Core Insights - AudioEye, Inc. focuses on digital accessibility solutions for individuals with disabilities, operating in a competitive landscape with peers like Brightcove Inc., ClearPoint Neuro, Inc., Rekor Systems, Inc., DarioHealth Corp., and Apyx Medical Corporation [1] Financial Performance - AudioEye has a Return on Invested Capital (ROIC) of -14.04%, significantly lower than its Weighted Average Cost of Capital (WACC) of 6.98%, indicating inefficiency in generating returns to cover its cost of capital [2][5] - ClearPoint Neuro, Inc. has a ROIC of -40.55% against a WACC of 7.76%, suggesting severe inefficiencies in generating returns on invested capital [3][5] - Rekor Systems, Inc. and DarioHealth Corp. report negative ROICs of -107.12% and -18.93%, respectively, with WACCs of 12.18% and 8.50%, indicating similar capital utilization challenges [4] - Apyx Medical Corporation shows a ROIC of -26.00% and a WACC of 11.51%, further emphasizing the difficulties faced by these companies in generating sufficient returns [4]

LONDON, Aug. 13, 2025 /PRNewswire/ -- AudioEye, Inc. (Nasdaq: AEYE) ("AudioEye" or the "Company"), the industry-leading digital accessibility company, today announced that Motability Operations, the company that runs the Motability Scheme, selected the AudioEye Digital Accessibility Platform to enhance the accessibility and compliance of its digital experiences. The engagement supports Motability Operations' ongoing accessibility work through a combination of AudioEye's industry-leading automation and acces ...

PART I: FINANCIAL INFORMATION [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) Unaudited consolidated financial statements for June 30, 2025, show increased assets and liabilities, decreased equity, and improved operational performance with revenue growth and a narrowed net loss [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets increased to **$33.9 million**, liabilities to **$26.6 million** due to a new term loan, while stockholders' equity decreased to **$7.3 million** Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | **$33,900** | **$29,766** | | Cash and cash equivalents | $6,869 | $5,651 | | Intangible assets, net | $11,929 | $10,276 | | **Total Liabilities** | **$26,551** | **$20,330** | | Term loan, net | $12,765 | $6,820 | | Deferred revenue | $8,229 | $7,518 | | **Total Stockholders' Equity** | **$7,349** | **$9,436** | [Consolidated Statements of Operations](index=5&type=section&id=Consolidated%20Statements%20of%20Operations) Q2 2025 revenue grew **16%** to **$9.9 million**, achieving operating income of **$242,000** and a near breakeven net loss of **($2,000)**, significantly improving from Q2 2024 Q2 2025 vs Q2 2024 Performance (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | $9,857 | $8,470 | +16.4% | | Gross Profit | $7,619 | $6,706 | +13.6% | | Operating Income (Loss) | $242 | $(497) | +148.7% | | Net Loss | $(2) | $(735) | +99.7% | | Net Loss Per Share | $0.00 | $(0.06) | +100.0% | H1 2025 vs H1 2024 Performance (in thousands, except per share data) | Metric | H1 2025 | H1 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | $19,590 | $16,553 | +18.3% | | Gross Profit | $15,357 | $13,028 | +17.9% | | Operating Loss | $(698) | $(1,128) | +38.1% | | Net Loss | $(1,471) | $(1,564) | +6.0% | | Net Loss Per Share | $(0.12) | $(0.13) | +7.7% | [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For H1 2025, operating cash flow increased to **$1.2 million**, investing cash use rose to **$2.7 million** due to acquisitions, and financing cash flow reversed to a **$2.7 million** inflow from new debt Cash Flow Summary for Six Months Ended June 30 (in thousands) | Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $1,171 | $613 | | Net cash used in investing activities | $(2,671) | $(1,035) | | Net cash provided by (used in) financing activities | $2,718 | $(3,728) | | **Net increase (decrease) in cash** | **$1,218** | **$(4,150)** | [Notes to Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Notes detail revenue streams, Q2 2025 asset acquisition, a new **$20 million** credit facility replacing prior debt, and the initiation of a share repurchase program - Revenue is disaggregated into two sales channels: Partner and Marketplace, and Enterprise. For the six months ended June 30, 2025, Enterprise revenue grew **27%** YoY, while Partner and Marketplace revenue grew **13%** YoY[30](index=30&type=chunk)[123](index=123&type=chunk) - One customer accounted for approximately **14%** of total revenue in the first six months of 2025 and **11%** of total accounts receivable as of June 30, 2025[32](index=32&type=chunk)[35](index=35&type=chunk) - In Q2 2025, the company completed an asset acquisition, recognizing **$1.8 million** in customer relationships, which will be amortized over 8 years[76](index=76&type=chunk) - On March 31, 2025, the company entered a new credit facility with Western Alliance Bank for up to **$20.0 million** and used proceeds to repay its previous **$7.0 million** term loan with SG Credit Partners, recognizing a **$300,000** loss on extinguishment of debt[87](index=87&type=chunk)[97](index=97&type=chunk) - In January 2025, the Board authorized a share repurchase program of up to **$12.5 million**. As of June 30, 2025, the company had repurchased shares for **$1.76 million**, with **$10.74 million** remaining[57](index=57&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=29&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses **18%** H1 2025 revenue growth, **14%** ARR increase to **$38.2 million**, rising operating expenses due to litigation, and improved liquidity from a new credit facility [Executive Overview and Key Metrics](index=30&type=section&id=Executive%20Overview%20and%20Key%20Metrics) The company achieved **18%** H1 2025 revenue growth, with ARR increasing **14%** to **$38.2 million**, despite a **1%** customer count decrease due to contract renegotiation - Annual Recurring Revenue (ARR) was approximately **$38.2 million** as of June 30, 2025, a **14%** increase year-over-year[112](index=112&type=chunk)[142](index=142&type=chunk) - The customer count decreased by **1%** to approximately **120,000** from June 30, 2024, due to a contract renegotiation within the Partner and Marketplace channel[113](index=113&type=chunk) - For the six months ended June 30, 2025, the Partner and Marketplace channel revenue grew **13%** and the Enterprise channel revenue grew **27%** over the prior year period[114](index=114&type=chunk) [Results of Operations Analysis](index=32&type=section&id=Results%20of%20Operations%20Analysis) H1 2025 revenue grew **18%** to **$19.6 million**, with gross profit matching; operating expenses rose **13%** due to increased selling, marketing, and G&A costs, partially offset by a **$1.3 million** non-cash gain Revenue by Channel - Six Months Ended June 30 (in thousands) | Channel | 2025 | 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Partner and Marketplace | $10,919 | $9,704 | $1,215 | 13% | | Enterprise | $8,671 | $6,849 | $1,822 | 27% | | **Total revenue** | **$19,590** | **$16,553** | **$3,037** | **18%** | - Selling and marketing expenses for H1 2025 increased by **26%** YoY, primarily due to higher third-party marketing expenses and costs from acquisitions[129](index=129&type=chunk)[130](index=130&type=chunk) - General and administrative expenses for H1 2025 increased by **33%** YoY, mainly due to an **$830,000** increase in litigation expense, higher personnel costs, and amortization[133](index=133&type=chunk)[135](index=135&type=chunk) - A non-cash gain of **$1.31 million** was recognized in H1 2025 due to a reduction in the estimated earnout payable for the ADA Site Compliance acquisition[136](index=136&type=chunk)[137](index=137&type=chunk) [Liquidity and Capital Resources](index=36&type=section&id=Liquidity%20and%20Capital%20Resources) As of June 30, 2025, the company held **$6.9 million** in cash and **$1.4 million** in working capital, an improvement driven by **$13.4 million** in new term loan advances, ensuring sufficient liquidity for the next twelve months - Working capital increased from **$549,000** at Dec 31, 2024, to **$1,384,000** at June 30, 2025, mainly due to new debt financing[143](index=143&type=chunk) - The company initiated a **$12.5 million** share repurchase program in January 2025 and used **$1.76 million** of it in the first six months of the year[144](index=144&type=chunk) - Cash from financing activities increased significantly due to **$13.4 million** in proceeds from a new term loan, partially offset by the repayment of a **$7.0 million** previous loan[149](index=149&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=37&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section is indicated as not applicable - Not applicable[152](index=152&type=chunk) [Item 4. Controls and Procedures](index=37&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded the company's disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting during the quarter - Based on an evaluation as of the end of the period, the Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective[155](index=155&type=chunk) - No material changes were made to the company's internal control over financial reporting during the quarter ended June 30, 2025[156](index=156&type=chunk) PART II: OTHER INFORMATION [Item 1. Legal Proceedings](index=40&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently involved in any legal proceedings expected to materially adversely affect its financial position or operations - Management believes the resolution of any routine disputes incidental to business operations is not likely to have a material adverse effect on the company[162](index=162&type=chunk) [Item 1A. Risk Factors](index=40&type=section&id=Item%201A.%20Risk%20Factors) No material changes have occurred to the risk factors previously disclosed in the 2024 Form 10-K - No material changes to the risk factors set forth in the 2024 Form 10-K have occurred[163](index=163&type=chunk) [Item 2. Issuer Purchases of Equity Securities](index=40&type=section&id=Item%202.%20Issuer%20Purchases%20of%20Equity%20Securities) During Q2 2025, the company repurchased **143,939** shares for approximately **$1.76 million** under its **$12.5 million** share repurchase program Share Repurchases for Q2 2025 | Period | Total Shares Purchased (Program) | Average Price Paid per Share | Approx. Value Remaining ($) | | :--- | :--- | :--- | :--- | | May 1 - May 31 | 123,939 | $12.24 | $10,983,000 | | June 1 - June 30 | 20,000 | $12.38 | $10,735,000 | | **Total Q2** | **143,939** | **$12.26** | **$10,735,000** | [Item 6. Exhibits](index=41&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including officer certifications and documents related to loan modification and board resolutions

Company Performance - AudioEye reported quarterly earnings of $0.15 per share, missing the Zacks Consensus Estimate of $0.16 per share, but showing an increase from $0.12 per share a year ago, resulting in an earnings surprise of -6.25% [1] - The company posted revenues of $9.86 million for the quarter ended June 2025, missing the Zacks Consensus Estimate by 0.8%, and an increase from $8.47 million year-over-year [2] - Over the last four quarters, AudioEye has surpassed consensus EPS estimates only once and has topped consensus revenue estimates just once [2] Stock Performance - AudioEye shares have declined approximately 21% since the beginning of the year, contrasting with the S&P 500's gain of 7.9% [3] - The current Zacks Rank for AudioEye is 3 (Hold), indicating that the shares are expected to perform in line with the market in the near future [6] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $0.18 on revenues of $10.49 million, and for the current fiscal year, it is $0.71 on revenues of $41.51 million [7] - The outlook for the Internet - Software industry, where AudioEye operates, is currently in the top 28% of over 250 Zacks industries, suggesting a favorable environment for performance [8]

Financial Data and Key Metrics Changes - In Q2 2025, AudioEye achieved revenue of $9.9 million, representing a 16% increase year-over-year and marking the 38th consecutive quarter of growth [15][5] - Annual Recurring Revenue (ARR) increased by $1.1 million sequentially and $4.9 million year-over-year to $38.2 million [15][5] - Adjusted EBITDA for Q2 2025 was $1.9 million, a 31% increase year-over-year [21] - The company expects adjusted EBITDA margins to reach the high 20s by Q4 2025 [6] Business Line Data and Key Metrics Changes - The enterprise channel grew by 25% year-over-year, contributing approximately 45% of revenue and ARR, while the partner and marketplace channel grew around 10%, contributing about 55% [19] - The company is phasing out lower-margin legacy services from acquired companies, which has impacted ARR and revenue numbers [19][10] Market Data and Key Metrics Changes - The European Accessibility Act (EAA) went into effect in late June 2025, creating significant demand for AudioEye's services in the EU [10] - The company is seeing a growing pipeline in the EU, which has reportedly tripled from Q2 to Q3 2025 [29][34] Company Strategy and Development Direction - AudioEye aims to achieve annual adjusted EPS growth of 30% to 40% over the next three years [7] - The company is focusing on integrating recent acquisitions to standardize offerings and eliminate duplicate systems, which is expected to enhance cash flow [9] - There is a strong emphasis on expanding presence in the EU and targeting agencies that create websites for clients [46] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about accelerating ARR and revenue growth in the second half of 2025, driven by strong demand in the enterprise business [5][6] - The company anticipates that the enforcement of the EAA will lead to increased legal actions for non-compliance, further driving demand for its services [10][11] - Management noted that the digital accessibility lawsuits have increased, which is expected to benefit AudioEye's growth [28] Other Important Information - The company repurchased approximately $1.8 million of shares in Q2 2025 [22] - As of June 30, 2025, AudioEye had $6.9 million in cash and $6.6 million in available debt facilities [22] Q&A Session Summary Question: Impact of phased-out customers on numbers - Management indicated that acquisition-related churn is expected to impact ARR by approximately $1 million to $1.5 million in 2025, primarily due to the migration to AudioEye products [25][26] Question: Digital accessibility lawsuits trend - Management acknowledged that digital accessibility lawsuits are likely up, estimating a 10% to 20% increase, and noted that the company is outgrowing the market [28] Question: EU pipeline visibility - Management reported that the pipeline for the EU business has tripled from the previous quarter, indicating strong growth potential [29][34] Question: Expansion strategy in the EU - Management confirmed that the company is adding salespeople and increasing marketing efforts in the EU to drive growth [36] Question: Title II of the DOJ update - Management expects significant momentum from partners in the government-adjacent space as they prepare for the implementation of Title II [49]

[Executive Summary & Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Highlights) [Second Quarter 2025 Performance Highlights](index=1&type=section&id=Second%20Quarter%202025%20Performance%20Highlights) AudioEye achieved its 38th consecutive quarter of record revenue, with significant year-over-year growth in total revenue, gross profit, adjusted EBITDA, and adjusted EPS, alongside a substantial reduction in net loss and sequential increases in ARR and customer count Second Quarter 2025 Key Financial & Operational Highlights | Metric | Q2 2025 | Q2 2024 | Change (YoY) | | :----------------------- | :------ | :------ | :----------- | | Total Revenue | $9.9M | $8.5M | +16% | | Gross Profit | $7.6M | $6.7M | +13.4% | | Gross Margin | 77% | 79% | -2 ppts | | Net Loss | $0.0M | $0.7M | -100% | | Net Loss per Share | $(0.00) | $(0.06) | -100% | | Adjusted EBITDA | $1.9M | $1.5M | +26.7% | | Adjusted EPS | $0.15 | $0.12 | +25% | | Annual Recurring Revenue (ARR) (as of June 30, 2025) | $38.2M | $37.1M (as of Mar 31, 2025) | +$1.1M (Seq) | | Total Customers (as of June 30, 2025) | 120,000 | 119,000 (as of Mar 31, 2025) | +1,000 (Seq) | [Strategic Updates](index=1&type=section&id=Strategic%20Updates) AudioEye is experiencing business momentum in the US and EU, driven by the newly enacted European Accessibility Act, while strategically phasing out legacy platforms to enhance efficiency and focus on synergistic cash flow - Business momentum is driven by the United States and the newly enacted European Accessibility Act (EAA), which went into effect on June 28, 2025, and is expected to drive demand and compliance[2](index=2&type=chunk)[6](index=6&type=chunk) - The company is phasing out certain customers and legacy platforms from previous acquisitions to avoid duplicate systems, remove technology debt, and focus on synergistic cash flow[5](index=5&type=chunk) - Customer count increased sequentially by **1,000** to approximately **120,000**, driven by growth in both the Partner and Marketplace and Enterprise channels[6](index=6&type=chunk) [Financial Outlook](index=1&type=section&id=Financial%20Outlook) AudioEye provided updated full-year 2025 guidance, projecting continued revenue growth and improved profitability, with an aspirational goal for significant annual EPS growth over the next three years Financial Outlook (Q3 2025 & Full Year 2025 Guidance) | Metric | Q3 2025 Guidance | Full Year 2025 Guidance (Updated) | | :----------------- | :--------------- | :-------------------------------- | | Revenue | $10.2M - $10.4M | $40.3M - $40.7M | | Annualized Growth Rate (midpoint) | 18% | N/A | | Adjusted EBITDA | $2.2M - $2.4M | $8.9M - $9.1M | | Adjusted EPS | $0.17 - $0.19 | $0.71 - $0.73 | - Aspirational goal to grow adjusted EPS and EPS annually by **30-40%** for the next three years[2](index=2&type=chunk) [Company Information](index=3&type=section&id=Company%20Information) [About AudioEye](index=3&type=section&id=About%20AudioEye) AudioEye is a leading digital accessibility company dedicated to ensuring an accessible digital future, with a comprehensive solution combining AI automation and expert human fixes, serving over 120,000 customers and holding 24 US patents - **AudioEye** is an industry-leading digital accessibility company, aiming to ensure the digital future is accessible[1](index=1&type=chunk)[9](index=9&type=chunk) - The company's solution combines **AI automation technology** with expert fixes informed by the disability community[9](index=9&type=chunk) - AudioEye serves over **120,000 customers**, including major brands like Samsung, Calvin Klein, and Samsonite, helping them meet and exceed compliance standards[9](index=9&type=chunk) - The solution includes **24/7 accessibility monitoring**, automated WCAG issue testing and fixes, expert testing, developer tools, and legal protection, backed by **24 US patents**[9](index=9&type=chunk) [Key Operating Metrics & Definitions](index=3&type=section&id=Key%20Operating%20Metrics%20%26%20Definitions) AudioEye considers Annual Recurring Revenue (ARR) as a key operating metric and defines its customer base through two primary channels: Enterprise and Partner & Marketplace, each with distinct characteristics and service models - **Annual Recurring Revenue (ARR)** is considered a key operating metric and indicator of overall business performance, used for planning, forecasting, and evaluating results[11](index=11&type=chunk) [Customer Channels](index=4&type=section&id=Customer%20Channels) AudioEye manages its customers through two primary channels: Enterprise, which serves larger organizations with custom solutions, and Partner & Marketplace, which caters to small and medium-sized businesses via partners or direct marketplace purchases - The **Enterprise channel** consists of larger customers and organizations, including those with non-platform custom websites, who generally engage directly with AudioEye sales personnel for custom pricing and solutions, and also includes federal, state, and local government agencies[12](index=12&type=chunk)[13](index=13&type=chunk) - The **Partner and Marketplace channel** serves small and medium-sized businesses (SMBs) who are on a partner or reseller's web-hosting platform or who purchase an AudioEye solution from its marketplace, including CMS partners, platform & agency partners, and authorized resellers[13](index=13&type=chunk) [Annual Recurring Revenue (ARR) Definition](index=5&type=section&id=Annual%20Recurring%20Revenue%20%28ARR%29%20Definition) ARR is calculated as the sum of annualized recurring fees from active contracts in the Enterprise channel and annual or monthly recurring fees for active customers in the Partner & Marketplace channel, specifically including subscription-based services and excluding one-time fees - **ARR** is defined as the sum of (i) the total annualized recurring fee at the date of determination under each active contract for the Enterprise channel, plus (ii) the annual or monthly recurring fee for all active customers at the date of determination for the Partner and Marketplace channel, assuming no changes to the subscription[14](index=14&type=chunk) - Recurring fees include revenues from subscription services or annual service offerings such as automation and platform, periodic auditing, human-assisted technological fixes, legal support, professional service offerings, and other multi-year recurring services[14](index=14&type=chunk) - **ARR excludes non-recurring fees**, which are revenues from services typically not offered as a subscription or annual service, such as PDF remediation, one-time mobile application reports, and other miscellaneous one-time services[14](index=14&type=chunk) [Financial Statements & Non-GAAP Reconciliations](index=8&type=section&id=Financial%20Statements%20%26%20Non-GAAP%20Reconciliations) [Consolidated Statements of Operations](index=8&type=section&id=Consolidated%20Statements%20of%20Operations) The unaudited consolidated statements of operations show AudioEye's financial performance for the three and six months ended June 30, 2025, compared to the prior year, highlighting revenue growth and a significant reduction in net loss Consolidated Statements of Operations (Unaudited, in thousands, except per share data) | Metric | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :---------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenue | $9,857 | $8,470 | $19,590 | $16,553 | | Cost of revenue | $2,238 | $1,764 | $4,233 | $3,525 | | Gross profit | $7,619 | $6,706 | $15,357 | $13,028 | | Total operating expenses | $7,377 | $7,203 | $16,055 | $14,156 | | Operating income (loss) | $242 | $(497) | $(698) | $(1,128) | | Net loss | $(2) | $(735) | $(1,471) | $(1,564) | | Net loss per common share-basic and diluted | $0.00 | $(0.06) | $(0.12) | $(0.13) | [Consolidated Balance Sheets](index=9&type=section&id=Consolidated%20Balance%20Sheets) The unaudited consolidated balance sheets present AudioEye's financial position as of June 30, 2025, compared to December 31, 2024, showing changes in assets, liabilities, and stockholders' equity Consolidated Balance Sheets (Unaudited, in thousands, except per share data) | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :---------------- | | Cash and cash equivalents | $6,869 | $5,651 | | Total current assets | $14,789 | $12,120 | | Total assets | $33,900 | $29,766 | | Total current liabilities | $13,405 | $11,571 | | Total liabilities | $26,551 | $20,330 | | Total stockholders' equity | $7,349 | $9,436 | [Non-GAAP Financial Measures](index=5&type=section&id=Non-GAAP%20Financial%20Measures) AudioEye utilizes non-GAAP financial measures, specifically Adjusted EBITDA and Adjusted EPS, to provide a clearer view of its core operating performance by excluding certain non-cash or non-recurring items, while also providing detailed definitions and reconciliations to GAAP measures [Use and Rationale of Non-GAAP Measures](index=5&type=section&id=Use%20and%20Rationale%20of%20Non-GAAP%20Measures) AudioEye uses non-GAAP measures like Adjusted EBITDA and Adjusted EPS to offer a consistent, period-to-period comparison of operating performance, believing they provide a more complete understanding of business trends by excluding items not reflective of core operations - **Adjusted EBITDA**, **Adjusted EBITDA margin**, and **Adjusted EPS** are used to facilitate consistent period-to-period comparison and provide a more complete understanding of factors and trends affecting the business than GAAP measures alone[16](index=16&type=chunk) - Adjustments primarily exclude recurring non-cash items (e.g., stock-based compensation, valuation adjustments) and items management does not consider in assessing ongoing operating performance (e.g., litigation expense)[16](index=16&type=chunk) - These non-GAAP measures have limitations; they are not GAAP liquidity measures, not alternatives to cash flow, and should not be considered in isolation or as substitutes for GAAP results[17](index=17&type=chunk)[18](index=18&type=chunk) [Definitions of Non-GAAP Measures](index=5&type=section&id=Definitions%20of%20Non-GAAP%20Measures) AudioEye provides specific definitions for its non-GAAP measures: Adjusted EBITDA is net loss adjusted for various non-cash and non-operating expenses, and Adjusted EPS is net loss per diluted common share similarly adjusted, including incremental shares - **Adjusted EBITDA** is defined as net 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 severance expense, plus certain acquisition expense, plus loss on disposal or impairment of long-lived assets, plus loss on extinguishment of debt, and plus lost deposit on alternative financing[19](index=19&type=chunk) - **Adjusted EBITDA margin** is Adjusted EBITDA as a percentage of GAAP revenue[19](index=19&type=chunk) - **Adjusted EPS** is defined as net loss per diluted common share, plus the same adjustments as Adjusted EBITDA (on a per share basis), and includes incremental shares in the share count that are considered anti-dilutive in a GAAP net loss position[19](index=19&type=chunk)[20](index=20&type=chunk) [Reconciliation of GAAP to Non-GAAP Measures](index=10&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Measures) The company provides a detailed reconciliation of its GAAP net loss and net loss per common share to its non-GAAP Adjusted EBITDA and Adjusted EPS for the three and six months ended June 30, 2025 and 2024 Reconciliations of GAAP to Non-GAAP Financial Measures (Unaudited, in thousands, except per share data) | Metric | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :---------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net loss (GAAP) | $(2) | $(735) | $(1,471) | $(1,564) | | Adjusted EBITDA | $1,931 | $1,472 | $3,839 | $2,389 | | Adjusted EBITDA margin | 20 % | 17 % | 20 % | 14 % | | Net loss per common share (GAAP) — diluted | $0.00 | $(0.06) | $(0.12) | $(0.13) | | Adjusted earnings per diluted share | $0.15 | $0.12 | $0.30 | $0.20 | | Diluted weighted average shares (GAAP) | 12,446 | 11,703 | 12,418 | 11,706 | | Adjusted diluted shares (Non-GAAP) | 12,660 | 12,271 | 12,620 | 12,178 | [Forward-Looking Non-GAAP Financial Measures](index=7&type=section&id=Forward-Looking%20Non-GAAP%20Financial%20Measures) AudioEye provides forward-looking non-GAAP guidance for adjusted EBITDA and adjusted EPS but does not offer quantitative reconciliations to GAAP measures due to the impracticality of prospective data and to avoid implying undue precision - The company includes forward-looking non-GAAP financial measures (**adjusted EBITDA** and **adjusted EPS guidance**) for Q3 and full year 2025, based on internal forecasts[21](index=21&type=chunk) - Quantitative reconciliations of these forward-looking non-GAAP measures to GAAP measures are not provided because the excluded items are not available on a prospective basis without unreasonable effort, and such reconciliations could imply a confusing degree of precision and certainty[21](index=21&type=chunk) [Corporate & Legal Information](index=3&type=section&id=Corporate%20%26%20Legal%20Information) [Conference Call Information](index=3&type=section&id=Conference%20Call%20Information) AudioEye announced details for its Q2 2025 earnings conference call, including the date, time, dial-in numbers, webcast link, and replay availability for investors and interested parties - AudioEye management will hold a conference call on **Thursday, August 7, 2025, at 4:30 p.m. Eastern time** to discuss the Q2 2025 results[7](index=7&type=chunk) - Participants can dial in using **888-645-4404 (U.S.)** or **862-298-0702 (International)**, or access the live webcast via the Q225 Webcast Link[7](index=7&type=chunk) - A telephonic replay will be available until **August 21, 2025**, and the audio recording will remain available on the investor relations section of the Company's website for **90 days**[8](index=8&type=chunk) [Forward-Looking Statements](index=3&type=section&id=Forward-Looking%20Statements) This section serves as a cautionary statement, indicating that any forward-looking statements regarding AudioEye's future expectations are subject to various risks and uncertainties, and the company disclaims any obligation to update them - Statements about AudioEye's future expectations, beliefs, plans, objectives, goals, prospects, financial condition, assumptions, or future events or performance are considered "**forward-looking statements**" under federal securities laws[10](index=10&type=chunk) - These statements are subject to risks, uncertainties, and other factors that could cause actual results to differ materially from what is expressed or implied[10](index=10&type=chunk) - AudioEye does not undertake any obligation to update such forward-looking statements to reflect events or uncertainties after the date of the press release[10](index=10&type=chunk) [Investor Contact](index=7&type=section&id=Investor%20Contact) Contact information for investor relations is provided for inquiries regarding AudioEye - For investor inquiries, contact **Tom Colton** at Gateway Group, Inc. via email (**AEYE@gateway-grp.com**) or phone (**949-574-3860**)[22](index=22&type=chunk)

Thirty-Eighth Consecutive Period of Record Revenue TUCSON, Ariz., Aug. 7, 2025 /PRNewswire/ -- AudioEye, Inc. (Nasdaq: AEYE) ("AudioEye" or the "Company"), the industry-leading digital accessibility company, reported financial results for the second quarter ended June 30, 2025. "We achieved our 38th sequential quarter of growth, a remarkable achievement. We expect annualized sequential revenue growth in the high teens in the second half, driven by business momentum in the United States as well as in the EU ...

Core Viewpoint - AudioEye, Inc. will hold a conference call on August 7, 2025, to discuss its financial results for Q2 2025, which ended on June 30, 2025 [1] Group 1: Conference Call Details - The conference call is scheduled for Thursday, August 7, 2025, at 4:30 p.m. Eastern Time [2] - U.S. dial-in number is 888-645-4404, and the international number is 862-298-0702 [2] - A webcast will be available live and for replay on the company's investor relations website [3] Group 2: Company Overview - AudioEye is a leader in digital accessibility, providing solutions that combine AI automation technology with expert fixes [4] - The company serves over 119,000 customers, including notable brands like Samsung, Calvin Klein, and Samsonite [4] - AudioEye holds 24 U.S. patents and offers services such as 24/7 accessibility monitoring and legal protection [4]

Company Performance - AudioEye closed at $11.59, reflecting a -1.11% change from the previous day, underperforming compared to the S&P 500's 0.14% gain [1] - Over the past month, AudioEye shares gained 3.26%, lagging behind the Computer and Technology sector's gain of 5.36% and the S&P 500's gain of 3.97% [1] Earnings Forecast - AudioEye is projected to report earnings of $0.16 per share, indicating a year-over-year growth of 33.33% [2] - Revenue is expected to be $9.94 million, representing a 17.31% increase compared to the same quarter last year [2] Annual Estimates - For the entire year, earnings are forecasted at $0.71 per share and revenue at $41.51 million, showing changes of +29.09% and +17.91% respectively compared to the previous year [3] - Recent changes to analyst estimates for AudioEye may reflect shifting business dynamics, with positive revisions seen as a favorable sign for the business outlook [3] Valuation Metrics - AudioEye has a Forward P/E ratio of 16.62, which is a discount compared to its industry's Forward P/E of 27.71 [6] - The company has a PEG ratio of 0.66, significantly lower than the Internet - Software industry's average PEG ratio of 2.15 [6] Industry Ranking - The Internet - Software industry, part of the Computer and Technology sector, holds a Zacks Industry Rank of 65, placing it in the top 27% of over 250 industries [7] - The Zacks Industry Rank measures the strength of industry groups, with the top 50% rated industries outperforming the bottom half by a factor of 2 to 1 [7]

Core Viewpoint - The article discusses the reliability of brokerage recommendations, particularly focusing on AudioEye (AEYE), and emphasizes the importance of using these recommendations in conjunction with other analytical tools like the Zacks Rank [1][5]. Group 1: Brokerage Recommendations - AudioEye has an average brokerage recommendation (ABR) of 1.20, indicating a consensus between Strong Buy and Buy, with 80% of recommendations being Strong Buy and 20% being Buy [2]. - The article highlights that brokerage firms often exhibit a positive bias in their ratings due to vested interests, leading to a disproportionate number of favorable recommendations compared to negative ones [6][10]. Group 2: Zacks Rank Comparison - The Zacks Rank categorizes stocks into five groups based on earnings estimate revisions, providing a more reliable indicator of future price performance compared to ABR [8][11]. - The Zacks Rank is updated more frequently and reflects the latest earnings estimates, making it a timely tool for predicting stock price movements [13]. Group 3: Current Performance and Outlook - The Zacks Consensus Estimate for AudioEye remains unchanged at $0.71, suggesting stable analyst views on the company's earnings prospects [14]. - Due to the unchanged consensus estimate and other factors, AudioEye holds a Zacks Rank of 3 (Hold), indicating a cautious approach despite the favorable ABR [15].