AudioEye (AEYE) Q2 Earnings call transcript Jul 25, 2024

In the second quarter of 2024, AudioEye, a leading digital accessibility solutions provider, reported strong financial performance with a focus on growth and strategic partnerships. The company's CEO, David Moradi, and CFO, Kelly Georgevich, provided insights into AudioEye's financial health, growth prospects, and regulatory developments in the digital accessibility landscape during their earnings call.

Strong Financial Performance and Strategic Growth

AudioEye's sequential revenues grew from $8.1 million to $8.5 million, representing an annualized growth rate of 19%. The company's Annual Recurring Revenue (ARR) increased by $1.3 million, marking a 60% improvement in ARR growth compared to the previous quarter. This growth was achieved without adding additional costs, resulting in record adjusted EBITDA of approximately $1.5 million and a margin of 17%. The company also generated a record $1 million in free cash flow from operations, with expectations to achieve the Rule of 40 in the third quarter.

Regulatory Developments and Market Expansion

The earnings call highlighted significant regulatory developments in the digital accessibility space, with the Department of Justice's final rule under Title II of the Americans with Disabilities Act and the Department of Health and Human Services Office for Civil Rights' final rule under Section 504 of the Rehabilitation Act. These rules mandate that state and local government entities ensure their websites and mobile applications are accessible to people with disabilities. AudioEye is uniquely positioned to meet the increased demand for digital accessibility solutions, given its AI and human-assisted technology approach. The company aims to penetrate multiple industries under Title II and HHS, including state and local government, higher education, and healthcare, leveraging its existing partnerships.

Strategic Partnerships and Future Outlook

AudioEye's strategic partnerships with key players like Finalsite, the market share leader in K to 10 schools, demonstrate the company's focus on growth and market expansion. The goal is to penetrate Finalsite's entire customer base over the next three years, indicating a strong long-term outlook for AudioEye. The company also expects to create new partnerships in other industries under Title II and HHS, showcasing its commitment to capitalizing on the expanding digital accessibility market.

Conclusion

AudioEye's Q2 2024 earnings call presented a positive outlook for the company, with strong financial performance, strategic growth initiatives, and a focus on capitalizing on regulatory developments in the digital accessibility space. The company's strategic partnerships and growth plans, particularly with Finalsite, indicate a robust long-term strategy aimed at expanding its market presence and capitalizing on the growing demand for digital accessibility solutions. Investors and analysts should closely monitor AudioEye's future developments, including its partnership initiatives and market expansion strategies, as the company positions itself for continued growth in the digital accessibility sector.