AudioEye(US:AEYE)2025-11-04 22:11Revenue and Growth - Total revenue for the three months ended September 30, 2025, was $10,227,000, representing a 15% increase from $8,925,000 in the same period of 2024[116]. - Annual Recurring Revenue (ARR) as of September 30, 2025, was approximately $38.7 million, reflecting a 7% year-over-year increase[107]. - Revenue from the Partner and Marketplace channel grew by 11% to $16,501,000 for the nine months ended September 30, 2025, while Enterprise channel revenue increased by 26% to $13,316,000[109]. - As of September 30, 2025, annual recurring revenue (ARR) was $38.7 million, representing a 7% year-over-year increase driven by growth in both Partner and Marketplace channel and Enterprise channel[135]. Customer Metrics - The number of customers decreased by 2% to approximately 123,000 as of September 30, 2025, down from 126,000 a year earlier[108]. Profitability - Gross profit for the three months ended September 30, 2025, was $7,915,000, an 11% increase from $7,102,000 in the prior year[120]. - The net loss for the three months ended September 30, 2025, was $554,000, a 54% improvement compared to a net loss of $1,202,000 in the same period of 2024[116]. Operating Expenses - Total operating expenses for the nine months ended September 30, 2025, were $24,288,000, a 9% increase from $22,249,000 in the same period of 2024[116]. - Selling and marketing expenses increased by 22% to $11,169,000 for the nine months ended September 30, 2025, compared to $9,122,000 in the prior year[112]. - Selling and marketing expenses increased by 16% to $3,649,000 for the three months ended September 30, 2025, and by 22% to $11,169,000 for the nine months ended September 30, 2025, compared to the prior year periods[123][124]. - Research and development expenses accounted for 16% of total revenue in the nine months ended September 30, 2025[111]. - Research and development expenses decreased by 3% to $1,118,000 for the three months ended September 30, 2025, and by 6% to $3,471,000 for the nine months ended September 30, 2025, compared to the prior year periods[125][126]. - General and administrative expenses decreased by 8% to $3,506,000 for the three months ended September 30, 2025, but increased by 16% to $10,998,000 for the nine months ended September 30, 2025, compared to the prior year periods[127][128]. Financial Position - Working capital as of September 30, 2025, was $(23,000), a decrease of $0.6 million from December 31, 2024, primarily due to a portion of the term loan classified as a current liability[136]. - The company had $4,550,000 in cash and cash equivalents as of September 30, 2025[136]. Cash Flow - In the nine months ended September 30, 2025, cash provided by operating activities increased to $2,220,000, primarily due to no payments towards contingent consideration in the current year[141]. Other Financial Metrics - The change in fair value of contingent consideration showed a significant increase of 11,150% to $(1,338,000) for the nine months ended September 30, 2025, due to a reduction in estimated earnout payable[129][130]. - Interest expense, net increased by 12% to $(236,000) for the three months ended September 30, 2025, and by 10% to $(709,000) for the nine months ended September 30, 2025, compared to the prior year periods[131][132]. Share Repurchase Program - The company adopted a share repurchase program in January 2025, authorizing the repurchase of up to $12.5 million of common stock, with $3.59 million utilized for repurchases by September 30, 2025[137].