0001104659-26-027159
SEC filingAudioEye, Inc. reported fiscal year 2025 revenue of $40.3 million, representing a 15% year-over-year increase. The company generated a gross profit of $31.6 million (13% YoY growth) but recorded an operating loss of $1.8 million and a net loss of $3.1 million. Key performance drivers included growth in both sales channels: Partner and Marketplace revenue increased 10% to $22.2 million, while Enterprise revenue grew 21% to $18.1 million. Annual Recurring Revenue reached $40.0 million, up 9% from the prior year. The company maintained positive operating cash flow of $4.8 million but had negative working capital of $1.8 million as of December 31, 2025, with $5.3 million in cash and $13.4 million in term loan debt outstanding.
AudioEye reported fiscal year 2025 revenue of $40.3 million, a 15% increase from $35.2 million in 2024. The company achieved gross profit of $31.6 million (13% YoY growth) but recorded an operating loss of $1.8 million, which improved from a $3.4 million operating loss in the prior year. Net loss was $3.1 million, representing a 28% improvement from the $4.3 million net loss in 2024. The company's Annual Recurring Revenue reached $40.0 million as of December 31, 2025, up 9% year-over-year. Customer count increased to approximately 131,000 from 127,000 in the prior year, driven by growth in the Partner and Marketplace channel.
Revenue growth was driven by both sales channels. The Partner and Marketplace channel generated $22.2 million in revenue, representing 10% year-over-year growth and 58% of ARR. This channel serves small and medium-sized businesses through CMS partners, platform partners, authorized resellers, and the AudioEye Marketplace. The Enterprise channel generated $18.1 million in revenue, representing 21% year-over-year growth and 42% of ARR. This channel serves larger customers and organizations, including federal, state, and local government agencies. The company had one major customer (including affiliates) that accounted for approximately 13% of revenue in 2025, down from 15% in 2024.
Gross margin was 78.3% in 2025, down from 79.4% in the prior year. The decline was primarily due to increased cost of revenue, which grew 21% to $8.8 million, driven by higher service delivery costs and increased amortization of capitalized software development costs. Operating expenses totaled $33.4 million, with selling and marketing expenses increasing 18% to $14.9 million due to higher investment in third-party marketing services and personnel costs. Research and development expenses decreased 10% to $4.6 million due to lower personnel costs from headcount reduction. General and administrative expenses increased 13% to $15.2 million, driven by higher amortization expense for intangible assets, increased personnel costs including stock compensation, and higher litigation expenses.
Operating cash flow was positive at $4.8 million in 2025, up from $2.7 million in the prior year. Investing activities used $4.2 million primarily for software development costs ($1.9 million), payment for acquisition ($2.2 million), and equipment purchases. Financing activities used $0.9 million, including $4.6 million for common stock repurchases, partially offset by $13.4 million in proceeds from term loan. As of December 31, 2025, the company had $5.3 million in cash and cash equivalents, total assets of $32.2 million, and total liabilities of $27.4 million. Working capital was negative $1.8 million, with current assets of $12.6 million and current liabilities of $14.4 million. The company had $13.4 million outstanding under its term loan, with $12.9 million classified as noncurrent.
The company expects to continue investing in product development and sales and marketing to capture market demand. Management anticipates cash provided by operating activities to improve in 2026, driven mainly by anticipated revenue growth. The company believes it has sufficient liquidity to continue as a going concern through the next twelve months. Key risk factors include the company's history of losses, need for additional capital, competition in the web accessibility market, dependence on key employees, and evolving legal and regulatory environment for digital accessibility. The European Accessibility Act became effective in June 2025, requiring digital products and services to meet accessibility standards across the European Union, which may create both opportunities and compliance challenges.