Why did AudioEye raise its 2026 EBITDA guidance?

Sonal Goyal

28 October 2026 05:00 PM AEDT

Why did AudioEye raise its 2026 EBITDA guidance?

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Key Highlights

Second-quarter 2026 Revenue was $10.7 million, up 9 per cent, and annual Recurring Revenue was $42.3 million, up 11 per cent year on year.
Adjusted EBITDA was $3.0 million, a 28 per cent margin, while the net loss was $0.9 million.
Management raised full-year 2026 adjusted EBITDA guidance to at least $12.7 million, with revenue guided to $43.5 million to $44.0 million.

The latest results

AudioEye, Inc. (NASDAQ:AEYE), which sells digital accessibility software and services, reported second-quarter 2026 results on 13 August 2026 for the quarter ended 30 June 2026. Revenue was $10.7 million, up 9 per cent from $9.9 million, and revenue for the first six months was $21.3 million compared with $19.6 million.

Annual recurring revenue was $42.3 million, up from $41.2 million at the end of March and up 11 per cent year on year. The company had about 129,000 customers, up 9,000 from a year earlier, with growth driven by its Partner and Marketplace channel.

Margins, costs and profit

Gross profit was $8.4 million, a 79 per cent margin, while adjusted gross Margin was 84 per cent. Operating expenses were $9.0 million, up 23 per cent. The company noted that the prior-year quarter included a one-time $1.4 million gain on contingent consideration, and that general and administrative costs rose to $4.5 million from $3.7 million, mainly because of higher litigation expenses.

The net loss was $0.9 million, or $0.07 per share, compared with a loss of about nil a year earlier. The six-month net loss was $3.0 million, or $0.24 per share.

Adjusted EBITDA, a non-GAAP measure, was $3.0 million, a 28 per cent margin, up from $1.9 million, and the highest quarterly figure to date. Adjusted Earnings Per Share were $0.23 against $0.15. The gap between the GAAP loss and positive adjusted figures is significant, and the company's reconciliation sets out the differences.

Litigation costs and Loan terms

Litigation expense was $1.1 million in the second quarter, up from $0.6 million, and $2.9 million for the six months, up from $1.3 million. The company describes these costs as primarily related to non-recurring litigation.

A Form 8-K filed on 18 September 2026 shows a fourth modification to the company's loan agreement with Western Alliance Bank. The change allows certain litigation expenses to be added back in the covenant definitions of adjusted EBITDA, up to $5.0 million on a trailing twelve-month basis through 31 December 2026 and up to $3.0 million in 2027. It also caps stock Buybacks at $7.0 million in aggregate across 2025 to 2027.

Balance sheet and guidance

Cash was $8.7 million at 30 June 2026, up from $5.3 million at the end of 2025.

Management guided to full-year 2026 revenue of $43.5 million to $44.0 million, adjusted EBITDA of at least $12.7 million, which it raised, and adjusted earnings per share of at least $0.98. For the third quarter it guided to revenue of $10.85 million to $11.05 million and adjusted EBITDA of $3.4 million to $3.6 million.

These are forecasts, not results. Chief executive Kelly Georgevich said adjusted EBITDA and free Cash Flow had reached a pivotal point and that the company was evaluating Options to deploy excess cash.

What to watch

Points to follow include whether third-quarter revenue and adjusted EBITDA fall within the guided ranges, how litigation costs evolve, and whether the Debt balance changes from the roughly $16.4 million reported.

FAQs

Q: What was AudioEye's revenue in the second quarter of 2026?

A: Revenue was $10.7 million, up 9 per cent from $9.9 million. Annual recurring revenue was $42.3 million, up 11 per cent year on year.

Q: What is AudioEye's updated 2026 guidance?

A: Management guided to revenue of $43.5 million to $44.0 million, adjusted EBITDA of at least $12.7 million, which it raised, and adjusted earnings per share of at least $0.98.

Q: What did the September loan modification change?

A: The fourth modification with Western Alliance Bank allows certain litigation expenses to be added back in covenant definitions of adjusted EBITDA, up to $5.0 million through 31 December 2026 and up to $3.0 million in 2027. It also caps stock buybacks at $7.0 million in aggregate across 2025 to 2027.

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