AudioEye (AEYE) Q3 2024 earnings summary

Executive summary

• Achieved record Q3 revenue of $8.93M, up 14% year-over-year, and reached the high end of guidance, with sequential growth from $8.47M to $8.93M at a 21% annualized rate.

• Adjusted EBITDA reached a record $2M with a 23% margin, up $1.7M year-over-year and 600 basis points sequentially.

• Customer count increased 18% year-over-year to approximately 126,000 as of September 30, 2024.

• Completed the accretive acquisition of ADA Site Compliance, expanding offerings and adding $2M in 2023 revenue, 70% recurring.

• Launched Accessibility Protection Status, achieved HIPAA and SOC 2 Type II certifications, and expanded partnerships with Finalsite and CivicPlus.

Financial highlights

• Q3 2024 revenue was $8.93M, up 14% year-over-year and 5% sequentially; nine-month revenue reached $25.5M, up 9% year-over-year.

• Gross margin rose to 80% in Q3, with gross profit at $7.1M, up from $6.1M in Q3 2023; nine-month gross profit was $20.1M, up 11%.

• Net loss narrowed to $1.2M ($0.10/share) in Q3 and $2.8M for nine months, both improved year-over-year.

• Adjusted EBITDA margin improved to 23% in Q3 from 17% sequentially and 4% year-over-year.

• Free cash flow was $1.6M in Q3, a record, compared to negative $200K in Q3 2023.

Outlook and guidance

• Q4 2024 revenue guidance: $9.7M–$9.8M (24% year-over-year growth); full-year 2024 revenue: $35.2M–$35.3M.

• Q4 Adjusted EBITDA guidance: $2.2M–$2.3M (23% margin); full-year Adjusted EBITDA: $6.62M–$6.72M.

• Full-year Adjusted EPS expected between $0.54–$0.55.

• Management expects continued focus on recurring revenue growth in both Partner/Marketplace and Enterprise channels.

• Company believes it has sufficient liquidity to continue as a going concern through the next twelve months.