AudioEye(AEYE) - 2024 Q2 - Quarterly Report

Revenue Growth - For the six months ended June 30, 2024, total revenue increased by 6% to $16.553 million compared to $15.608 million in the prior year[88]. - Annual Recurring Revenue (ARR) as of June 30, 2024, was approximately $33.3 million, representing a 12% year-over-year increase[79]. - The customer base grew to approximately 121,000, a 16% increase from 104,000 customers at June 30, 2023[80]. - Revenue from the Partner and Marketplace channel grew by 11% to $9.704 million for the six months ended June 30, 2024, while Enterprise channel revenue remained consistent[81]. Profitability and Loss - Gross profit for the six months ended June 30, 2024, was $13.028 million, an 8% increase from $12.119 million in the prior year[92]. - The operating loss for the six months ended June 30, 2024, was $1.128 million, a 72% improvement from a loss of $4.082 million in the prior year[88]. - The net loss for the six months ended June 30, 2024, was $1.564 million, a 61% reduction from $3.984 million in the prior year[88]. Expenses Management - Selling and marketing expenses decreased by 8% to $5.974 million for the six months ended June 30, 2024, compared to $6.496 million in the prior year[94]. - Research and development costs represented 21% of total revenue for the six months ended June 30, 2024, with a decrease of 33% from the prior year[83]. - Selling and marketing expenses decreased by 9% and 8% for the three and six months ended June 30, 2024, respectively, compared to the prior year[95]. - Research and development expenses decreased by 40% and 33% for the three and six months ended June 30, 2024, respectively, driven by lower personnel costs[97]. - Total research and development costs decreased by 34% and 27% for the three and six months ended June 30, 2024, respectively[97]. - General and administrative expenses increased by 8% for the three months ended June 30, 2024, but decreased by 5% for the six months ended June 30, 2024, compared to the prior year[100][101]. Cash Flow and Capital - Cash provided by operating activities for the six months ended June 30, 2024, was $613,000, an increase compared to $(191,000) in the prior year[111]. - Cash used in financing activities increased to $(3.728 million) for the six months ended June 30, 2024, primarily due to common stock repurchases and contingent consideration payments[113]. - As of June 30, 2024, working capital was $1.607 million, a decrease of $1.64 million from December 31, 2023, primarily due to cash used for stock repurchases[106]. - Interest expense, net for the three and six months ended June 30, 2024, was $(238,000) and $(436,000), representing a significant increase in expenses compared to the prior year[102]. Investment in Development - AudioEye continues to invest in research and development to expand its portfolio of proprietary intellectual property[75]. - The company initiated an At The Market offering, raising $663,000 by issuing 39,646 shares of common stock[108].