third quarter 2026
Filed Oct 26, 2026AudioEye Reports Record Third Quarter 2026 Results
Revenue reached a record $11.0M, ARR grew 12% year over year, gross margin expanded to 83%, and the Company generated GAAP net income of $1.0M and adjusted EBITDA of $3.9M. Fourth-quarter revenue, adjusted EBITDA and adjusted EPS guidance all call for additional sequential growth.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Revenue, three months ended September 30, 2026GAAP | $10.96M | – | 7% |
| Cost of revenue, three months ended September 30, 2026GAAP | 1.87M | – | – |
| Gross profit, three months ended September 30, 2026GAAP | $9.09M | – | – |
| Gross margin, three months ended September 30, 2026GAAP | 83 % | – | – |
| Adjusted gross profit, three months ended September 30, 2026non-GAAP | $9.61M | – | – |
| Adjusted gross margin, three months ended September 30, 2026non-GAAP | 88 % | – | – |
| Selling and marketing expense, three months ended September 30, 2026GAAP | 3.30M | – | – |
| Research and development expense, three months ended September 30, 2026GAAP | 889K | – | – |
| General and administrative expense, three months ended September 30, 2026GAAP | 3.64M | – | – |
| Total operating expenses, three months ended September 30, 2026GAAP | 7.84M | – | decrease of 5% |
| Operating income (loss), three months ended September 30, 2026GAAP | 1.25M | – | – |
| Interest expense, net, three months ended September 30, 2026GAAP | −265K | – | – |
| Net income (loss), three months ended September 30, 2026GAAP | $990K | – | – |
| Net income (loss) per common share - basic, three months ended September 30, 2026GAAP | $ 0.08 | – | – |
| Net income (loss) per common share - diluted, three months ended September 30, 2026GAAP | $ 0.08 | – | – |
| Adjusted EBITDA, three months ended September 30, 2026non-GAAP | $3.89M | – | 58% |
| Adjusted EBITDA margin, three months ended September 30, 2026non-GAAP | 35 % | – | – |
| Adjusted earnings per diluted share, three months ended September 30, 2026non-GAAP | $ 0.30 | – | – |
| ARR as of September 30, 2026other | $43.3M | increased sequentially | 12% |
| Revenue, nine months ended September 30, 2026GAAP | $32.23M | – | – |
| Gross profit, nine months ended September 30, 2026GAAP | $25.79M | – | – |
| Gross margin, nine months ended September 30, 2026GAAP | 80 % | – | – |
| Total operating expenses, nine months ended September 30, 2026GAAP | 27.02M | – | – |
| Operating income (loss), nine months ended September 30, 2026GAAP | −1.23M | – | – |
| Net income (loss), nine months ended September 30, 2026GAAP | −$1.99M | – | – |
| Net income (loss) per common share - diluted, nine months ended September 30, 2026GAAP | $ (0.16) | – | – |
| Adjusted EBITDA, nine months ended September 30, 2026non-GAAP | $9.22M | – | – |
| Adjusted EBITDA margin, nine months ended September 30, 2026non-GAAP | 29 % | – | – |
| Adjusted earnings per diluted share, nine months ended September 30, 2026non-GAAP | $ 0.72 | – | – |
| Cash and cash equivalents as of September 30, 2026GAAP | $9.33M | – | – |
| Term loan, current, as of September 30, 2026GAAP | 850K | – | – |
| Term loan, net, as of September 30, 2026GAAP | 15.38M | – | – |
Amounts quoted below without a unit are in thousands, as in the filing’s tables. Per-share figures are as printed.
fourth quarter of 2026 and full year 2026 outlook
- Revenuefourth quarter of 2026: between $11.4M and $11.6M; full year 2026: between $43.6M and $43.8M
- NoteAdjusted EBITDA: between $4.2M and $4.4M for the fourth quarter of 2026; between $13.4M and $13.6M for the full year 2026, representing approximately 50% year-over-year growth.
- NoteAdjusted EPS: between $0.32 and $0.33 per share for the fourth quarter of 2026; at least $1.04 per share for the full year 2026.
- NoteSequential annualized fourth quarter revenue growth expected of approximately 20%.
- NoteOver $17 million of annualized adjusted EBITDA in the fourth quarter.
- NoteContinued GAAP profitability in the fourth quarter.
Capital returns
- On October 20, 2026, the Board of Directors authorized the repurchase of up to $15 million of the Company’s outstanding common stock through October 18, 2027.
- The new program replaces the Company’s prior share repurchase authorization and is expected to be funded with working capital and cash from operations.
What drove it
- Higher sales and efficiencies including AI drove the increase in gross profit.
- Lower sales and marketing expenses and reduced research and development expenses driven by AI efficiencies drove the decrease in operating expenses.
- The Company reduced its emphasis on non-recurring revenue to focus on growing ARR.
- Customer growth was driven by increases in both the Partner and Marketplace channel and Enterprise channel.
- AudioEye launched Agentic Audits and the AudioEye SDK MCP on October 8, 2026, both powered by AudioEye Intelligence.
Concerns
- The nine-month period remained GAAP unprofitable, with net income (loss) of $ (1,989) (in thousands) and operating income (loss) of (1,226) (in thousands).
- Interest expense, net was (265) (in thousands) in the third quarter of 2026.
- ARR excludes non-recurring fees, and some contracts are terminable prior to the expected term, which may impact future ARR.
- The Company identified risks including variability of revenue and financial performance, competition, litigation costs, product development and technological changes, and general economic conditions.
What to watch
- Delivery of fourth-quarter revenue of between $11.4M and $11.6M.
- Delivery of fourth-quarter adjusted EBITDA of between $4.2M and $4.4M and adjusted EPS of between $0.32 and $0.33 per share.
- ARR growth following the reduction in emphasis on non-recurring revenue.
- The impact of Agentic Audits and the AudioEye SDK MCP on customer adoption and legal protection.
- Execution of the up to $15 million share repurchase program through October 18, 2027.
Balance sheet and cash flow
- Cash and cash equivalents were $ 9,327 (in thousands) as of September 30, 2026, compared with $ 5,288 (in thousands) as of December 31, 2025.
- Term loan, current was 850 (in thousands) and term loan, net was 15,380 (in thousands) as of September 30, 2026.
- Total assets were $ 33,928 (in thousands), total liabilities were 28,852 (in thousands), and total stockholders’ equity was 5,076 (in thousands) as of September 30, 2026.
Analysis
AudioEye reported record third-quarter revenue of $11.0M, up 7% from $10.2M in the same prior-year period. The Company said it has reduced its emphasis on non-recurring revenue to prioritize ARR, which grew 12% year over year. ARR reached $43.3M at September 30, 2026, up sequentially from $42.3M at June 30, 2026. AudioEye also reported approximately 130,000 customers, up 7,000 year over year.
Profitability improved materially in the quarter. Gross profit was $9.1M and GAAP gross margin was 83%, compared with $7.9M and 77% in the same prior-year period. Adjusted gross margin was 88%, compared with 83%. Management attributed gross-profit improvement to higher sales and efficiencies including AI, while operating expenses fell 5%, primarily due to lower sales and marketing expense and reduced research and development expense driven by AI efficiencies.
The quarter produced GAAP net income of $1.0M, or $0.08 per diluted share, versus a net loss of $(0.6M), or $(0.04) per diluted share, in the comparable period. Adjusted EBITDA rose 58% year over year to $3.9M, with adjusted EBITDA margin of 35% versus 24%, and adjusted EPS increased to $0.30 from $0.19. The improvement in quarterly earnings contrasts with the nine-month GAAP net loss of $ (1,989) (in thousands), although nine-month adjusted EBITDA increased to $ 9,223 (in thousands) from $ 6,292 (in thousands).
The balance sheet included $9.3M in cash and cash equivalents at September 30, 2026, while term loan balances were 850 (in thousands) current and 15,380 (in thousands) net long term. The Board authorized a repurchase of up to $15 million of common stock through October 18, 2027, replacing the prior authorization. The Company expects the program to be funded with working capital and cash from operations.
For the fourth quarter, AudioEye guided for revenue of between $11.4M and $11.6M, adjusted EBITDA of between $4.2M and $4.4M, and adjusted EPS of between $0.32 and $0.33 per share. Full-year guidance calls for revenue of between $43.6M and $43.8M, adjusted EBITDA of between $13.4M and $13.6M, and at least $1.04 per share of adjusted EPS. Management also expects approximately 20% sequential annualized revenue growth in the fourth quarter and continued GAAP profitability.
Management, verbatim
Starting in 2025 we set an aspirational goal of producing 30-40% annual growth over three years in adjusted EBITDA and adjusted EPS. In the second year, we are on track to exceed this goal with approximately 50% year-over-year growth while also generating GAAP profitability in the third quarter.
Kelly Georgevich, Chief Executive Officer of AudioEye
The business is strong, and we expect annualized sequential revenue growth of approximately 20% in the fourth quarter, contributing to increased operating leverage.
Kelly Georgevich, Chief Executive Officer of AudioEye
In October, we launched two new AI products, Agentic Audits and the AudioEye SDK MCP, both powered by AudioEye Intelligence, our proprietary dataset built from more than one million human reviews over a decade.
Kelly Georgevich, Chief Executive Officer of AudioEye
Not in the filing
stated, not guessed- Prior-quarter revenue, gross profit, gross margin, operating expenses, operating income, net income, GAAP EPS, adjusted EBITDA, and adjusted EPS were not reported for the third-quarter metric rows.
- Operating cash flow was not reported.
- Free cash flow for the reported third quarter or nine-month period was not reported.
- Actual share repurchases and dividends were not reported.
- Revenue by Enterprise and Partner and Marketplace channel was not reported.
- Fourth-quarter and full-year GAAP revenue reconciliation for forward-looking adjusted EBITDA, adjusted EPS, adjusted EBITDA margin, and free cash flow guidance was not provided.
- Prior guidance was not provided.
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.