AudioEye, Inc.

Good afternoon and welcome to Audio Eye Inc's Quarter 2022 Earnings Call. All participants will be in a listen-only mode. Should you need assistance, please sign up a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on a touch-tone phone. To withdraw your question, please press Start and 2. Please note, this event is being recorded. I would now like to turn the conference over to Brian Poinovu. Please go ahead.

Thank you, Operator. Joining us for today's call are AudioEyes CEO, Mr. David Marotti, and CFO, Ms. Kelly Georgievich. 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 CEO, 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 and are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could materially differ because of factors discussed in today's press release and the comments made during this conference call and in the risk factors section of the company's annual report on Form 10-K, its quarterly reports on Form 10-Q, and in its other reports and filings with the Securities Exchange Commission. Participants 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 posted in the investor relations section of our website at www.audioeye.com. Now, I'd like to turn the call over to AudioEye's Chief Executive Officer, Mr. David Marotti. Sir, the floor is yours.

Thank you, Brian. Welcome, everyone, and thank you for joining us. Earlier this afternoon, we issued a press release announcing our results for the second quarter that ended June 30, 2022. You can find the press release on our website's investor relations section at www.idoy.com. We're excited to share the progress we have made in the quarter and would like to begin by discussing our strong financial results. Our second quarter revenue is at the high end of the guidance range we provided last quarter at $7.6 million. Revenue growth continues to accelerate, with the second quarter representing 26% year-over-year growth. Revenue growth resulted from continued expansion in our partnership and marketplace channel, which I will discuss in more detail, organic growth in our enterprise sales channel, and revenue from our acquisition of the Bureau of Internet Accessibility. We are pleased with the integration of BOIA into AudioEye, which is performing within expectations. In addition to achieving the high end of guidance, we are pleased to report our second quarter non-GAAP per share operating loss was reduced to two cents in the quarter. The improvement is primarily the result of increased revenue and efficiencies coupled with expense management. Annual recurring revenue, or ARR, ended the quarter at 28.7 million, up 19% versus the comparable year-ago period. The increase was driven by growth across all channels. ARR was affected by the timing of enterprise deals at the end of the quarter and the culling of lower profit margin accounts. In addition to the solid financial results in the quarter, we recently announced two new partnerships I would like to highlight. In July, we formally announced new partnerships with Celerent and Mendosta. Sellerant is a leading provider of omni-channel retail point of sale solutions, which processes over 2.5 billion annual retail sales. Vendasta is a leading platform for local experts who sell digital solutions to small and medium businesses, with a network of more than 65,000 partners serving over 6 million SMBs. These opportunities have significant potential and further validate that our product offering is best on the market and that our strategic approach to revenue growth through partnerships is working. Our cost-effective and comprehensive approach to solving web accessibility issues at scale is driving our high deal-winning percentage with these sophisticated and discerning resellers and platforms. Sellerant previously used the vendor and had this to say. AudioEye quickly showed us that they are a partner that cares about us as well as our clients to deliver custom accessible experiences to those that need them. While many make these claims, AudioEye's world-class technology paired with certified accessibility and legal experts make them stand out as a partner we can trust. The last development on the partnership side I would like to touch on is the progress on the digital agency negotiation I discussed in the previous earnings call. In the first quarter of 2022, our customer count decreased due to renegotiations with digital agency upgrading from a basic tier to a more advanced offering. We are pleased to confirm that a new agreement has been signed with this agency. The new deal is a win for all parties. We expect more of their customers to deploy and benefit from our accessibility solution, and ARR will be materially higher over time than in the prior agreements. In the second quarter, we announced a $3 million stock repurchase program. The program is authorized for the second quarter of 2024. We are committed to deploying our capital in a manner that delivers the greatest value for all shareholders. We are hard-pressed to find many opportunities that represent higher return potential than our common shares when looking at our growth prospects and what similar companies are being valued at in the private markets. As of June 30, 2022, we have repurchased approximately $410,000 under the program. Moving on to guidance. We're guiding for revenue of between $7.65 and $7.85 million in the third quarter, representing year-over-year growth of approximately 25% at the midpoint. In the second quarter, our operating loss excluding non-recurring items and non-gap adjustments was reduced to approximately $250,000, a substantial sequential improvement. We expect operating loss, excluding non-recurring items, to remain stable in the third quarter and near break-even by the fourth quarter. We end the second quarter well-capitalized with over $9 million of cash on June 30th and have the runway to continue investing in the business for the long term. I will now turn the call over to AudioEye CFO Kelly Georgievich. Kelly.