AudioEye, Inc.

Good day and welcome to the AudioEye third quarter 2022 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal 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 your touch-tone phone. To withdraw your question, please press star then two. Please note today's event is being recorded. I would now like to turn the conference over to Brian Protovo. Please go ahead.

Thank you, Operator. Joining us for today's call are AudioEye's 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 Chief Executive Officer, 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 10Q, and in other reports and filings with the Securities and 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 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 measure, 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.audioi.com. Now I will turn the call over to AudioEye's Chief Executive Officer, Mr. David Marotti. David?

We want to begin by discussing our positive financial results. Despite some macroeconomic headwinds, the third quarter marked the 27th straight quarter of record revenue, achieving $7.7 million which was 24% year-over-year growth. Growth margins remain consistent at 75%. Our revenue growth resulted from both our partner and marketplace channel and the enterprise channel. In addition to achieving revenue within the guidance range, we are pleased to report non-GAAP profitability of approximately 100,000. We had previously guided to near break-even in the fourth quarter, We are excited to achieve this milestone ahead of our target. Beginning in January of this year, we implemented new processes that resulted in efficiencies and reduced operating expenses as a percentage of revenue. In the quarter, we were able to drive both our GAAP and non-GAAP year-over-year operating expenses down on an absolute basis by approximately 13% and 12%, respectively, while increasing revenue by 24%. We believe this is notable given the inflationary environment most companies are facing. Cash burn also improved sequentially from 2.7 to 1.4 million, excluding non-recurring items such as litigation and stock repurchases. Cash burn, including working capital, declined to 500,000. Ellie will give further details shortly. Now I will dive a bit further into revenue and our business momentum. We added several new resellers in the quarter, while expanding revenue from existing partnerships. Partnership and marketplace channel continues to show strong demand. One of the main drivers of our high retention, despite economic uncertainty, is that we have the best offering in the market due to our industry-leading R&D investments. Like most other companies, resellers are looking for new ways to expand revenue and provide a robust offering compared to their competition. Our cost-effective and comprehensive approach to solving web accessibility issues at scale while providing services as required continues to drive our high deal-winning percentage with these sophisticated resellers. We continue to see year-over-year growth in the enterprise revenue channel as well. While we have seen some elongation in sales cycles, especially for those customers who do not yet have an accessibility solution, we continue to see high retention for existing customers. Our product is increasingly viewed as a necessity in the software stack for businesses. We have also made progress by integrating BOIA's product into our core SaaS offering, now providing new and existing AudioWire customers the option to purchase complete audit reports and site reviews. Outside of our positive financial results, there are a few other business developments I'd like to highlight. We are pleased to confirm we have migrated the remaining customers who were using the old platform to AudioEye's next-generation platform. We're excited that customers now have access to our next-gen platform's features and functionality. Platform migrations are never easy. We are especially pleased that over the last couple of years, we were able to stand up a new platform with much more functionality and scale and simultaneously migrated our existing customers and grew revenue substantially. This was a significant accomplishment, and I'd like to thank the product, engineering, and operations teams for all their hard work. In October, Senator Tammy Duckworth and Representative John Sarbanes introduced the Websites and Software Applications Accessibility Act in the United States Senate and House of Representatives. While the bill is still in draft form and changes will likely be made, the passage of the bill will put further emphasis on truly solving web accessibility. If passed, we also expect it to have a material impact on digital accessibility demand, as only 3% of websites are currently accessible. In the press release announcing the bill, AudioEye board member Tony Coelho, the author and architect of the ADA, which passed 32 years ago, had this to say. The bill is as significant as the introduction of the ADA and shows the cooperation and support from the disability community. As President Bush said on the signing of the ADA, the walls of exclusion need to be taken down. This is another step in that direction. Also in October, we announced AudioEye and a competitor have agreed to a global settlement of all pending legal disputes. We cannot comment further on this announcement, but highlight that cash burned from litigation should trend down materially over the coming quarters. You may recall in the second quarter of this year that we announced a $3 million stock repurchase program. We continue to be committed to deploying our capital in a manner that delivers the greatest value for all shareholders. We continue the buyback in the third quarter. As of September 30th, we have repurchased approximately $750,000 under the program. Moving on to guidance. We have set ourselves up for success with our growing recurring revenue base, high gross margins, and operating expense management. We continue to invest in industry-leading R&D and have heard positive feedback from many happy customers who have migrated to our next-gen platform. Simply put, we have the most effective offering on the market at the best price. We're excited to further strengthen our product offering in the near term and delight customers even more. We're guiding for revenue between $7.7 to $7.9 million in the fourth quarter, representing year-over-year growth of approximately 20% at the midpoint. We expect non-GAAP income results for the fourth quarter to remain relatively consistent with our solid results in the third quarter. We ended the third quarter well capitalized with $7.8 million of cash and have the runway to continue investing in the business for the long term. I will now turn the call over to AudioEye CFO to share further financial information. Kelly.