AudioEye Inc (AEYE) 2022 Q4 法說會逐字稿

Good afternoon, and welcome to AudioEye's Fourth Quarter and Full Year 2022 Earnings Conference Call. (Operator Instructions)

下午好，歡迎來到 AudioEye 的第四季度和 2022 年全年收益電話會議。 （操作員說明）

I would now like to turn the conference over to Brian Prenoveau, Investor Relations. Please go ahead.

我現在想將會議轉交給投資者關係部的 Brian Prenoveau。請繼續。

Thank you, operator. Joining us for today's call are AudioEye's CEO, Mr. David Moradi; and CFO, Miss Kelly Georgevich. Following their remarks, we will open the call for questions from the company's publishing analysts.

謝謝你，運營商。與我們一起參加今天電話會議的還有 AudioEye 的首席執行官 David Moradi 先生；首席財務官 Kelly Georgevich 小姐。在他們發表評論之後，我們將開始徵求公司出版分析師的問題。

I would like to remind everyone that this call will be recorded and made available for replay via a link available in the Investor Relations section of the company's website at www.audioeye.com.

我想提醒大家，此次通話將被錄音，並可通過公司網站 www.audioeye.com 投資者關係部分的鏈接進行重播。

Before I turn the call over to AudioEye's Chief Executive Officer, the company would like to remind all participants that statements made by AudioEye management during the course of this conference call that are not historical facts are considered to be forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides a safe harbor for such forward-looking statements. The words believe, expect, anticipate, estimate, confident, will and other similar statements of expectation identify forward-looking statements. These statements are predictions, projections or other statements about future events and are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could differ materially because of factors discussed in today's press release and the comments made during the conference call and in the Risk Factors section of the company's annual report on Form 10-K and its quarterly reports filings with the Securities and Exchange Commission. Participants on this call are cautioned not to place undue reliance on these forward-looking statements, which reflect management's belief only as of the date hereof. AudioEye does not undertake any duty to update or correct any forward-looking statements.

在我將電話轉交給 AudioEye 的首席執行官之前，該公司想提醒所有與會者，AudioEye 管理層在本次電話會議期間發表的非歷史事實的陳述被視為前瞻性陳述。 1995 年的《私人證券訴訟改革法案》為此類前瞻性陳述提供了安全港。相信、預期、預期、估計、自信、意願和其他類似的預期陳述可識別前瞻性陳述。這些陳述是關於未來事件的預測、預測或其他陳述，並且基於受風險和不確定因素影響的當前預期和假設。由於今天的新聞稿中討論的因素、電話會議中的評論以及公司 10-K 表格年度報告的風險因素部分及其向美國證券交易委員會提交的季度報告中的評論，實際結果可能存在重大差異。提醒本次電話會議的參與者不要過分依賴這些前瞻性陳述，這些陳述僅反映管理層截至本新聞稿發布之日的信念。 AudioEye 不承擔任何更新或更正任何前瞻性陳述的義務。

Further, management's remarks today will include certain non-GAAP financial measures. A reconciliation of the most directly comparable GAAP financial measures to these non-GAAP financial measures is available in the company's earnings release posted in the Investor Relations section of our website at www.audioeye.com.

此外，管理層今天的評論將包括某些非 GAAP 財務指標。在我們網站 www.audioeye.com 的投資者關係部分發布的公司收益報告中提供了最直接可比的 GAAP 財務指標與這些非 GAAP 財務指標的對賬。

Now I would like to turn the call over to AudioEye's Chief Executive Officer, Mr. David Moradi. David?

現在我想把電話轉給 AudioEye 的首席執行官大衛莫拉迪先生。大衛？

Thank you for joining us on today's call. I want to begin with our strong financial performance and our expectations going forward.

感謝您參加今天的電話會議。我想從我們強勁的財務業績和我們對未來的期望開始。

Despite macroeconomic uncertainty, the fourth quarter marked the 28th straight quarter of record revenue, achieving $7.74 million, which was 19% year-over-year growth. We were pleased to see gross margin increase to 77% in the fourth quarter from 75% in the third quarter of 2022. The increase in gross margin was a function of continued efficiencies across the board in our organization, which is impressive given our continued investment in R&D and customer success.

儘管宏觀經濟存在不確定性，但第四季度的收入連續第 28 個季度創紀錄，達到 774 萬美元，同比增長 19%。我們很高興看到第四季度的毛利率從 2022 年第三季度的 75% 增加到 77%。毛利率的增長是我們組織整體效率持續提高的結果，考慮到我們的持續投資，這令人印象深刻在研發和客戶成功方面。

As in previous quarters, we saw year-over-year revenue growth in our partner and marketplace and enterprise channels. Fourth quarter revenue growth was primarily driven by an increase in recurring revenue, which comprised approximately 97% of total revenue for the fourth quarter compared to 94% in the third quarter of 2022.

與前幾個季度一樣，我們的合作夥伴、市場和企業渠道的收入同比增長。第四季度收入增長主要受經常性收入增加的推動，經常性收入佔第四季度總收入的約 97%，而 2022 年第三季度為 94%。

In addition to achieving revenue within the guidance range, we are pleased to report improved GAAP results and non-GAAP profitability of approximately $200,000 in the quarter. As noted in the last earnings call, beginning in January 2022, we implemented processes that resulted in efficiencies and reduced operating expenses as a percentage of revenue and on an absolute basis. In the quarter, we were able to drive our year-over-year operating costs down by approximately 19% while increasing revenue by 19%.

除了在指導範圍內實現收入外，我們很高興地報告本季度改進的 GAAP 結果和非 GAAP 盈利能力約為 200,000 美元。正如上次財報電話會議中所述，從 2022 年 1 月開始，我們實施的流程提高了效率並降低了運營支出佔收入的百分比和絕對值。在本季度，我們能夠將運營成本同比降低約 19%，同時將收入增加 19%。

Cash burn continued to improve sequentially from $1.4 million to $900,000 in the fourth quarter, which included nonrecurring expense of $600,000.

第四季度現金消耗從 140 萬美元連續增加至 900,000 美元，其中包括 600,000 美元的非經常性費用。

On the partner and marketplace channel, we renegotiated a couple of long-term strategic partnerships, resulting in a short-term reduction of ARR while contractually increasing the minimums and contract plan significantly. Specifically, on these 2 contracts, we expect improvements in ARR in the second half and material increases in 2024. We continue to gain market share in this channel with the leading product in the industry. We signed several new partnerships in the quarter, many coming from competitors.

在合作夥伴和市場渠道上，我們重新談判了幾個長期戰略合作夥伴關係，導致 ARR 的短期減少，同時合同顯著增加了最低限度和合同計劃。具體而言，在這 2 份合同中，我們預計下半年 ARR 將有所改善，2024 年將出現實質性增長。我們將繼續憑藉行業領先的產品在該渠道獲得市場份額。我們在本季度簽署了幾項新的合作夥伴關係，其中許多來自競爭對手。

On the Enterprise side, we have seen some tightening of budgets and elongation of sales cycles. We have a couple of large contracts which remain in negotiations. These deals impact revenue guidance and ARR growth over the short term, resulting in relatively flat ARR sequentially and 13% ARR growth year-over-year. Kelly will discuss this in more detail shortly. We're confident that we'll maintain these relationships and grow revenue from these customers over time.

在企業方面，我們看到預算有所收緊，銷售週期有所延長。我們有幾份大合同仍在談判中。這些交易在短期內影響收入指引和 ARR 增長，導致 ARR 環比持平，ARR 同比增長 13%。凱利將在稍後更詳細地討論這個問題。我們有信心，隨著時間的推移，我們將保持這些關係並增加來自這些客戶的收入。

Customer logo retention continues to remain strong. During periods of uncertainty, working with customers experiencing cost pressure is important to provide a win-win for both parties in the long term.

客戶徽標保留率繼續保持強勁。在不確定時期，與承受成本壓力的客戶合作對於長期雙贏非常重要。

Moving on to guidance. We're guiding for revenue of between $7.7 million and $7.9 million in the first quarter, representing year-over-year growth of 13% at the midpoint. As discussed, renegotiating specific partner and enterprise contracts will slow growth in the first quarter. We expect that sequential growth for revenue and ARR will resume in the second quarter and accelerate over the remainder of the year.

繼續指導。我們預計第一季度的收入在 770 萬美元至 790 萬美元之間，中點同比增長 13%。如前所述，重新談判特定合作夥伴和企業合同將減緩第一季度的增長。我們預計收入和 ARR 的連續增長將在第二季度恢復，並在今年剩餘時間內加速。

For 2023, we expect non-GAAP sales and marketing and G&A costs will stay relatively flat from 2022. We expect GAAP sales and marketing will be relatively flat, and G&A will be down.

對於 2023 年，我們預計非 GAAP 銷售和營銷以及 G&A 成本與 2022 年相比將保持相對平穩。我們預計 GAAP 銷售和營銷將相對平穩，G&A 將會下降。

R&D investments will trend up throughout the year as we see high-impact areas to invest in. With increased R&D investment, we expect a non-GAAP operating loss in the first half of 2023 with a return to non-GAAP operating profit in the second half. We expect a breakeven non-GAAP operating profit for the full year of 2023. We also expect that GAAP results will improve year-over-year.

研發投資將在全年呈上升趨勢，因為我們看到了需要投資的高影響領域。隨著研發投資的增加，我們預計 2023 年上半年將出現非 GAAP 營業虧損，並在下半年恢復非 GAAP 營業利潤一半。我們預計 2023 年全年將實現盈虧平衡的非 GAAP 營業利潤。我們還預計 GAAP 業績將同比改善。

We ended December 31 with $6.9 million of cash. As discussed previously, we manage our costs prudently in anticipation of the macroeconomic slowdown. We see an inflection to positive cash flow by the fourth quarter of 2023.

截至 12 月 31 日，我們擁有 690 萬美元的現金。如前所述，我們在預期宏觀經濟放緩的情況下審慎地管理我們的成本。我們預計到 2023 年第四季度將出現正現金流轉折。

You may recall that we announced a $3 million stock repurchase program last year. We continue to be committed to deploying our capital in a manner that delivers the greatest value for all shareholders. We did not utilize the buyback in the fourth quarter, but we'll maintain it as an option for 2023.

您可能還記得我們去年宣布了 300 萬美元的股票回購計劃。我們繼續致力於以為所有股東創造最大價值的方式部署我們的資本。我們在第四季度沒有使用回購，但我們會將其作為 2023 年的一個選項。

Before turning the call over to AudioEye's CFO, Kelly, I'm excited that Mikel Chertudi has recently joined AudioEye as our Chief Revenue Officer. Mikel is an experienced SaaS technology leader with over 2 decades of go-to-market expertise. He's built industry-recognized, award-winning sales and marketing teams at Adobe, Omniture and Ancestry.com.

在將電話轉給 AudioEye 的首席財務官 Kelly 之前，我很高興 Mikel Chertudi 最近加入 AudioEye 擔任我們的首席營收官。 Mikel 是一位經驗豐富的 SaaS 技術領導者，擁有超過 2 年的上市專業知識。他在 Adobe、Omniture 和 Ancestry.com 建立了業界公認的、屢獲殊榮的銷售和營銷團隊。

Mikel oversaw growth in demand creation at Omniture while quickly scaling from $40 million to $400 million of ARR in just 4 years, leading to its acquisition by Adobe. During Mikel's time at Adobe, he led the internal digital transformation, scaling growth from $3 billion to over $12 billion of ARR. Being entrepreneurial-minded, Mikel left Adobe after 8 years to co-found an enterprise SaaS marketing and sales analytics technology company. This company was later acquired by ObservePoint where he led sales and customer success. Mikel has recently been at Guild, a marketplace unicorn, helping to scale 50% year-over-year growth.

Mikel 監督了 Omniture 需求創造的增長，同時在短短 4 年內將 ARR 迅速從 4000 萬美元擴大到 4 億美元，最終被 Adobe 收購。在 Mikel 在 Adobe 任職期間，他領導了內部數字化轉型，將 ARR 的增長從 30 億美元擴大到超過 120 億美元。具有企業家精神的 Mikel 在 8 年後離開了 Adobe，共同創立了一家企業 SaaS 營銷和銷售分析技術公司。這家公司後來被 ObservePoint 收購，在那裡他領導銷售和客戶成功。 Mikel 最近加入了市場獨角獸 Guild，幫助實現了 50% 的同比增長。

Mikel is joining us at a time when we are primed for significant growth. Over the last 3 years since we embarked on a strategic change in direction, our revenues have increased over 120%, our gross margin is up over 20 points and we have delivered non-GAAP profitability. We have invested in R&D and have the best product in the industry, which continues to improve with increased investment.

Mikel 加入我們的時候，我們正準備實現顯著增長。在過去的 3 年裡，自從我們開始戰略方向轉變以來，我們的收入增長了 120% 以上，我們的毛利率上升了 20 多個百分點，並且我們實現了非 GAAP 盈利。我們在研發方面進行了投資，並擁有業內最好的產品，並隨著投資的增加而不斷改進。

I'll now turn the call over to AudioEye's CFO, Kelly.

我現在將電話轉給 AudioEye 的首席財務官 Kelly。

Thank you, David. Revenue for Q4 2022 was $7.74 million, a 19% increase from Q4 2021 and up sequentially from Q3 2022. While there were several negotiations in play in the quarter, as David discussed, we are pleased with the high logo retention and revenue growth from both the enterprise and marketplace channels. On a full year basis, in 2022, our revenue grew 22% to $29.9 million from $24.5 million and 20% growth in 2021.

謝謝你，大衛。 2022 年第四季度的收入為 774 萬美元，比 2021 年第四季度增長 19%，比 2022 年第三季度連續增長。雖然本季度進行了幾次談判，正如大衛所討論的那樣，但我們對兩家公司的高徽標保留率和收入增長感到滿意企業和市場渠道。按全年計算，2022 年我們的收入從 2450 萬美元增長 22% 至 2990 萬美元，2021 年增長 20%。

I will now discuss our key revenue channels, partner and marketplace and enterprise.

我現在將討論我們的主要收入渠道、合作夥伴、市場和企業。

The partner and marketplace channel includes all revenue from our SMB-focused marketplace products and revenue from a variety of partners to deploy these same products for their SMB customers. For the fourth quarter of 2022, our partnership and marketplace channel grew 14% year-over-year and represented approximately 55% of revenue and 58% of ARR. On a full year basis, in 2022, this channel's revenue grew 17% from $13.6 million of revenue in 2021 to $16 million in 2022. We are pleased to expand existing revenue and commitments from partnerships in this channel throughout the year, and in Q4 2022 specifically, which will contribute to the stability and growth of revenue in 2023 and beyond.

合作夥伴和市場渠道包括來自我們以 SMB 為中心的市場產品的所有收入，以及來自各種合作夥伴為其 SMB 客戶部署這些相同產品的收入。 2022 年第四季度，我們的合作夥伴關係和市場渠道同比增長 14%，約佔收入的 55% 和 ARR 的 58%。從全年來看，到 2022 年，該渠道的收入增長了 17%，從 2021 年的 1360 萬美元增長到 2022 年的 1600 萬美元。我們很高興在全年和 2022 年第四季度擴大該渠道合作夥伴關係的現有收入和承諾具體來說，這將有助於 2023 年及以後收入的穩定和增長。

AudioEye's enterprise channel consists of our larger customers and organizations, including those with non-platform custom websites who generally engage directly with AudioEye sales personnel for custom pricing and solutions. This channel also includes federal, state and local government agencies and revenue from the acquisition of the Bureau of Internet Accessibility, or BoIA, on March 9, 2022. The enterprise channel grew approximately 26% in Q4 2022 from the comparable period of the prior year and contributed approximately 45% of revenue and 42% of ARR. On a full year basis, in 2022, our enterprise revenue grew 28% from $10.9 million of revenue in 2021 to $13.9 million in 2022.

AudioEye 的企業渠道由我們較大的客戶和組織組成，包括那些擁有非平台定製網站的客戶和組織，這些網站通常直接與 AudioEye 銷售人員聯繫以獲得定制定價和解決方案。該渠道還包括聯邦、州和地方政府機構以及 2022 年 3 月 9 日收購互聯網無障礙局 (BoIA) 的收入。企業渠道在 2022 年第四季度比上年同期增長約 26%並貢獻了約 45% 的收入和 42% 的 ARR。從全年來看，到 2022 年，我們的企業收入增長了 28%，從 2021 年的 1090 萬美元增長到 2022 年的 1390 萬美元。

Annual recurring revenue, or ARR, at the end of the fourth quarter of 2022 was $29.2 million, a 13% increase over ARR at the end of the fourth quarter of 2021. ARR is slightly lower from Q3 2022 ARR of $29.3 million because of enterprise contracts and renegotiations being excluded from ARR. As David mentioned, we expect ARR to return to sequential growth next quarter and accelerate over the remainder of 2023.

2022 年第四季度末年度經常性收入 (ARR) 為 2920 萬美元，比 2021 年第四季度末的 ARR 增長 13%。ARR 略低於 2022 年第三季度的 2930 萬美元 ARR，因為企業合同和重新談判被排除在 ARR 之外。正如大衛所提到的，我們預計 ARR 將在下個季度恢復連續增長，並在 2023 年剩餘時間內加速增長。

On December 31, 2022, our customer count was approximately 86,000, an increase from 81,000 customers on September 30, 2022, and an uptick of approximately 4,000 customers from December 31, 2021. The uptick was driven by higher enterprise, partner and marketplace customers.

截至 2022 年 12 月 31 日，我們的客戶數量約為 86,000 人，較 2022 年 9 月 30 日的 81,000 人有所增加，較 2021 年 12 月 31 日增加了約 4,000 人。這一增長是由更高的企業、合作夥伴和市場客戶推動的。

Gross profit for the fourth quarter was $6 million or about 77% of revenue compared to $4.8 million and 74% of revenue in Q4 of last year and 75% in Q3 2022. For the full year 2022, gross margins were approximately 76%, with gross profit increasing from $18.4 million in 2021 to $22.7 million in 2022. There are a number of factors that go into cost of revenue, including web hosting, customer support and other costs directly related to delivering the product. In 2022, we were able to drive these costs down but continue to add additional value such as reducing our average service time for remediation to less than 30 days and improving our automation. We expect gross margin to be around 77% going forward.

第四季度的毛利潤為 600 萬美元，約佔收入的 77%，去年第四季度為 480 萬美元，佔收入的 74%，2022 年第三季度為 75%。2022 年全年毛利率約為 76%，其中毛利潤從 2021 年的 1840 萬美元增加到 2022 年的 2270 萬美元。有許多因素會影響收入成本，包括網絡託管、客戶支持和其他與交付產品直接相關的成本。到 2022 年，我們能夠降低這些成本，但會繼續增加附加值，例如將我們的平均修復服務時間減少到不到 30 天，並提高我們的自動化程度。我們預計未來毛利率約為 77%。

With revenue up 19% year-over-year, operating expenses in the fourth quarter of 2022 decreased 19% to $7.9 million from $9.8 million in the same quarter last year. On a full year basis, revenue increased 22% while operating expenses reduced from $33.9 million in 2021 to $33.1 million in 2022. This quarterly and annual year-over-year decrease was driven primarily from efficiencies implemented in sales and marketing, which are continuing to produce impressive lead generation with lower investment needed and lower stock compensation expense, partially offset by investments in BoIA and R&D.

隨著收入同比增長 19%，2022 年第四季度的運營費用從去年同期的 980 萬美元下降 19% 至 790 萬美元。從全年來看，收入增長了 22%，而運營支出從 2021 年的 3390 萬美元減少到 2022 年的 3310 萬美元。季度和年度同比下降主要是由於銷售和營銷效率的提高，這些效率將繼續以較低的投資需求和較低的股票補償費用產生令人印象深刻的潛在客戶，部分被 BoIA 和研發投資所抵消。

Our total R&D spend in Q4 was approximately $1.9 million, with approximately $300,000 reflected as software development costs in the investing section of the cash flow statement. R&D spend for the full year 2022 was $7.2 million, inclusive of $1.2 million reflected as software development costs. This total R&D spend is around 25% of our Q4 and 2022 revenue compared to 24% of Q4 2021 revenue and 27% of full year 2021 revenue. We will continue to invest in R&D as we see opportunity to build out and maintain a best-in-class offering.

我們在第四季度的研發總支出約為 190 萬美元，其中約 300,000 美元反映在現金流量表投資部分的軟件開發成本中。 2022 年全年的研發支出為 720 萬美元，其中包括反映為軟件開發成本的 120 萬美元。研發總支出約占我們第四季度和 2022 年收入的 25%，而 2021 年第四季度收入的 24% 和 2021 年全年收入的 27%。我們將繼續投資於研發，因為我們看到了構建和維持一流產品的機會。

Net loss in the fourth quarter of 2022 was $1.9 million or $0.17 per share compared to a net loss of $5 million or $0.44 per share in the same year-ago period. On a full year basis, net loss for 2022 was $10.4 million or $0.91 per share compared to a net loss of $14.2 million or $1.29 per share in 2021.

2022 年第四季度的淨虧損為 190 萬美元或每股 0.17 美元，而去年同期為淨虧損 500 萬美元或每股 0.44 美元。按全年計算，2022 年的淨虧損為 1040 萬美元或每股 0.91 美元，而 2021 年的淨虧損為 1420 萬美元或每股 1.29 美元。

On a non-GAAP basis, in the fourth quarter of 2022, we are once again profitable with net income at approximately $200,000 or $0.01 per share compared to a non-GAAP net loss of $1.4 million or $0.12 per share in the same year-ago period.

按非美國通用會計準則計算，2022 年第四季度，我們再次實現盈利，淨收入約為 200,000 美元或每股 0.01 美元，而去年同期的非美國通用會計準則淨虧損為 140 萬美元或每股 0.12 美元時期。

On a full year basis, the 2022 non-GAAP net loss was approximately $900,000 or $0.08 per share compared to a non-GAAP net loss of $4.5 million or $0.41 per share in 2021. This is a dramatic improvement and was the result of revenue increase, improved margins and reductions in expenses.

按全年計算，2022 年非 GAAP 淨虧損約為 900,000 美元或每股 0.08 美元，而 2021 年非 GAAP 淨虧損為 450 萬美元或每股 0.41 美元。這是一個巨大的改善，是收入增長的結果，提高了利潤率並減少了費用。

The primary adjustments to GAAP earnings and EPS for Q4 2022 and full year 2022 were noncash share-based compensation, depreciation and amortization, litigation and other miscellaneous costs.

2022 年第四季度和 2022 年全年的 GAAP 收益和每股收益的主要調整是非現金股份補償、折舊和攤銷、訴訟和其他雜項費用。

Cash burn continued to improve sequentially from negative $1.4 million in Q3 2022 to negative $900,000 in the fourth quarter. The cash use of $900,000 was primarily related to software capitalization of approximately $300,000, $100,000 for tax payments related to employee share-based grants, $600,000 for nonrecurring litigation expenses, offset by non-GAAP earnings of approximately $200,000.

現金消耗繼續改善，從 2022 年第三季度的負 140 萬美元增加到第四季度的負 90 萬美元。 900,000 美元的現金使用主要與約 300,000 美元的軟件資本化、100,000 美元與員工股份贈款相關的稅款、600,000 美元的非經常性訴訟費用有關，被約 200,000 美元的非 GAAP 收益抵消。

Our balance sheet remains well capitalized with $6.9 million of cash and no debt on December 31, 2022. As mentioned on our last earnings call, we expect cash usage related to litigation to trend down materially starting in Q1 2023 as a result of the settlement in October 2022. We expect cash usage will increase in the first half of 2023, which will include continued R&D investment and an earn-out payment of BoIA. We believe the current cash on hand is sufficient, and we expect to see cash generating by Q4 2023.

到 2022 年 12 月 31 日，我們的資產負債表仍然資本充足，有 690 萬美元現金，沒有債務。正如我們在上一次財報電話會議上提到的，我們預計與訴訟相關的現金使用量將從 2023 年第一季度開始大幅下降，因為2022 年 10 月。我們預計現金使用量將在 2023 年上半年增加，其中包括持續的研發投資和 BoIA 的盈利支付。我們認為目前手頭現金充足，我們預計到 2023 年第四季度將產生現金。

With that, we open up the call for questions. Operator, please give instructions.

有了這個，我們打開了問題的電話。接線員，請指點。

(Operator Instructions) The first question comes from Scott Buck with H.C. Wainwright.

（操作員說明）第一個問題來自 H.C. 的 Scott Buck。溫賴特。

I'm curious, can you provide a little bit of additional color on maybe where some of the incremental R&D spending is going in 2023?

我很好奇，您能否提供一些額外的顏色來說明 2023 年一些增量研發支出的去向？

Sure. I'll take that one. We see opportunities in the market for continued product expansion that justifies increasing the R&D. We expect the additional R&D to generate a really good ROI for us. And as always, we're looking to weigh the risks on investments and against the risk/reward and the ROI potential.

當然。我會拿那個。我們在市場上看到了持續產品擴展的機會，這證明增加研發是合理的。我們希望額外的研發能夠為我們帶來非常好的投資回報率。與往常一樣，我們希望權衡投資風險以及風險/回報和潛在投資回報率。

I appreciate that, David. And then on the broader sales environment, is there something specific that would help accelerate those sales cycles? Or what are the conversations with potential customers like there? And what event gets them to kind of sign that dotted line?

我很感激，大衛。然後在更廣泛的銷售環境中，有沒有什麼具體的東西可以幫助加速這些銷售週期？或者與那裡的潛在客戶的對話是什麼？什麼事件讓他們在虛線上簽名？

Are you talking about enterprise or reseller?

您是在談論企業還是經銷商？

Yes, specifically on enterprise. What gets them off the fence from a macro standpoint?

是的，特別是在企業方面。從宏觀角度來看，是什麼讓他們擺脫困境？

Yes. Look, we've just seen an elongation of sales cycles, as we mentioned last quarter. We also have a couple of larger deals that were expiring where we're still in negotiations are. We're very bullish on the enterprise side, though. We're seeing close rates go up on smaller deals, so that's a good sign. But it is a tougher environment out there. We think it's going to grow, but it is tougher.

是的。看，正如我們上個季度提到的，我們剛剛看到銷售週期的延長。我們還有幾筆較大的交易即將到期，而我們仍在談判中。不過，我們非常看好企業方面。我們看到小額交易的收盤價上升，這是一個好兆頭。但那裡的環境更艱難。我們認為它會增長，但會更艱難。

All right. That's helpful. And then last, given the improved efficiency on the sales side, at what point does it make sense for you to put some additional dollars towards sales and marketing and then help drive acceleration in the top line?

好的。這很有幫助。最後，考慮到銷售方面效率的提高，您在什麼時候將一些額外的資金用於銷售和營銷然後幫助推動頂線的加速是有意義的？

Yes, I don't think we need to do that. We're pretty efficient on generating leads, as efficient as we have ever been. We expect the close rates to continue over time on the leads we are generating. We're generating a ton of leads. So I think we're going to grow revenue even in this tough macro backdrop with the current S&M spend.

是的，我認為我們不需要那樣做。我們在產生潛在客戶方面非常高效，與以往一樣高效。我們希望隨著時間的推移，我們正在產生的潛在客戶的收盤價會持續下去。我們正在產生大量的潛在客戶。因此，我認為即使在當前 S&M 支出的艱難宏觀背景下，我們也會增加收入。

All right. I appreciate the additional color, guys.

好的。伙計們，我很欣賞額外的顏色。

Thank you.

謝謝。

(Operator Instructions) The next question comes from Zach Cummins with B. Riley Securities.

（操作員說明）下一個問題來自 B. Riley Securities 的 Zach Cummins。

David, just starting off, it sounds like you've renegotiated a couple of partnerships in the channel partner side of it. I mean, can you talk about, I mean, the reasons for looking at renewed terms or different terms there? It seems like it's going to have a little bit of an impact here in the short term, but it seems like something that could be a win-win longer term.

大衛，剛剛開始，聽起來你已經在渠道合作夥伴方面重新談判了幾個合作夥伴關係。我的意思是，你能談談，我的意思是，在那裡查看更新條款或不同條款的原因嗎？短期內似乎會產生一些影響，但從長遠來看，這似乎是雙贏的。

Yes, that's right. Some partners out there are just feeling cost pressure, which was the main driver of most of the renegotiations. So in exchange, we're giving some short-term relief. We were able to extend contract terms significantly with nice step-ups. And this is a win-win. It puts us in a much better place over time.

恩，那就對了。一些合作夥伴只是感受到了成本壓力，這是大多數重新談判的主要驅動力。因此，作為交換，我們正在提供一些短期救濟。我們能夠通過良好的升級顯著延長合同條款。這是雙贏的。隨著時間的推移，它使我們處於一個更好的位置。

Got it. That's helpful. And then on the enterprise side, it sounds like you have a couple large renewals that are still ongoing. I mean can you give any sort of insight into how you feel about those likely coming back into the fold here within the next couple of months? Or any sort of incremental insight you can give into those renewals would be helpful.

知道了。這很有幫助。然後在企業方面，聽起來您有幾項大型續訂仍在進行中。我的意思是，您能否就您對那些可能在未來幾個月內回到這裡的人有何看法提供任何見解？或者，您可以對這些更新提供任何類型的增量洞察力，這將有所幫助。

Yes. We're just seeing that elongation of the sales cycle in a tougher environment. We have a couple of larger deals that were expiring. We're still in negotiations. Those couple of deals did reduce ARR at the end of the quarter. We're still working with them and still providing services, and hopefully, moving forward, to much bigger contracts with them. New business continues to be strong. We're closing it. It's just these couple of deals we're working through, and we think we're going to get them in a good place. But we'll grow regardless.

是的。我們只是在更艱難的環境中看到銷售週期的延長。我們有幾筆較大的交易即將到期。我們仍在談判中。這兩筆交易確實在本季度末降低了 ARR。我們仍在與他們合作，仍在提供服務，並希望向前邁進，與他們簽訂更大的合同。新業務繼續強勁。我們正在關閉它。我們正在處理的只是這幾筆交易，我們認為我們會把它們放在一個好的地方。但無論如何我們都會成長。

Got it. That's helpful. And final question is just really on the new Chief Revenue Officer hire. I mean you called it out a little bit within the script. But I mean, give us some insight into why you had to shake up in terms of leadership there, on the sales side of it? And is there going to be any sort of changes in terms of how you attack the enterprise or the partner channels?

知道了。這很有幫助。最後一個問題是關於新任首席營收官的聘用。我的意思是你在劇本中稍微強調了一下。但我的意思是，讓我們了解一下為什麼您必須在銷售方面的領導層方面進行重組？在您攻擊企業或合作夥伴渠道的方式方面是否會有任何變化？

Yes. Mikel is a rock star. He has a proven track record and has scaled of multiple companies. He has been a CRO before. We just think he's the right fit for the right time, and he's going to help us unlock a ton of potential in sales and marketing. He's done this before. So I think it's really good.

是的。米克爾是搖滾明星。他擁有良好的業績記錄，並在多家公司進行過擴展。他以前做過CRO。我們只是認為他在合適的時間合適，他將幫助我們釋放大量的銷售和營銷潛力。他以前做過這個。所以我覺得這真的很好。

Got it. Best of luck with the rest of the quarter.

知道了。祝本季度剩下的時間好運。

Thanks so much.

非常感謝。

And we have a follow-up from Scott Buck with H.C. Wainwright.

我們有 H.C. Scott Buck 的後續行動。溫賴特。

Guys, I figure I'd throw one more at you here. Dave, I wonder if you could speak a little bit to the competitive environment and maybe how some of your peers are addressing a more challenging environment.

伙計們，我想我會在這裡再向你們扔一個。戴夫，我想知道你是否可以談談競爭環境以及你的一些同行如何應對更具挑戰性的環境。

Yes. The market is still pretty fragmented. Look, we like the competition. We're confident that we have the best product. We actually think we're outperforming the market today based on checks. And we have some very exciting things coming soon, so stay tuned.

是的。市場仍然相當分散。看，我們喜歡競爭。我們相信我們擁有最好的產品。我們實際上認為我們今天基於支票的表現優於市場。我們即將推出一些非常令人興奮的事情，敬請期待。

At this time, this concludes our question-and-answer session. I'd now like to turn the call back over to Mr. Moradi for his closing comments.

至此，我們的問答環節到此結束。我現在想把電話轉回給莫拉迪先生，聽取他的結束評論。

Thank you for joining us today. As always, I want to thank our employees, partners and investors for their continued support. We look forward to updating you on our next call.

感謝您今天加入我們。一如既往，我要感謝我們的員工、合作夥伴和投資者一直以來的支持。我們期待在下次通話時為您更新。

Before we conclude today's call, I would like to remind everyone that a recording of today's call will be available for replay via a link available in the Investors section of the company's website.

在我們結束今天的電話會議之前，我想提醒大家，今天的電話會議錄音可以通過公司網站投資者部分的鏈接重播。

Thank you for joining us today for AudioEye's Fourth Quarter and Full Year 2022 Earnings Conference Call. You may now disconnect.

感謝您今天加入我們參加 AudioEye 的第四季度和 2022 年全年收益電話會議。您現在可以斷開連接。