to be generated from services typically not offered as a subscription service or annual service offering such as our PDF remediation services business, one-time mobile application reports, and other miscellaneous services that are offered as non-subscription services or are expected to be one-time in nature. Use of Non-GAAP Financial MeasuresFrom time to time, we review adjusted financial measures that assist us in comparing our operating performance consistently over time, as such measures remove the impact of certain items, as applicable, such as our capital structure (primarily interest charges), certain non-cash items, including stock compensation and depreciation and amortization expense, and other expenses that do not relate to our core operations, including significant transaction and litigation-related expenses and other costs that are expected to be non-recurring. In order to provide investors with greater insight and allow for a more comprehensive understanding of the information used in our financial and operational decision-making, the Company has supplemented the consolidated financial statements presented on a GAAP basis in this press release with the following non-GAAP financial measures: Adjusted EBITDA, Adjusted EBITDA margin, Adjusted earnings (loss) per diluted share (adjusted EPS) and Adjusted gross margin. These non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation or as a substitute for analysis of Company results as reported under GAAP. The Company compensates for such limitations by relying primarily on our GAAP results and using non-GAAP financial measures only as supplemental data. We also provide a reconciliation of non-GAAP to GAAP measures used. Investors are encouraged to carefully review this reconciliation. In addition, because these non-GAAP measures are not measures of financial performance under GAAP and are susceptible to varying calculations, these measures, as defined by us, may differ from and may not be comparable to similarly titled measures used by other companies. Adjusted EBITDA, Adjusted EBITDA Margin, and Adjusted Earnings (Loss) per Diluted ShareWe define: (i) Adjusted EBITDA as net income (loss), plus interest expense, plus depreciation and amortization expense, plus stock-based compensation expense, less change in fair value of contingent consideration, plus certain litigation expense, plus certain acquisition expense, plus certain severance expense, plus loss on disposal or impairment of long-lived assets, plus loss on extinguishment of debt, and plus lost deposit on alternative financing; (ii) Adjusted EBITDA margin as Adjusted EBITDA as a percentage of GAAP revenue; and (iii) Adjusted earnings (loss) per diluted share (EPS) as net income (loss) per diluted common share, plus interest expense, plus depreciation and amortization expense, plus stock-based compensation expense, less change in fair value of contingent consideration, plus certain litigation expense, plus certain acquisition expense, plus certain severance expense, plus loss on disposal or impairment of long-lived assets, plus loss on extinguishment of debt, and plus lost deposit on alternative financing, each on a per share basis. Adjusted earnings per diluted share includes incremental shares in the share count that are considered anti-dilutive in a GAAP net loss position. Adjusted Gross MarginWe define Adjusted gross margin as gross profit, plus stock-based compensation expense and depreciation and amortization expense allocated to cost of revenue, expressed as a percentage of total revenue. Adjusted EBITDA, Adjusted EBITDA margin, Adjusted earnings (loss) per diluted share, and Adjusted gross margin are used to facilitate a comparison of our operating performance on a consistent basis from period to period and provide for a more complete understanding of factors and trends affecting our business than GAAP measures alone. All of the items adjusted in these calculations are either recurring non-cash items or items that management does not consider in assessing our ongoing operating performance. In the case of the non-cash items, such as stock-based compensation expense and valuation adjustments to assets and liabilities, management believes that investors may find it useful to assess our comparative operating performance because the measures without such items are expected to be less susceptible to variances in actual performance resulting from expenses that do not relate to our core operations and are more reflective of other factors that affect operating performance. In the case of items that do not relate to our core operations, management believes that investors may find it useful to assess our operating performance if the measures are presented without these items because their financial impact does not reflect ongoing operating performance. Adjusted EBITDA is not a measure of liquidity under GAAP, or otherwise, and is not an alternative to cash flow from continuing operating activities, despite the advantages regarding the use and analysis of these measures as mentioned above. Adjusted EBITDA, Adjusted EBITDA margin, Adjusted earnings (loss) per diluted share, and Adjusted gross margin, as disclosed in this press release, have limitations as analytical tools, and you should not consider these measures in isolation or as a substitute for analysis of our results as reported under GAAP; nor are these measures intended to be measures of liquidity or free cash flow. To properly and prudently evaluate our business, we encourage readers to review the consolidated GAAP financial statements included in this press release and not rely on any single financial measure to evaluate our business. Reconciliations of Adjusted EBITDA to net loss, the most directly comparable GAAP-based measure, Adjusted earnings (loss) per diluted share to net loss per diluted share, the most directly comparable GAAP-based measure, and Adjusted gross margin to gross margin, the most directly comparable GAAP-based measure are provided in tables later in this press release. We strongly urge readers to review these reconciliations, along with the financial statements included in this press release. Forward-Looking Non-GAAP Financial MeasuresThis press release and statements made in our conference call today also include the forward-looking non-GAAP financial measures of adjusted EBITDA, adjusted EBITDA margin, adjusted EPS and free cash flow guidance for the third quarter and full year 2026 as well as adjusted EBITDA run-rate expectations. We calculate forward-looking non-GAAP financial measures based on internal forecasts that omit certain amounts that would be included in GAAP financial measures. We have not provided quantitative reconciliations of these forward-looking non-GAAP financial measures to the most directly comparable forward-looking GAAP financial measures because the excluded items are not available on a prospective basis without unreasonable efforts. In addition, the Company believes such reconciliations would imply a degree of precision and certainty that could be confusing to investors. It is probable that these forward-looking non-GAAP financial measures may be materially different from the corresponding GAAP financial measures. Investor Contact:Tom ColtonGateway Group, [email protected] View original content to download multimedia:https://www.prnewswire.com/news-releases/audioeye-reports-record-second-quarter-2026-results-302851274.html

AudioEye (AEYE) came out with quarterly earnings of $0.18 per share, missing the Zacks Consensus Estimate of $0.19 per share. This compares to earnings of $0.15 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of -2.70%. A quarter ago, it was expected that this company would post earnings of $0.21 per share when it actually produced earnings of $0.22, delivering a surprise of +4.76%. Over the last four quarters, the company has surpassed consensus EPS estimates two times. AudioEye, which belongs to the Zacks Internet - Software industry, posted revenues of $10.55 million for the quarter ended March 2026, surpassing the Zacks Consensus Estimate by 0.03%. This compares to year-ago revenues of $9.73 million. The company has topped consensus revenue estimates two times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. AudioEye shares have lost about 23% since the beginning of the year versus the S&P 500's gain of 8.3%. While AudioEye has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for AudioEye was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.21 on $10.75 million in revenues for the coming quarter and $0.92 on $44.1 million in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Internet - Software is currently in the top 32% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. One other stock from the same industry, Sangoma Technologies Corporation (SANG), is yet to report results for the quarter ended March 2026. The results are expected to be released on May 13. This company is expected to post quarterly loss of $0.04 per share in its upcoming report, which represents a year-over-year change of -33.3%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Sangoma Technologies Corporation's revenues are expected to be $52.25 million, down 10% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Audioeye, Inc. (AEYE) : Free Stock Analysis Report Sangoma Technologies Corporation (SANG) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Interested in Audioeye, Inc.? Here are five stocks we like better. AudioEye posted solid Q1 growth, with revenue up 8% year over year to $10.6 million and ARR rising to $41.2 million. The company also improved adjusted EBITDA to $2.4 million and generated $1.9 million in free cash flow. Leadership is shifting as Kelly Georgevich moves into the CEO role while David Moradi stays on as executive chairman and chief product officer. Moradi will focus on product strategy and AI initiatives, which management says are central to the next phase of growth. Management raised its 2026 outlook, guiding for full-year revenue of $43.25 million to $44.25 million and at least $12 million in adjusted EBITDA. The company expects margin expansion and sees continued demand driven by accessibility litigation, regulatory changes, and AI-enabled product improvements. Are These 3 Under-the-Radar AI Stocks the Next Big Growth Stories? Audioeye (NASDAQ:AEYE) reported first-quarter 2026 revenue growth and raised its profitability outlook, while outlining a leadership transition that will move Kelly Georgevich into the chief executive role and keep David Moradi focused on product strategy and artificial intelligence initiatives. The digital accessibility software company said first-quarter revenue rose 8% year over year to $10.6 million, marking what management described as its 41st consecutive quarter of record revenue. Annual recurring revenue, or ARR, reached $41.2 million as of March 31, up from $40 million at the end of 2025 and up 11% from a year earlier. → MercadoLibre Boldly Invests in Growth: Discount Deepens Georgevich, who is now CEO and CFO, said the company expects ARR growth to continue and to support “notable sequential growth rates in revenue” in the third and fourth quarters of 2026. Moradi, AudioEye’s executive chairman and chief product officer, said the transition was planned and reflects the board’s confidence in Georgevich’s ability to lead the company through its next phase of growth. → Rocket Lab Just Hit a New All-Time High—Time to Buy or Let It Breathe? “Kelly has been instrumental in helping us achieve these top-tier results since joining AudioEye in 2021,” Moradi said. “I’ve worked closely with Kelly for almost five years, and I’m highly confident that as CEO, she will lead the company through our next phase of growth and continued operating margin improvement.” Moradi said he will continue to focus on long-term strategy and product innovation, including AI initiatives made possible by recent improvements in large language models. He said AudioEye’s next-generation platform combines custom fixes with AI to give customers a more complete view of their accessibility risk profile. → MP Materials Is Quietly Building a Rare Earth Powerhouse Georgevich thanked Moradi for his role in transforming the company and said she plans to build on the company’s current foundation from both an operational and product standpoint. Management said the broader market environment continues to underscore the need for digital accessibility solutions that can operate with accuracy and scale. Georgevich cited the 2026 WebAIM Million report, which found that 95.9% of the top 1 million home pages had detectable WCAG failures, averaging 56.1 errors per page. She said that represented a 10% increase from the prior year and reversed six consecutive years of gradual improvement. Georgevich said WebAIM attributed the decline to broader shifts in web development, including greater reliance on third-party frameworks and AI-assisted coding. Moradi added during the question-and-answer session that AI coding tools are often drawing from inaccessible content because the internet was not originally coded with accessibility in mind. “You’re seeing the number of sites explode, the number of content explode, and that’s why we’re seeing all-time highs in litigation,” Moradi said. On the regulatory front, Georgevich said the U.S. Department of Justice published an interim final rule in April 2026 extending Title II web accessibility compliance deadlines by one year for state and local governments, with enforcement now expected to begin in April 2027. She said AudioEye views the delay as an affirmation of the federal commitment to digital accessibility and a broader runway for the company and its channel partners to engage state and local governments. In response to analyst questions, Georgevich said the delay has not reduced urgency among state and local government partners. She said partners are continuing with the same go-to-market activity and customer messaging. AudioEye reported first-quarter gross profit of $8.3 million, or about 78% of revenue, compared with $7.7 million, or 80% of revenue, in the year-earlier period. Adjusted gross margin was 84%, compared with 85% in the prior-year quarter. Operating expenses increased to $10.1 million from $8.7 million a year earlier. Net loss widened to $2.1 million, or $0.17 per share, compared with a net loss of $1.5 million, or $0.12 per share, in the first quarter of 2025. Georgevich said the increase reflected higher litigation expenses, depreciation and amortization, and added investments in sales and marketing. The company reported adjusted EBITDA of approximately $2.4 million, or $0.18 per share, representing an adjusted EBITDA margin of 22%. That compared with adjusted EBITDA of $1.9 million, or $0.15 per share, and a 20% margin in the prior-year quarter. AudioEye generated $1.9 million of free cash flow in the quarter. The company ended the period with $8.6 million in cash and $3 million available under a revolving line of credit. Georgevich said net debt was $8.4 million as of March 31, with net debt to adjusted EBITDA of about 0.7 times based on 2026 adjusted EBITDA guidance. AudioEye said it had approximately 127,000 customers as of March 31, up 8,000 from a year earlier. The total was down 4,000 from Dec. 31, 2025, which Georgevich attributed to one partner’s realignment of its own customer base. She said the partner continues to support thousands of AudioEye customers and that the change had no material impact on revenue or ARR. Enterprise channel: Revenue grew 9% year over year in the first quarter. The channel represented about 41% of ARR as of March 31. Partner and marketplace channel: Revenue grew 8% year over year and represented about 59% of ARR. Georgevich said the channel contributed meaningfully to ARR growth, including expansion from state and local government partners. Georgevich also said AudioEye continues to build pipeline in the European Union while remaining disciplined with investments. In response to an analyst question, she said the EU is moving “a bit slower” and is “a bit bureaucratic,” but the company is seeing positive signals and building its team ahead of enforcement. For the second quarter of 2026, AudioEye guided for revenue of $10.65 million to $10.75 million, adjusted EBITDA of $2.6 million to $2.7 million, and adjusted EPS of $0.21 to $0.22. At the midpoint, the adjusted EBITDA margin would be about 25%. For full-year 2026, the company refined its revenue guidance to $43.25 million to $44.25 million. It now expects adjusted EBITDA of at least $12 million, representing a nearly 27% adjusted EBITDA margin at the midpoint of revenue guidance, and adjusted EPS of at least $0.96. Georgevich said that outlook would represent at least 33% growth in adjusted EBITDA and adjusted EPS from 2025. The company also continues to target a $15 million run-rate adjusted EBITDA level by the end of 2026. During the question-and-answer session, Moradi said AudioEye is using agents and proprietary data to make products faster and more useful for clients, with the goal of improving accuracy, detection, legal protection and margins over time. Asked whether AI could reduce the amount of professional services required, Moradi said, “That’s the goal.” AudioEye, Inc is a provider of digital accessibility solutions, offering software and services designed to help organizations ensure their online properties comply with Web Content Accessibility Guidelines (WCAG), the Americans with Disabilities Act (ADA) and other global accessibility standards. Through its cloud-based platform, the company automates the detection and remediation of accessibility barriers in websites, mobile applications and multimedia content. The company's flagship AEYE Platform leverages machine learning, artificial intelligence and human validation to continuously scan digital assets, identify potential compliance issues and deploy corrective overlays or code adjustments. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Audioeye Q1 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for May 2026.