AudioEye, Inc.

Revenue for Q2 2026 was $10.7 million, up 9% year over year. ARR was $42.3 million as of 6/30/2026, up from $41.2 million on 3/31/2026, reflecting 11% annualized sequential ARR growth and 11% growth versus the prior year comparable period. Gross profit was $8.4 million, or about 79% of revenue, versus $7.6 million, or 77%, in Q2 2025; adjusted gross margin was 84% versus 83%. Adjusted EBITDA was approximately $3.0 million, or 28% margin, versus $1.9 million, or 20% margin a year ago; adjusted free cash flow was $2.6 million. Net loss was $0.9 million, or $0.07 per share, versus breakeven last year. For Q3 2026, management guided to revenue of $10.85 million-$11.05 million, adjusted EBITDA of $3.4 million-$3.6 million, and adjusted EPS of $0.26-$0.28. For full-year 2026, revenue guidance was tightened to $43.5 million-$44.0 million, adjusted EBITDA was raised to $12.7 million from at least $12.0 million, adjusted EPS is expected to be at least $0.98, and management expects a run-rate adjusted EBITDA of over $15 million by the end of 2026.

Kelly Georgevich emphasized that the business is still compounding, citing 42 consecutive quarters of sequential revenue growth and strong ARR expansion. She said the company is at a “pivotal point” on profitability and cash flow, with adjusted EBITDA scaling faster than revenue and free cash flow expected to improve in the second half as litigation expense declines. Her tone was confident but measured on Europe, repeatedly describing EAA enforcement as early innings while saying AudioEye is positioned to capitalize when demand inflects.

Matthew Domeyer focused on the quarter’s financial progression: revenue up 9% year over year to $10.7 million, gross profit up to $8.4 million, adjusted EBITDA up to $3.0 million, and adjusted free cash flow of $2.6 million. He highlighted margin improvement, including adjusted gross margin at 84% and adjusted EBITDA margin at 28%, as well as lower R&D spend at about 12% of revenue versus 17% a year ago due to AI tools and automation. On the balance sheet, he said cash was $8.7 million, revolver availability was $3.0 million, net debt was $8.1 million, and net debt to adjusted EBITDA was about 0.6x using 2026 guidance.

Analysts focused on Europe, AI, channel mix, cash deployment, and litigation. Management said EU sales investment is being handled strategically with existing resources and a multichannel approach, and they reiterated that they are ready for an inflection point but still view enforcement as early. On AI, management said they are not seeing adverse competitive pressure and instead see upside from proprietary data, reporting tools, and potentially higher ASPs through supplemental products. They also said litigation expense was about 40% lower in Q2 than Q1 and should trend down in the second half, which should support more cash generation.