AudioEye Adjusted EPS of $0.30 as It Raises Full-Year Earnings Outlook
Key Facts
AudioEye reported third-quarter 2026 results on October 26, posting adjusted EPS of $0.30, above analysts’ estimate of $0.27 by $0.03. Revenue was about $11.0 million, compared with a consensus estimate of $10.94 million, according to an Investing.com report attributed to Reuters. The company said revenue rose 7% from the same period a year earlier, when it was $10.2 million, setting a quarterly record. Net income also swung to a profit of $1.0 million, or $0.08 per diluted share, from a loss of $0.6 million, or $0.04 per share, a year earlier. The results combined a beat on estimates with improved GAAP and adjusted profitability, while the company raised its fiscal-year adjusted EBITDA outlook.
Adjusted EPS rose to $0.30 from $0.19 in the third quarter of the prior year, according to the company’s announcement. The swing in net income from a loss to a profit came alongside sales growth and an improved gross margin. Gross profit was $9.1 million, compared with $7.9 million a year earlier. The GAAP gross margin rose to 83% from 77%, while the adjusted gross margin was 88%, compared with 83%. AudioEye attributed the improvement in gross profit to higher sales and operating efficiencies, including the use of artificial intelligence.
Operating expenses fell 5% to $7.8 million in the quarter, a decline the company said was mainly related to lower sales and marketing and research and development expenses, as well as efficiencies associated with the use of artificial intelligence. Adjusted EBITDA rose to $3.9 million from $2.5 million in the year-earlier period. In the second quarter, the company posted record revenue of $10.7 million, up 9% year over year. At the time, it had forecast third-quarter revenue of between $10.85 and $11.05 million and adjusted EPS of between $0.26 and $0.28. Third-quarter revenue and adjusted EPS came in above the previous outlook ranges.
Annual recurring revenue was $43.3 million on September 30, compared with $42.3 million on June 30, and the company said the metric grew 12% year over year during the quarter. In the second quarter, annual recurring revenue had reached $42.3 million, up 11% from the prior year. AudioEye said it reduced its focus on non-recurring revenue during 2026 to support annual recurring revenue growth. Cash and cash equivalents totaled $9.3 million at the end of September. The figures place recurring revenue growth and liquidity among the performance metrics the company reported alongside its quarterly results.
AudioEye raised its fiscal 2026 adjusted EBITDA outlook to a range of $13.4–13.6 million, equivalent to annual growth of about 50%. The company expects the metric to be between $4.2 and $4.4 million in the fourth quarter. Chief Executive Kelly Georgevich said the company is targeting annual growth of between 30% and 40% in the metric and adjusted EPS over a three-year period that began in 2025. She added that in the second year of the plan, the company is on track to exceed the target, with adjusted EBITDA growth of about 50%. For the fourth quarter, the company expects revenue of between $11.4 and $11.6 million and adjusted EPS of between $0.32 and $0.33.
For the full fiscal year, the company expects revenue of between $43.6 and $43.8 million and adjusted EPS of at least $1.04 in 2026. The board had authorized the repurchase of up to $15 million of common stock on October 20. The new authorization replaces the previous one and expires on October 18, 2027. AudioEye shares closed at $6.96 on October 19, then at $8.19 on October 20 and $7.88 on October 21. The stock closed at $8.10 on October 22 and $8.08 on October 23, according to EL7 data.
The company scheduled a call to discuss its third-quarter results for October 26, 2026, at 4:30 p.m. Eastern Time, followed by a question-and-answer session. The call is taking place on the day the results were announced, while management’s outlook covers the fourth quarter and fiscal 2026. The fourth-quarter outlook covers revenue, adjusted EPS and adjusted EBITDA. The annual outlook includes revenue and adjusted EPS, as well as the adjusted EBITDA range the company raised. These figures remain AudioEye’s forecasts for the periods specified in its announcement.