AUDIOEYE INC (AEYE)
SIC breadcrumb: Services > Business Services > SIC 7372 Services-Prepackaged Software
SEC company page: https://www.sec.gov/edgar/browse/?CIK=1362190. Latest filing source: 0001104659-26-027159.
Selected Fundamentals
| Metric | Value | Unit | FY | Filed |
|---|---|---|---|---|
| Revenue | 40,311,000 | USD | 2025 | 2026-03-12 |
| Net income | -3,077,000 | USD | 2025 | 2026-03-12 |
| Assets | 32,230,000 | USD | 2025 | 2026-03-12 |
Financials
Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-03-12. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001362190.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts.
| Metric | 2013 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | 338,863 | 2,739,439 | 5,660,427 | 10,765,000 | 20,475,000 | 24,503,000 | 29,913,000 | 31,316,000 | 35,201,000 | 40,311,000 | ||
| Net income | -9,578,630 | -5,607,839 | -5,019,874 | -7,783,000 | -7,158,000 | -14,209,000 | -10,433,000 | -5,872,000 | -4,254,000 | -3,077,000 | ||
| Operating income | -4,478,214 | -4,518,646 | -4,573,820 | -7,818,000 | -7,133,000 | -15,513,000 | -10,429,000 | -5,965,000 | -3,390,000 | -1,830,000 | ||
| Gross profit | -232,056 | 1,355,294 | 3,033,612 | 6,359,000 | 14,514,000 | 18,382,000 | 22,694,000 | 24,342,000 | 27,940,000 | 31,556,000 | ||
| Diluted EPS | -0.77 | -1.29 | -0.91 | -0.50 | -0.36 | -0.25 | ||||||
| Operating cash flow | -2,340,281 | -1,622,719 | -1,643,854 | -5,617,000 | -1,906,000 | -4,980,000 | -4,999,000 | 318,000 | 2,731,000 | 4,753,000 | ||
| Capital expenditures | 0.00 | 41,167 | 10,893 | 56,000 | 0.00 | 82,000 | 72,000 | 171,000 | 128,000 | 54,000 | ||
| Share buybacks | 573,022 | 0.00 | 756,000 | 1,122,000 | 2,016,000 | 4,575,000 | ||||||
| Assets | 4,488,600 | 5,034,388 | 9,104,079 | 9,152,000 | 18,254,000 | 29,313,000 | 24,428,000 | 25,495,000 | 29,766,000 | 32,230,000 | ||
| Liabilities | 4,181,363 | 4,338,377 | 3,229,177 | 7,586,000 | 10,620,000 | 11,716,000 | 13,839,000 | 18,788,000 | 20,330,000 | 27,426,000 | ||
| Stockholders' equity | 307,237 | 696,011 | 5,876,000 | 1,566,000 | 7,634,000 | 17,597,000 | 10,589,000 | 6,707,000 | 9,436,000 | 4,804,000 | ||
| Cash and cash equivalents | 1,409,418 | 1,960,430 | 5,742,000 | 1,972,000 | 9,095,000 | 18,966,000 | 6,904,000 | 9,236,000 | 5,651,000 | 5,288,000 | ||
| Free cash flow | -2,340,281 | -1,663,886 | -1,654,747 | -5,673,000 | -1,906,000 | -5,062,000 | -5,071,000 | 147,000 | 2,603,000 | 4,699,000 |
Ratios
| Metric | 2013 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Net margin | -88.68% | -72.30% | -34.96% | -57.99% | -34.88% | -18.75% | -12.08% | -7.63% | ||||
| Operating margin | -80.80% | -72.62% | -34.84% | -63.31% | -34.86% | -19.05% | -9.63% | -4.54% | ||||
| Return on equity | -85.43% | -497.00% | -93.76% | -80.75% | -98.53% | -87.55% | -45.08% | -64.05% | ||||
| Return on assets | -111.39% | -55.14% | -85.04% | -39.21% | -48.47% | -42.71% | -23.03% | -14.29% | -9.55% | |||
| Liabilities / equity | 13.61 | 6.23 | 0.55 | 4.84 | 1.39 | 0.67 | 1.31 | 2.80 | 2.15 | 5.71 | ||
| Current ratio | 0.35 | 0.49 | 2.22 | 0.83 | 1.62 | 2.21 | 1.17 | 1.28 | 1.05 | 0.88 |
Financial Charts
Quarterly
Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-12. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001362190.json.
| Quarter | End Date | Revenue | Net Income | Diluted EPS | Method |
|---|---|---|---|---|---|
| 2017-Q3 | 2017-09-30 | 0.00 | reported discrete quarter | ||
| 2018-Q3 | 2018-09-30 | -0.19 | reported discrete quarter | ||
| 2021-Q3 | 2021-09-30 | -0.41 | reported discrete quarter | ||
| 2022-Q1 | 2022-03-31 | -0.32 | reported discrete quarter | ||
| 2022-Q2 | 2022-06-30 | -0.23 | reported discrete quarter | ||
| 2022-Q3 | 2022-09-30 | -0.20 | reported discrete quarter | ||
| 2023-Q1 | 2023-03-31 | -0.17 | reported discrete quarter | ||
| 2023-Q2 | 2023-03-31 | -2,011,000 | reported discrete quarter | ||
| 2023-Q2 | 2023-06-30 | 7,836,000 | -0.17 | reported discrete quarter | |
| 2023-Q3 | 2023-06-30 | -1,973,000 | reported discrete quarter | ||
| 2023-Q3 | 2023-09-30 | 7,838,000 | -0.11 | reported discrete quarter | |
| 2023-Q4 | 2023-12-31 | 7,870,000 | -533,000 | derived Q4 = FY annual - nine-month YTD | |
| 2024-Q1 | 2024-03-31 | 8,083,000 | -829,000 | -0.07 | reported discrete quarter |
| 2024-Q2 | 2024-03-31 | -829,000 | reported discrete quarter | ||
| 2024-Q2 | 2024-06-30 | 8,470,000 | -0.06 | reported discrete quarter | |
| 2024-Q3 | 2024-06-30 | -735,000 | reported discrete quarter | ||
| 2024-Q3 | 2024-09-30 | 8,925,000 | -0.10 | reported discrete quarter | |
| 2024-Q4 | 2024-12-31 | 9,723,000 | -1,488,000 | derived Q4 = FY annual - nine-month YTD | |
| 2025-Q1 | 2025-03-31 | 9,733,000 | -1,469,000 | reported discrete quarter | |
| 2025-Q2 | 2025-03-31 | -1,469,000 | reported discrete quarter | ||
| 2025-Q2 | 2025-06-30 | 9,857,000 | reported discrete quarter | ||
| 2025-Q3 | 2025-06-30 | -2,000 | reported discrete quarter | ||
| 2025-Q3 | 2025-09-30 | 10,227,000 | reported discrete quarter | ||
| 2025-Q4 | 2025-12-31 | 10,494,000 | -1,052,000 | derived Q4 = FY annual - nine-month YTD | |
| 2026-Q1 | 2026-03-31 | 10,553,000 | -2,114,000 | reported discrete quarter |
Quarterly Charts
Macro Cross-References
- CPIAUCSL - Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
- UNRATE - Unemployment Rate
- FEDFUNDS - Federal Funds Effective Rate
- CES0500000003 - Average Hourly Earnings of All Employees, Total Private
- DFEDTARU - Federal Funds Target Range - Upper Limit
- DFEDTARL - Federal Funds Target Range - Lower Limit
- DGS3MO - Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
- DGS2 - Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
- DGS10 - Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
- DGS30 - Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
- T10Y2Y - 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
- CPILFESL - Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
- CPIUFDSL - Consumer Price Index for All Urban Consumers: Food
- CPIENGSL - Consumer Price Index for All Urban Consumers: Energy
- CUSR0000SAH1 - Consumer Price Index for All Urban Consumers: Shelter
- PCEPI - Personal Consumption Expenditures: Chain-type Price Index
- PCEPILFE - Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
- PPIACO - Producer Price Index by Commodity: All Commodities
- T10YIE - 10-Year Breakeven Inflation Rate
- U6RATE - Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
- PAYEMS - All Employees, Total Nonfarm
- CIVPART - Labor Force Participation Rate
- EMRATIO - Employment-Population Ratio
- UNEMPLOY - Unemployed
- CE16OV - Employment Level
- ICSA - Initial Claims
- JTSJOL - Job Openings: Total Nonfarm
- JTSQUR - Quits: Total Nonfarm
- GDPC1 - Real Gross Domestic Product
- A191RL1Q225SBEA - Real Gross Domestic Product: Percent Change from Preceding Period
- INDPRO - Industrial Production: Total Index
- TCU - Capacity Utilization: Total Index
- HOUST - New Privately-Owned Housing Units Started: Total Units
- PERMIT - New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
- RSAFS - Advance Retail Sales: Retail Trade
- PCE - Personal Consumption Expenditures
- DSPIC96 - Real Disposable Personal Income
- PSAVERT - Personal Saving Rate
- M2SL - M2
- BOPGSTB - U.S. International Trade in Goods and Services: Balance
- MSPUS - Median Sales Price of Houses Sold for the United States
- HSN1F - New One Family Houses Sold: United States
- RHORUSQ156N - Homeownership Rate in the United States
- TTLCONS - Total Construction Spending: Total Construction in the United States
- RRVRUSQ156N - Rental Vacancy Rate in the United States
- TOTALSL - Total Consumer Credit Owned and Securitized
- REVOLSL - Revolving Consumer Credit Owned and Securitized
- DRCCLACBS - Delinquency Rate on Credit Card Loans, All Commercial Banks
- GDP - Gross Domestic Product
- GPDI - Gross Private Domestic Investment
- GCE - Government Consumption Expenditures and Gross Investment
- PCEC - Personal Consumption Expenditures
- NETEXP - Net Exports of Goods and Services
- GFDEBTN - Federal Debt: Total Public Debt
- GFDEGDQ188S - Federal Debt: Total Public Debt as Percent of Gross Domestic Product
- FYFSD - Federal Surplus or Deficit
- FGRECPT - Federal Government Current Receipts
- FGEXPND - Federal Government: Current Expenditures
- MANEMP - All Employees, Manufacturing
- USCONS - All Employees, Construction
- USTRADE - All Employees, Retail Trade
- USFIRE - All Employees, Financial Activities
- USGOVT - All Employees, Government
- AWHAETP - Average Weekly Hours of All Employees, Total Private
- DGORDER - Manufacturers' New Orders: Durable Goods
- NEWORDER - Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft
- BUSINV - Total Business Inventories
- EXPGS - Exports of Goods and Services
- IMPGS - Imports of Goods and Services
- IR - Import Price Index (End Use): All Commodities
- PPIFIS - Producer Price Index by Commodity: Final Demand
Latest quarter (10-Q)
Latest 10-Q source: 0001104659-26-059498.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following Management’s Discussion and Analysis of Financial Condition and Results of Operations, or MD&A, should be read in conjunction with our consolidated financial statements and related notes in Part I, Item 1 of this report. As used in this quarterly report, the terms “we,” “us,” “our” and similar references refer to AudioEye, Inc., unless otherwise indicated. Cautionary Note Regarding Forward-Looking Statements This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the federal securities laws, including Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). In some cases, you may be able to identify forward-looking statements by terms such as “may,” “should,” “will,” “forecasts,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “projects,” “potential” or “continue,” the negative of these terms and other similar expressions that predict or indicate future events or trends or that are not statements of historical matters. These forward-looking statements relate to our future plans, objectives, expectations, intentions and financial performance and the assumptions that underlie these statements, and are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions and speak only as of the date on which they are made. Because these forward-looking statements involve known and unknown risks and uncertainties, there are important factors that could cause actual results, events or developments to differ materially from those expressed or implied by these forward-looking statements, including our plans, objectives, expectations and intentions and other factors discussed in “Part I, Item 1A. Risk Factors” contained in our most recent Annual Report on Form 10-K and any subsequent Quarterly Reports on Form 10-Q. Risk factors that could cause actual results to differ from those contained in the forward-looking statements include but are not limited to risks related to: ● the uncertain market acceptance of our existing and future products; ● our need for, and the availability of, additional capital in the future to fund our operations and the development of new products; ● the success, timing and financial consequences of new strategic relationships, acquisitions or licensing agreements we may enter into; ● rapid changes in Internet-based applications that may affect the utility and commercial viability of our products; ● the timing and magnitude of expenditures we may incur in connection with our ongoing product development activities; ● judicial applications of accessibility laws to the internet; ● the level of competition from our existing competitors and from new competitors in our marketplace; and ● the regulatory environment for our products and services. Readers of this report are cautioned not to rely on these forward-looking statements, since there can be no assurance that these forward-looking statements will prove to be accurate. Forward-looking statements speak only as of the date they are made, and we expressly disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. You are advised, however, to consult any further disclosures we make on related subjects in our subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. This cautionary note is applicable to all forward-looking statements contained in this report. 15 Table of Contents AudioEye Solutions At its core, AudioEye’s offering provides ongoing testing, automated fixes, and 24/7 monitoring that continually improves conformance with Web Content Accessibility Guidelines (“WCAG”). This in turn helps businesses and organizations comply with WCAG standards as well as applicable U.S. and foreign accessibility laws. Our technology is capable of immediately identifying and fixing most of the common accessibility errors and addresses a wide range of disabilities including dyslexia, color blindness, epilepsy and more. AudioEye also offers additional solutions to provide for enhanced compliance and accessibility, including periodic auditing, custom fixes by experts, and legal support services. Our solutions may be purchased through a subscription service on a month-to-month basis or with one or multi-year terms. We also offer PDF remediation services and mobile application and audit reporting services to help our customers with their digital accessibility needs. Intellectual Property Our intellectual property is primarily comprised of copyrights, trademarks, trade secrets, issued patents and pending patent applications. We have a patent portfolio comprised of twenty-six (26) issued patents in the United States and three (3) pending US patent applications. The commercial value of these patents is unknown. We plan to continue to invest in research and development and expand our portfolio of proprietary intellectual property. Our Annual Report filed on Form 10-K for the year ended December 31, 2025 as filed with the SEC on March 12, 2026 provides additional information about our business and operations. Executive Overview AudioEye is an industry-leading digital accessibility platform delivering Americans with Disabilities Act (“ADA”) and WCAG compliance at scale. Our solutions advance accessibility with patented technology that reduces barriers, expands access for individuals with disabilities, and enhances the user experience for a broader audience. In the three months ended March 31, 2026, we continued to focus on product innovation and expanding revenue. We have two sales channels to deliver our product, the Partner and Marketplace channel and the Enterprise channel. AudioEye continues to focus on recurring revenue growth in both channels, while still offering our website and mobile application reporting services and PDF remediation services that provide non-recurring revenue. In the three months ended March 31, 2026, total revenue increased by 8% over the prior year comparable period. As of March 31, 2026, Annual Recurring Revenue (“ARR”) was approximately $41.2 million, which represented an increase of 11% year-over-year. Refer to “Other Key Operating Metrics” below for details on how we calculate ARR. As of March 31, 2026, AudioEye had approximately 127,000 customers, a 7% increase from 119,000 customers at March 31, 2025. The increase in customer count was attributable to an increase in our Partner and Marketplace channel customers. In the three months ended March 31, 2026, revenue from our Partner and Marketplace channel grew 8% over the prior year comparable period. The Partner and Marketplace channel represented about 59% of ARR as of March 31, 2026. In three months ended March 31, 2026, total Enterprise channel revenue grew 9% over the prior year comparable period. The Enterprise channel represented about 41% of ARR as of March 31, 2026. We had one customer (including the customer’s affiliates reflecting multiple contracts and a partnership with the Company) which accounted for approximately 13% and 14% of our total revenue in the three months ended March 31, 2026 and 2025, respectively. The Company continued to invest in research and development in the first quarter of 2026. Total research and development cost, as defined under the “Research and Development Expenses” section in the “Results of Operations” below, was 15% of total revenue in the three months ended March 31, 2026. Total research and development cost in the three months ended March 31, 2026 decreased from the prior year comparable period due to lower personnel cost. In the three months ended March 31, 2026, both selling and marketing expense and general and administrative expense increased from the prior year comparable period. The increase in selling and marketing expense was mainly driven by higher third-party marketing 16 Table of Contents expenses and personnel costs. The increase in general and administrative expenses in the three months ended March 31, 2026 was due primarily to higher litigation, stock compensation and amortization expense. We provide further commentary on our Results of Operations below. Results of Operations Our unaudited consolidated financial statements are stated in United States Dollars and are prepared in accordance with United States Generally Accepted Accounting Principles (“U.S. GAAP” or “GAAP”). The discussion of the results of our operations compares the three months ended March 31, 2026 with the three months ended March 31, 2025. Our results of operations in these interim periods are not necessarily indicative of the results which may be expected for any subsequent period. Due to rounding, numbers presented throughout this document may not add up precisely to the totals provided and percentages may not precisely reflect the absolute figures. Three months ended March 31, Change (in thousands) 2026 2025 $ % Revenue $ 10,553 $ 9,733 $ 820 8 % Cost of revenue 2,301 1,995 306 15 % Gross profit 8,252 7,738 514 7 % Operating expenses: Selling and marketing 3,852 3,714 138 4 % Research and development 1,110 1,153 (43) (4) % General and administrative 5,173 3,761 1,412 38 % Change in fair value of contingent consideration — 50 (50) (100) % Total operating expenses 10,135 8,678 1,457 17 % Operating loss (1,883) (940) (943) 100 % Other expense: Interest expense, net (231) (229) (2) 1 % Loss on extinguishment of debt — (300) 300 (100) % Total other expense (231) (529) 298 (56) % Net loss $ (2,114) $ (1,469) $ (645) 44 % Revenue The following table presents our revenues disaggregated by sales channel: Three months ended March 31, Change (in thousands) 2026 2025 $ % Partner and Marketplace $ 5,971 $ 5,520 $ 451 8 % Enterprise 4,582 4,213 369 9 % Total revenues $ 10,553 $ 9,733 $ 820 8 % The Partner and Marketplace channel consists of our Content Management System (“CMS”) partners, platform & agency partners, authorized resellers and the Marketplace. This channel serves small and medium sized businesses that are on a partner or reseller’s web-hosting platform or that purchase our solutions from our Marketplace. The Enterprise channel consists of our larger customers and organizations, including those with non-platform custom websites, who generally engage directly with AudioEye sales personnel for custom pricing and solutions. This channel also includes federal, state and local government agencies. For the three months ended March 31, 2026, total revenue increased by 8% over the prior year comparable period. The 8% increase in Partner and Marketplace channel revenue for the three months ended March 31, 2026 was primarily due to continued expansion with 17 Table of Contents existing partners. The 9% increase in Enterprise channel revenue for the three months ended March 31, 2026 was driven primarily by new customer relationships, including additions from acquisitions. Cost of Revenu [Excerpt truncated for page length; source filing is linked above.]
Latest 10-K MD&A
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion should be read in conjunction with our audited consolidated financial statements and the related notes for the years ended December 31, 2025 and 2024 that appear elsewhere in this annual report on Form 10-K. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to such differences include but are not limited to those discussed below and elsewhere in this annual report on Form 10-K, particularly in “Risk Factors.” The forward-looking statements included in this annual report on Form 10-K are made only as of the date hereof. Executive Overview AudioEye is an industry-leading digital accessibility platform delivering Americans with Disabilities Act (“ADA”) and Web Content Accessibility Guidelines (“WCAG”) compliance at scale. Our solutions advance accessibility with patented technology that reduces barriers, expands access for individuals with disabilities, and enhances the user experience for a broader audience. In 2025, we continued to focus on product innovation and expanding revenue. We have two sales channels to deliver our product, the Partner and Marketplace channel and the Enterprise channel. AudioEye continues to focus on recurring revenue growth in both channels, while still offering our website and mobile application reporting services and PDF remediation services that provide non-recurring revenue. For the year ended December 31, 2025, total revenue increased by 15% over the prior year. As of December 31, 2025, Annual Recurring Revenue (“ARR”) was approximately $40.0 million, which represented an increase of 9% from December 31, 2024. Refer to “Other Key Operating Metrics” below for details on how we calculate ARR. As of December 31, 2025, AudioEye had approximately 131,000 customers, an increase from 127,000 customers at December 31, 2024. The increase in customer count was attributable to an increase in customers in our Partner and Marketplace channel. In the twelve months ended December 31, 2025, revenue from our Partner and Marketplace channel grew 10% over the prior year. This channel represented about 58% of ARR at December 31, 2025. In the twelve months ended December 31, 2025, total Enterprise channel revenue increased by 21% over the prior year. The Enterprise channel represented about 42% of ARR at December 31, 2025. We had one major customer (including the customer’s affiliates reflecting multiple contracts and a partnership with the Company) which accounted for approximately 13% and 15% of our revenue in the years ended December 31, 2025 and 2024, respectively. The Company continued to invest in research and development in 2025. Total research and development cost, as defined under the “Research and Development” section in the “Results of Operations” below, was 16% of total revenue in 2025. Total research and development cost decreased from the prior year due to lower personnel cost. For the year ended December 31, 2025, both selling and marketing expense and general and administrative expense increased over the prior year. The increase in selling and marketing expense was mainly driven by higher investment in third-party marketing services. The increase in general and administrative expense for the year ended December 31, 2025 was due primarily to higher amortization expense associated with our intangible assets, as well as increases in personnel costs, including stock compensation expense, and litigation expenses. We provide further commentary on our Results of Operation below. 21 Table of Contents Results of Operations Our consolidated financial statements are stated in United States Dollars and are prepared in accordance with United States Generally Accepted Accounting Principles (“U.S. GAAP” or “GAAP”). The discussion of the results of our operations compares the year ended December 31, 2025 with the year ended December 31, 2024. Our results of operations in these periods are not necessarily indicative of the results which may be expected for any subsequent period. Due to rounding, numbers presented throughout this document may not add up precisely to the totals provided and percentages may not precisely reflect the absolute figures. Year ended December 31, Change (in thousands) 2025 2024 $ % Revenue $ 40,311 $ 35,201 $ 5,110 15 % Cost of revenue 8,755 7,261 1,494 21 % Gross profit 31,556 27,940 3,616 13 % Operating expenses: Selling and marketing 14,897 12,668 2,229 18 % Research and development 4,590 5,077 (487) (10) % General and administrative 15,249 13,445 1,804 13 % Change in fair value of contingent consideration (1,350) 140 (1,490) (1,064) % Total operating expenses 33,386 31,330 2,056 7 % Operating loss (1,830) (3,390) 1,560 (46) % Other expense: Interest expense, net (947) (864) (83) 10 % Loss on extinguishment of debt (300) — (300) 100 % Total other expense (1,247) (864) (383) 44 % Net loss $ (3,077) $ (4,254) $ 1,177 (28) % Revenue The following table presents our revenues disaggregated by sales channel: Year ended December 31, Change (in thousands) 2025 2024 $ % Partner and Marketplace $ 22,233 $ 20,249 $ 1,984 10 % Enterprise 18,078 14,952 3,126 21 % Total revenue $ 40,311 $ 35,201 $ 5,110 15 % The Partner and Marketplace channel consists of our CMS partners, platform & agency partners, authorized resellers and the Marketplace. This channel serves small and medium sized businesses that are on a partner or reseller’s web-hosting platform or that purchase our solutions from our Marketplace. The Enterprise channel consists of our larger customers and organizations, including those with non-platform custom websites, who generally engage directly with AudioEye sales personnel for custom pricing and solutions. This channel also includes federal, state and local government agencies. For the year ended December 31, 2025, total revenue increased by 15% over the prior year. The 10% increase in Partner and Marketplace channel revenue was the result of continued expansion with existing partners and the execution of new partnerships agreements in the year. The 21% increase in Enterprise channel revenue was driven primarily by new customer relationships, including from our expansion into the European Union. 22 Table of Contents Cost of Revenue and Gross Profit Year ended December 31, Change (in thousands) 2025 2024 $ % Revenue $ 40,311 $ 35,201 $ 5,110 15 % Cost of revenue 8,755 7,261 1,494 21 % Gross profit $ 31,556 $ 27,940 $ 3,616 13 % Cost of revenue consists primarily of compensation and related benefits costs for our customer experience team, as well as a portion of our technology operations team that supports the delivery of our services, fees paid to our managed hosting and other third-party service providers, amortization of capitalized software development costs and patent costs, and allocated overhead costs. For the year ended December 31, 2025, cost of revenue increased by 21% over the prior year. The increase in cost of revenue was primarily due to increased costs incurred for service delivery, which were in line with the increase in revenue, and higher amortization expense related to our capitalized software development costs. For the year ended December 31, 2025, gross profit increased by 13% over the prior year. The increase in gross profit was a result of increased revenue. Selling and Marketing Expenses Year ended December 31, Change (in thousands) 2025 2024 $ % Selling and marketing $ 14,897 $ 12,668 $ 2,229 18 % Selling and marketing expenses consist primarily of compensation and benefits related to our sales and marketing staff, as well as third-party advertising and marketing expenses. For the year ended December 31, 2025, selling and marketing expenses increased by 18% over the prior year. The increase in selling and marketing expenses resulted primarily from higher investment in third-party marketing services and higher personnel costs. Research and Development Expenses Year ended December 31, Change (in thousands) 2025 2024 $ % Research and development expense $ 4,590 $ 5,077 $ (487) (10) % Plus: Capitalized research and development cost 1,876 1,771 105 6 % Total research and development cost $ 6,466 6,848 $ (382) (6) % Research and development (“R&D”) expenses consist primarily of compensation and related benefits related to our employees involved in research and development activities. Total research and development cost includes the amount of research and development expense reported within operating expenses as well as development cost that was capitalized during the fiscal period. For the year ended December 31, 2025, R&D expenses decreased by 10% from the prior year. This decrease was driven by lower personnel cost resulting from a reduction in headcount. For the year ended December 31, 2025, capitalized R&D cost increased by 6% from the prior year. The increase in capitalized R&D cost was the result of engineering personnel spending more time on product development than in previous year. Total R&D cost, which includes both R&D expenses and capitalized R&D costs, decreased 6% from 2024 to 2025. General and Administrative Expenses Year ended December 31, Change (in thousands) 2025 2024 $ % General and administrative $ 15,249 $ 13,445 $ 1,804 13 % 23 Table of Contents General and administrative expenses consist primarily of compensation and benefits related to our executives, directors and corporate support functions, general corporate expenses including legal fees, occupancy and transaction costs. For the year ended December 31, 2025, general and administrative expenses increased by 13% over the prior year. The increase in general and administrative expenses was due primarily to higher amortization expense associated with our intangible assets, as well as higher personnel cost, including stock compensation expense, and an increase in litigation expense by $715,000. Change in Fair Value of Contingent Consideration Year ended December 31, Change (in thousands) 2025 2024 $ % Change in fair value of contingent consideration $ (1,350) $ 140 $ (1,490) (1,064) % Change in fair value of contingent consideration consists of non-cash valuation adjustments to contingent consideration liabilities recognized in connection with a business combination or an asset acquisition. For the year ended December 31, 2025, the change in fair value of contingent consideration was due to a reduction in the estimated earnout payable in connection with the acquisition of ADA Site Compliance. We do not expect further changes in fair value of contingent consideration associated with ADA Site Compliance in future periods. Interest Expense, Net Year ended December 31, Change (in thousands) 2025 2024 $ % Interest expense, net $ (947) $ (864) $ (83) 10 % Interest expense, net consists primarily of interest on our term loan, offset by interest income from investment in money market funds. For the year ended December 31, 2025, interest expense, net increased by 10% over the prior year. The increase in interest expense, net was primarily attributable to a reduction in interest income from investment in money market funds. Loss on Extinguishment of Debt Year ended December 31, Change (in thousands) 2025 2024 $ % Loss on extinguishment of debt $ (300) $ — $ (300) 100 % On March 31, 2025, upon entering into a new credit facility with Western Alliance Bank, the Company paid the full $7.0 million in outstanding principal on its previous term loan with SG Credit Partners. For the year ended December 31, 2025, in connection with the termination of this term loan, we recognized a $300,000 loss on extinguishment of debt, which included $144,000 in prepayment and other fees and the unamortized portion of related debt discount and debt issuance costs. Other Key Operating Metrics We consider annual recurring revenue (“ARR”) as a key operating metric and a key indicator of our overall business. We also use ARR as one of the primary methods for planning and forecasting overall expectations and for evaluating, on at least a quarterly and annual basis, actual results against such expectations. We define ARR as the sum of (i) for our Enterprise channel, the total of the annualized recurring fee at the date of determination under each active contract, plus (ii) for our Partner and Marketplace channel, the annual or monthly recurring fee for all active customers at the date of determination, in each case, assuming no changes to the subscription, multiplied by 12 if applicable. Recurring fees are defined as revenues expected to be generated from services typically offered as a subscription service or annual service offering such as our automation and platform, periodic auditing, human-assisted technological fixes, legal support and professional service offerings and other services that reoccur on a multi-year contract. This determination includes both annual and monthly contracts for recurring products. Some of our contracts are terminable prior to the expected term, which may impact future ARR. ARR excludes non-recurring fees, which are defined as revenue expected to be generated from services typically not offered as a subscription service or annual 24 Table of Contents service offering such as our PDF remediation services business, one-time mobile application reports, and other miscellaneous services that are offered as non-subscription services or are expected to be one-time in nature. As of December 31, 2025, ARR was $40.0 million, which represents an increase of 9% year-over-year, driven by growth in both our Partner and Marketplace channel and Enterprise channel. Liquidity and Capital Resources Working Capital (in thousands) December 31, 2025 December 31, 2024 Current assets $ 12,622 $ 12,120 Current liabilities (14,416) (11,571) Working capital $ (1,794) $ 549 As of December 31, 2025, we had $5.3 million in cash and cash equivalents, and working capital of ($1,794,000). The $2.3 million decrease in working capital in 2025 was primarily due to an increase in deferred revenue associated with new customers, accrued liabilities related to asset acquisitions, and a portion of our term loan being classified as a current liability. In January 2025, the Board of Directors adopted a share repurchase program authorizing the repurchase of up to $12.5 million of our common stock through January 24, 2027. The program may be amended, suspended, or discontinued at any time and does not commit the Company to repurchase any shares of its common stock. Shares repurchased under the program are subsequently retired and restored to the status of authorized but unissued shares of common stock. In the year ended December 31, 2025, we used $4.57 million of the program to repurchase shares. As of December 31, 2025, we had $7.93 million remaining for the repurchase of shares. As of December 31, 2025, we had $13.4 million outstanding under the term loan, $12.9 million of which is classified as a noncurrent liability. The term loan matures on March 31, 2030, and requires quarterly principal payments due beginning on April 10, 2026. Refer to Note 6 – Debt to our consolidated financial statements for additional information regarding our credit facility. As of March 12, 2026, we have no off-balance sheet arrangements, and we believe that the Company has sufficient liquidity to continue as a going concern through the next twelve months. We expect to continue to invest in our product and in sales and marketing to capture market demand. In 2025, cash provided by operating activities totaled $4.8 million. We expect cash provided by operating activities to continue to improve in 2026, driven mainly by the anticipated revenue growth. While the Company has been successful in raising capital, there is no assurance that it will be successful at raising additional capital in the future. Additionally, if the Company’s plans are not achieved and/or if significant unanticipated events occur, the Company may have to further modify its business plan, which may require us to raise additional capital or reduce expenses. Cash Flows Year ended December 31, (in thousands) 2025 2024 Net cash provided by operating activities $ 4,753 $ 2,731 Net cash used in investing activities (4,196) (7,214) Net cash provided by (used in) financing activities (920) 898 Net decrease in cash and cash equivalents $ (363) $ (3,585) For the year ended December 31, 2025, in relation to the prior year, cash provided by operating activities increased primarily as a result of the increase in revenue. For the year ended December 31, 2025, in relation to the prior year, cash used in investing activities decreased primarily due to a reduction in payments towards business and asset acquisitions. In 2024, we paid $5.3 million in connection with the acquisition of ADA Site Compliance, net of cash acquired, whereas payments towards asset acquisitions in 2025 totaled $2.2 million. For the year ended December 31, 2025, in relation to the prior year, the change to cash used in financing activities from cash provided by financing activities was primarily due to an increase in common stock repurchases from $2.0 million in 2024 to $4.6 million in 2025. This impact was partially offset by a net improvement in other financing activities, as 2025 net proceeds from debt refinancing 25 Table of Contents of $5.7 million exceeded the net 2024 impact of $4.9 million, which was comprised of net common stock offering proceeds of $6.6 million reduced by $1.7 million in cash outlays for settlement of contingent consideration. Critical Accounting Policies and Estimates The discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with the accounting principles generally accepted in the United States. The preparation of consolidated financial statements requires management to make estimates and assumptions that affect the amounts reported and disclosed in our consolidated financial statements and the accompanying notes. Actual results could differ materially from these estimates under different assumptions or conditions. The critical accounting estimates discussed below are estimates made in accordance with generally accepted accounting principles that involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on the financial condition or results of operations. Contingent Consideration Recognized in Connection with Business Combinations and Asset Acquisitions We recognize the contingent consideration liability resulting from a business combination based on its fair value, which is determined both initially and at the end of each reporting period preceding the end of the measurement period using the Monte-Carlo simulation model. The model incorporates key assumptions, including non-recurring and recurring revenue metrics. Changes in estimated revenue and outcomes different from estimates could cause a significant adjustment to earnings in a reporting period as the fair value of the liability is highly dependent on management’s estimate. The fair value of the contingent consideration liability resulting from an asset acquisition is determined by management based on estimated recurring revenue from acquired customer relationships. Subsequent changes in the estimated amount of consideration are recognized as an adjustment to the cost of the acquired asset. Changes in estimated revenue and outcomes different from estimates could cause a significant adjustment to the cost of acquired assets in a reporting period as the fair value of the liability is highly dependent on management’s estimate. Refer to Note 2 - Significant Accounting Policies to our consolidated financial statements for a complete discussion of the significant accounting policies and methods used in the preparation of our consolidated financial statements, including our accounting policies related to intangible assets.