AudioEye Approves $15 Million Share Buyback Authorization
Key Facts
AudioEye announced on October 20, 2026 that its board had approved a new program to repurchase up to $15.0 million of its common stock, according to a filing with the U.S. Securities and Exchange Commission. The board terminated the previous program as it approved the new authorization, which replaces it under the company's share repurchase policy. The canceled program allowed purchases of up to $12.5 million of common stock, according to the company's quarterly report for the period ended in June. At the end of that month, $7.45 million remained under the previous authorization, before the board's decision to terminate it. The company said in its filing on the new program that the authorization does not obligate it to make purchases, with execution remaining subject to contractual provisions.
The company intends to fund purchases from working capital and cash generated from operations, according to the SEC filing on the program. Methods for carrying out the program include open-market share purchases and block trades among the approaches permitted by the new authorization. The reliance on operating cash follows an increase in net cash provided by the company's operations during the first half of 2026, according to its quarterly report. That cash totaled $2,277 thousand in the period, compared with $1,171 thousand during the first half of 2025. The funding the company intends to use thus combines working capital resources and cash flows from its business, at a time when operations recorded an increase from the corresponding period.
Meanwhile, an amendment to the loan agreement filed with the SEC in September sets the permitted share repurchase amount at $7,000,000.00 in aggregate for fiscal years 2025, 2026 and 2027 combined. The amendment stipulates that the aggregate amount must "not exceed seven million dollars" during those fiscal years, according to the contractual text. This limit concerns the amount permitted under the loan agreement, while the October decision concerns the size of the authorization granted by the board to purchase common stock. Execution of the new program remains tied to the contractual provisions the company included among its terms in the filing, alongside the funding sources it intends to use. The company had reported outstanding loan principal of $16.8 million at the end of June 2026 in its quarterly report.
As for completed purchases, AudioEye used $475,000 under the previous program to repurchase shares during the first half of 2026, according to its quarterly report filed with the SEC. These purchases relate to the program the board terminated and were made during the period preceding the announcement of the new authorization in October. In its operating results, the company reported an increase in annual recurring revenue to $42.3 million at the end of June 2026, according to its second-quarter earnings release. That compared with $41.2 million at the end of March of the same year, the comparison point the company provided for this metric. Annual recurring revenue thus increased between the ends of the two quarters, alongside continued share purchases under the previous program during the first half.
Results for the second quarter of 2026 showed a net loss of $0.9 million, according to the earnings release AudioEye published for that period. Operating expenses totaled $9.0 million in the same quarter, according to the figures the company disclosed in its quarterly performance report. That represents a year-on-year increase of 23% compared with operating expenses in the corresponding period, according to the earnings release. In explaining the movement in general and administrative expenses, the company attributed the rise in this item primarily to increased litigation expenses. It said the increase was mainly due to "higher litigation expenses," while the net result under accounting standards remained a loss during the quarter in which annual recurring revenue increased.
For the third quarter of 2026, AudioEye had forecast revenue of between $10.85 million and $11.05 million when it announced its second-quarter results. Guidance published in the same release included adjusted earnings before interest, taxes, depreciation and amortization of between $3.4 million and $3.6 million for that quarter. The new share repurchase authorization expires on October 18, 2027, according to the date specified in the company's filing on the board's decision. Regarding subsequent contractual restrictions, the loan amendment sets the permitted repurchase amount at $2,000,000.00 for fiscal year 2028 and each fiscal year thereafter. The outstanding loan matures on March 31, 2030, according to the loan terms in the company's quarterly report.