On Tuesday, AudioEye (NASDAQ:AEYE) discussed first-quarter financial results during its earnings call. The full transcript is provided below.
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View the webcast at https://event.choruscall.com/mediaframe/webcast.html?webcastid=CiepQ3YL
Summary
AudioEye reported its 41st consecutive quarter of record revenue, achieving $10.6 million in Q1 2026, marking an 8% increase year-over-year.
The company has improved its adjusted EBITDA margins significantly, expecting margins in the high 20% range this year, with a target of $15 million run rate by the end of 2026.
AudioEye’s ARR reached $41.2 million, up 12% annually, indicating strong future revenue growth driven by compounding ARR.
The company continues to focus on strategic initiatives, including AI-driven product innovations and expanding its market presence in the EU and state and local governments.
Management transitions were announced with Kelly Djordjevic taking over as CEO, emphasizing continuity in strategic direction and operational excellence.
Full Transcript
OPERATOR
Good afternoon and welcome to AudioEye’s first-quarter 2026 earnings conference call. Joining us for today’s call are AudioEye CEO and CFO, Ms. Kelly Djordjevic and Executive Chairman and Chief Product Officer Mr. David Moratti. Following their remarks, we will open the call for questions from the Company’s publishing analysts. I would like to remind everyone that this call will be recorded and made available for replay via a link available in the Investor Relations section of the company’s website at www.audioeye.com. before I turn the call over to AudioEye’s executive chairman, the Company would like to remind all participants that statements made by AudioEye Management during the course of this conference call that are not historical facts are considered to be forward looking statements. The Private Securities Litigation Reform act of 1995 provides a safe harbor for such forward looking statements. The words believe, expect, anticipate, estimate, confident, will and other similar statements of expectation identify forward looking statements. These statements are predictions, projections or other statements about future events that are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could materially differ because of factors discussed on today’s press release, in the comments made during this conference call and in the Risk Factors section of the Company’s Annual report on Form 10K. Its quality reports on Form 10Q and its other reports and filings with the securities and Exchange Commission on this call are cautioned not to place undue reliance on these forward looking statements which reflect Management’s belief only. As of the date hereof. AudioEye does not undertake any duty to update or correct any forward looking statements. Further, Management’s remarks today will include certain non GAAP financial measures. A reconciliation of the most directly comparable GAAP financial measures to these non GAAP financial measures is available in the Company’s earnings release or otherwise posted in the Investor Relations section of its website at www.audioeye.com. now I’d like to turn the call over to AudioEye’s Executive Chairman and Chief Product Officer, Mr. David Morotti.
David Morotti
Thank you operator and good afternoon everyone. The first quarter marks the 41st consecutive quarter of record revenue, a significant achievement since over a decade ago. I began my journey with AudioEye as an investor leading a few rounds of financing for the company. Back then the Company had virtually no revenue and limited technology. Today is a different story. We have the leading product on the market and more than 127,000 customers, to our knowledge more than any other company in the industry. In 2019. I joined AudioEye, first as a consultant, then as a board member and became the Chair of the Strategic Operating Committee of the Board of Directors, tasked with improving product go-to-market margins and scale. Since then, revenues have nearly quadrupled and adjusted EBITDA margins have improved from approximately negative 70% and are expected to be in the high 20% range this year. Revenue per employee has improved from approximately 100,000 per employee in 2019 to over 400,000 per employee, around a 400% increase. Kelly has been instrumental in helping us achieve these top tier results since joining AudioEye in 2021. I’ve worked closely with Kelly for almost five years and I’m highly confident that a CEO she will lead the company through our next phase of growth and continued operating margin improvement. This was a well planned evolution that reflects the strength of what we have built and the Board of Directors and my confidence in Kelly’s ability to lead us going forward. She brings operational discipline, relationships and credibility to sustain the momentum we have. My focus going forward will be on what I love doing most long term strategy and product innovation, including AI initiatives now possible with recent LLM improvements. I’ve served as Head of product since the second half of 2023 during a period of significant innovation including our next gen platform which combines custom fixes with our industry leading AI, giving customers a complete view of their risk profile which no competitor can do today. Also, we have continued to improve our industry leading legal protection rates and the highest levels of automatic detection available, but we are not done. A recent WebAIM study shows that the Internet is becoming less accessible while litigation trends are reaching all time highs. The need to solve digital accessibility at scale has never been greater. We continue to build on our industry leading proprietary data set which was developed over 10 years on over 100,000 websites and millions of data points using our unique approach of combining AI automation with custom fixes and we are very excited about upcoming Agentic product releases as we enter this next phase of growth in AudioEye’s journey. I want to thank our team for all their hard work and determination in getting us here and in delivering an incredible product for our customers. After today’s call, I may be less visible to shareholders, but I will be hard at work in the background and leaving you in good hands with your new CEO. With that, I’ll hand it over to Kelly.
Kelly Djordjevic (Chief Executive Officer)
Thank you David Good afternoon everyone. It’s an honor to be speaking to you today in my new role as CEO and I want to echo David’s gratitude to our team and to David for the incredible work he has done, transforming AudioEye into an industry leader in digital accessibility. I look forward to building on the foundation that David and the team have created. I’ve spent five years working with David and driving change, and I’m excited about what the next phase looks like, both from an operational standpoint and from a product and market opportunity standpoint. I’ll now cover a few other business developments, Q1 2026 financial results and our updated financial outlook for Q2 and the full year 2026. The market environment continues to reinforce the need for solutions with accuracy and scale. Agentic coding solutions are driving faster web development, but are making the web less accessible. As David mentioned, the 2026 WebAIM Million Report found 95.9% of the top 1 million homepages had detectable WCAG failures averaging 56.1 errors per page, a 10% increase over the prior year that reversed six consecutive years of gradual improvement. WebAIM attributes the decline to broader shifts in web development including increased reliance on third party frameworks and AI assisted coding. This is driving accessibility related litigation to reach all time highs. This environment positions AudioEye as a leader with over a decade of proprietary data and billions of data points. We have the depth, expertise and scale to address accessibility challenges and to help customers manage the legal risk they face in a way no other solution can currently match. We continue to see strong feedback and engagement with our next generation platform introduced earlier this year. We built this platform to give customers full visibility into the thousands of fixes AudioEye completes on their …
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