AudioEye Inc (AEYE) 2024 Q2 法說會逐字稿

Good afternoon, and welcome to AudioEye's second quarter 2024 earnings conference call. Joining us for today's call our AudioEye CEO, Mr. David Moradi; and CFO, Ms. Kelly Georgevich. Following their remarks, we will open the call for questions from the company's publishing analysts.

下午好，歡迎參加 AudioEye 2024 年第二季財報電話會議。加入我們今天的電話會議，我們的 AudioEye 執行長 David Moradi 先生；和財務長凱莉·喬治維奇女士。在他們發表演說後，我們將開始向該公司的出版分析師提問。

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，本次電話會議將會被錄音，並可透過公司網站 www.audioeye.com 投資者關係部分的連結重播。

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 they 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.

在我將電話轉交給 AudioEye 執行長之前，該公司想提醒所有參與者，AudioEye 管理層在本次電話會議期間發表的聲明並非歷史事實，而是前瞻性聲明。1995 年《私人證券訴訟改革法案》為此類前瞻性聲明提供了安全港。

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.

「相信」、「期望」、「預期」、「估計」、「有信心」、「意願」等字眼以及其他類似的期望陳述均屬於前瞻性陳述。這些陳述是對未來事件的預測、預測或其他陳述，基於當前的預期和假設，存在風險和不確定性。

Actual results could materially differ because of factors discussed in today's press release and the comments made during this conference call and in the Risk Factors section of the company's annual report on Form 10-K, its quarterly reports on Form 10-Q and in its other reports and 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.

由於今天的新聞稿中討論的因素以及本次電話會議期間以及公司 10-K 表格年度報告、10-Q 表格季度報告以及其他報告中風險因素部分的評論，實際結果可能存在重大差異。交易委員會提交的報告和備案。請參加本次電話會議的參與者不要過度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 不承擔更新或更正任何前瞻性聲明的義務。

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 or otherwise posted in the Investor Relations section of its website at www.audioeye.com.

今天管理階層​​的進一步演講將包括某些非公認會計準則財務指標。最直接可比較的 GAAP 財務指標與這些非 GAAP 財務指標的調整表可在公司的收益報告中找到，或以其他方式發佈在其網站 www.audioeye.com 的投資者關係部分。

Now I'd like to turn the call over to AudioEye's Chief Executive Officer, Mr. David Moradi. Sir, please proceed.

現在我想將電話轉給 AudioEye 執行長 David Moradi 先生。先生，請繼續。

Thank you, operator. We're pleased to report that our business momentum is strong. Sequential revenues grew from approximately $8.1 million to $8.5 million, representing an annualized growth rate of 19%. ARR increased sequentially by $1.3 million, an increase of 60% compared to ARR growth of $800,000 in the first quarter.

謝謝你，接線生。我們很高興地報告，我們的業務勢頭強勁。連續收入從約 810 萬美元增長至 850 萬美元，年增長率為 19%。ARR 環比成長 130 萬美元，較第一季的 ARR 成長 80 萬美元成長 60%。

We were able to grow revenues and ARR without adding additional costs with operating expenses roughly flat sequentially. As a result of revenue growth and prudent expense management, we generated record adjusted EBITDA of approximately $1.5 million, a margin of 17%.

我們能夠在不增加額外成本的情況下增加收入和 ARR，營運費用與上一季基本持平。由於營收成長和審慎的費用管理，我們創造了約 150 萬美元的創紀錄的調整後 EBITDA，利潤率為 17%。

Looking at free cash flow in terms of EBITDA minus CapEx, we generated a record $1 million of free cash flow from operations. We were close to achieving the Rule of 40 in the second quarter and expecting to hit the Rule of 40 in the third quarter.

以 EBITDA 減去資本支出來衡量自由現金流，我們從營運中產生了創紀錄的 100 萬美元自由現金流。我們在第二季接近實現 40 法則，並預計在第三季達到 40 法則。

We saw notable growth in both our enterprise and partner marketplace channels with both channels contributing equally to revenue growth sequentially. The enterprise channel is growing at the fastest rate in several years due to our investment in R&D and the effective implementation of our go-to-market approach. We are excited to report that this momentum is continuing and driving a further increase in our full year guidance, which I will discuss shortly.

我們看到企業和合作夥伴市場管道均顯著成長，這兩個管道對收入成長的貢獻相同。由於我們對研發的投資和市場進入方法的有效實施，企業通路正以幾年來最快的速度成長。我們很高興地報告，這種勢頭正在持續，並推動我們的全年指導進一步提高，我將很快討論這一點。

I'll now cover a few other notable developments and the quarter. On our April earnings call, we discussed significant regulatory developments for digital accessibility, including the Department of Justice's final rule under Title II of the Americans with Disabilities Act, which mandates that state and local government entities ensure their websites and mobile applications are accessible to people with disabilities.

我現在將介紹本季的一些其他值得注意的進展。在四月份的財報電話會議上，我們討論了數位無障礙方面的重大監管進展，包括司法部根據《美國殘疾人法案》第二章制定的最終規則，該規則要求州和地方政府實體確保人們可以訪問其網站和行動應用程式患有殘疾。

The regulation apply to a wide range of state and local government entities, including public schools, community colleges, universities, hospitals and clinics, police departments, library and transit agencies. Shortly after the Title II announcement, the Department of Health and Human Services Office for Civil Rights published a final rule that bolsters protections for individuals with disabilities under Section 504 of the Rehabilitation Act.

該法規適用於廣泛的州和地方政府實體，包括公立學校、社區學院、大學、醫院和診所、警察部門、圖書館和交通機構。在第二章宣布後不久，衛生與公共服務部民權辦公室發布了一項最終規則，根據《康復法》第 504 條加強對殘疾人的保護。

The rules stipulate that web content and mobile applications provided by organizations that receive funding from HHS, including hospitals, doctors' offices, social services, nursing homes and others, our accessible for people with disabilities.

該規則規定，由接受 HHS 資助的組織（包括醫院、醫生辦公室、社會服務機構、療養院等）提供的網路內容和行動應用程式可供殘疾人使用。

Like the DOJ Title II rule. The HHS will outline specific digital accessibility requirements, including adherence to WCAG 2.1 and requires compliance by May 2026 or May 2027, depending on the organization size. To understand the impact of the HHS rule, we scanned over 96,000 healthcare website pages over the United States. The average page had 84 accessibility issues, which is alarming. Approximately 96% of the Internet is currently inaccessible to people with disabilities. Title II and HHS represents significant expansion opportunities and we are uniquely positioned to meet the increase in demand with our direct sales team and reseller channel.

就像司法部第二章規則。HHS 將概述具體的數位可訪問性要求，包括遵守 WCAG 2.1，並要求在 2026 年 5 月或 2027 年 5 月之前遵守規定，具體取決於組織規模。為了了解 HHS 規則的影響，我們掃描了美國 96,000 多個醫療保健網站頁面。平均頁面有 84 個可訪問性問題，這令人震驚。目前，殘疾人士無法使用大約 96% 的網路。Title II 和 HHS 代表著重大的擴張機會，我們擁有獨特的優勢，可以透過我們的直銷團隊和經銷商管道滿足需求的成長。

Our AI and human assistance technology approach is the only way to address a problem -- at scale and deliver solutions to millions of websites. Over the last three months, we have been working hard to develop strategic initiatives and growth plans with our existing partners, including Finalsite the market share leader in K-12 schools. The goal is to penetrate all of their installed base over the next three years with a comprehensive go-to-market plan. Both of us will contribute significant resources to make this happen.

我們的人工智慧和人工輔助技術方法是大規模解決問題並向數百萬網站提供解決方案的唯一方法。在過去的三個月裡，我們一直在努力與現有合作夥伴（包括 K-12 學校市場份額領導者 Finalsite）制定策略性舉措和成長計畫。我們的目標是在未來三年內透過全面的上市計劃滲透到所有安裝基礎。我們雙方都將貢獻大量資源來實現這一目標。

There is a significant opportunity to penetrate other industries under Title II and HHS, which includes state and local government, higher education and the healthcare industry. We already have a partnership with the dominant platform for cities, towns, and municipalities as well as key partnerships in the healthcare industry. We expect to create new partnerships in these industries as we execute our go-to-market plan and expect further announcements soon. We are also monitoring demand from the European Accessibility Act and California's AB 1757 legislation. We expect to see further developments on these items over the next few months.

有機會滲透到第二章和 HHS 規定的其他行業，其中包括州和地方政府、高等教育和醫療保健行業。我們已經與城市、城鎮和直轄市的主導平台以及醫療保健行業的重要合作夥伴建立了合作夥伴關係。我們希望在執行上市計劃時在這些行業建立新的合作夥伴關係，並預計很快就會發布進一步公告。我們也正在監控《歐洲無障礙法案》和加州 AB 1757 立法的需求。我們預計在未來幾個月內會看到這些項目的進一步發展。

Moving on to guidance, we continue to expect quarterly revenues to increase without significant additional expense, resulting in increased operating leverage and cash flow generation. For the third quarter, we are guiding for revenue between $8.85 million to $8.95 million, representing an annualized growth rate of approximately 20%. We expect to generate adjusted EBITDA between $1.85 million to $1.95 million and adjusted EPS between $0.15 and $0.16. We expect to become a Rule of 40 company in the third quarter with the potential to increase growth rates and adjusted EBITDA margins in 2025 and beyond.

轉向指導，我們繼續預計季度收入將增加，而不會產生大量額外費用，從而提高營運槓桿和現金流量的產生。對於第三季度，我們預計營收在 885 萬美元至 895 萬美元之間，年化成長率約為 20%。我們預計調整後的 EBITDA 為 185 萬美元至 195 萬美元，調整後的每股收益為 0.15 美元至 0.16 美元。我們預計將在第三季成為 40 強公司，並有可能在 2025 年及以後提高成長率和調整後 EBITDA 利潤率。

We are increasing our 2024 revenue guidance to between $34.5 million and $34.8 million. We are also increasing our adjusted EBITDA guidance from $4.5 million to $5.5 million to $6 million to $6.3 million. Adjusted EPS is now expected to be between $0.48 and $0.51 per share, an increase of $0.08 at the midpoint. This represents an increase of around 18% from previous guidance.

我們將 2024 年收入指引提高至 3,450 萬美元至 3,480 萬美元。我們還將調整後的 EBITDA 指引從 450 萬美元提高到 550 萬美元，提高到 600 萬美元到 630 萬美元。調整後每股收益目前預計為每股 0.48 美元至 0.51 美元，中間值增加 0.08 美元。這比之前的指導增加了約 18%。

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

我現在將電話轉給 AudioEye 的財務長 Kelly？

Thank you, David. As David discussed, revenue again, hit record levels with Q2 2024 revenue at $8.5 million, marking our 34th quarter of record revenue and a 19% annualized growth rate. Annual recurring revenue or ARR at the end of the second quarter of 2024 was $33.3 million, a $1.3 million increase and a 60% improvement in ARR growth from the first quarter of 2024.

謝謝你，大衛。正如 David 所討論的，營收再次創下歷史新高，2024 年第二季營收達到 850 萬美元，標誌著我們第 34 個季度營收創紀錄，年化成長率為 19%。截至 2024 年第二季末，年度經常性收入 (ARR) 為 3,330 萬美元，較 2024 年第一季增加 130 萬美元，ARR 成長提高 60%。

Our two revenue channels are both showing strong performance with high teen annualized sequential growth rates in both channels. The partner marketplace channel includes all revenue from our SMB focused marketplace products and revenue from a variety of partners who deployed the same products for their SMB customers. In the second quarter of 2024 this revenue channel grew 13% year-over-year, representing 59% of revenue and around 60% of ARR.

我們的兩個營收管道都表現出強勁的業績，兩個通路的年化連續成長率都很高。合作夥伴市場管道包括我們專注於中小企業的市場產品的所有收入以及來自為其中小型企業客戶部署相同產品的各種合作夥伴的收入。2024 年第二季度，該營收管道年增 13%，佔營收的 59%，約佔 ARR 的 60%。

AudioEye's enterprise channel consists of our larger customers and organizations, including those with non-platform websites who generally engage directly with AudioEye sales personnel for pricing and solution. The enterprise channels grew 2% year-over-year and 5% sequentially or 18% annualized. In the second quarter, the enterprise channel contributed 41% of revenue and around 40% of ARR.

AudioEye 的企業管道由我們較大的客戶和組織組成，包括擁有非平台網站的客戶和組織，他們通常直接與 AudioEye 銷售人員聯繫以獲取定價和解決方案。企業通路年增 2%，季增 5%，年化成長 18%。第二季度，企業通路貢獻了41%的營收和約40%的ARR。

On June 30, 2024 our customer count was approximately 121,000, a 16% increase from 104,000 customers on June 30, 2023, and an increase of approximately 9,000 customers from March 31, 2024. The increase in customer count was driven by additions in both the partner marketplace and enterprise channel. Gross profit ticked up 1% sequentially and 2% year-over-year to 79% of revenue or $6.7 million compared to $6 million in Q2 of last year.

截至2024年6月30日，我們的客戶數量約為121,000名，較2023年6月30日的104,000名客戶增加16%，較2024年3月31日增加約9,000名客戶。客戶數量的增加是由合作夥伴市場和企業通路的增加所推動的。毛利環比成長 1%，年增 2%，佔營收的 79%，即 670 萬美元，而去年第二季為 600 萬美元。

The increase in gross margin was the result of approximately $650,000 of revenue growth year-over-year and a $25,000 decrease in cost of revenue over the same period. While revenues increased approximately $650,000 from the second quarter of 2023. Operating expenses decreased approximately 11% or $900,000 to $7.2 million. The decrease in operating expenses was due primarily to increased efficiencies in sales and marketing and the completion of significant initiatives in R&D partially offset by higher non-reoccurring expenses and G&A.

毛利率的成長是由於營收年增約 65 萬美元以及同期收入成本下降 2.5 萬美元。而營收較 2023 年第二季增加約 65 萬美元。營運費用減少約 11%，即 90 萬美元，降至 720 萬美元。營運費用的減少主要是由於銷售和行銷效率的提高以及研發重大舉措的完成，但部分被非經常性費用和一般管理費用的增加所抵消。

Our total R&D spend in Q2 2024 with approximately $1.7 million with approximately $450,000 reflected the software development costs in the investing section of the cash flow statement. This was down approximately $900,000 from $2.6 million in Q2 2023. The total R&D spend is about 20% of our revenue this quarter versus 33% in the comparable period of prior year and 22% in the first quarter of 2024.

我們 2024 年第二季的研發總支出約為 170 萬美元，其中約 45 萬美元反映了現金流量表投資部分的軟體開發成本。這比 2023 年第二季的 260 萬美元減少了約 90 萬美元。本季研發總支出約占我們營收的 20%，而去年同期為 33%，2024 年第一季為 22%。

We continue to believe the current investment in R&D at around 20% is appropriate for 2024. Net loss in the second quarter of 2024 was $700,000 or $0.06 per share compared to a net loss of $2 million or $0.17 per share in the same year ago period. Total net loss decreased 63% or $1.2 million from the prior year's comparable period, driven by an increase in revenue, strategic and efficient spending in sales and marketing and technological investments.

我們仍然認為，目前 20% 左右的研發投資對於 2024 年是合適的。2024 年第二季的淨虧損為 70 萬美元，即每股 0.06 美元，而去年同期的淨虧損為 200 萬美元，即每股 0.17 美元。由於收入增加、銷售和行銷以及技術投資方面的策略性和高效支出的推動，淨虧損總額比上年同期下降了 63%，即 120 萬美元。

Our Q2 adjusted EBITDA was a record $1.5 million or $0.12 per share, a $1.7 million improvement year-over-year. The primary adjustments to GAAP earnings and EPS for Q2 2024 for non-cash share-based compensation, depreciation, amortization, interest expense, and litigation expense.

第二季調整後 EBITDA 達到創紀錄的 150 萬美元，即每股 0.12 美元，比去年同期增加 170 萬美元。對 2024 年第二季 GAAP 收益和每股盈餘的主要調整，包括非現金股份薪酬、折舊、攤提、利息費用和訴訟費用。

Our balance sheet continues to be well capitalized with $5.1 million of cash as of June 30, 2024. Cash decreased by approximately $1.9 million in the quarter, primarily due to a $2.4 million final earn-out payment related to the acquisition of the Bureau of Internet Accessibility in March 2022.

截至 2024 年 6 月 30 日，我們的資產負債表資本充足，現金為 510 萬美元。本季現金減少約 190 萬美元，主要是因為與 2022 年 3 月收購網路接取局相關的最終收益支付 240 萬美元。

In the second quarter of 2024, we also repurchased approximately $300,000 of shares and received net proceeds from our at-the-market offering of approximately $650,000. Free cash flow calculated as $1.5 million of adjusted EBITDA was $450,000 of software development costs was $1 million in the second quarter. We expect free cash flow to continue to increase in the third and fourth quarter of 2024.

2024 年第二季度，我們還回購了約 30 萬美元的股票，並從我們的市場發行中獲得了約 65 萬美元的淨收益。第二季自由現金流計算為 150 萬美元，調整後 EBITDA 為 45 萬美元，軟體開發成本為 100 萬美元。我們預計 2024 年第三季和第四季自由現金流將持續增加。

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

至此，我們開始提問。操作員，請給予適當的指示。

(Operator Instructions) Richard Baldry, ROTH.

（操作員說明）Richard Baldry，ROTH。

Thanks. You've done a really good job for growing your just EBITDA pretty fast as revenues start to grow again, even in a sort of a cost containment or cutting mode. How do you feel about the existing sort of infrastructure headcount in different places if the growth continues to pick up the way it has. When do you feel like you really kind of need to get back to hiring, whether that's in sales or support areas to support the increasing revenue base?

謝謝。即使在某種成本控製或削減模式下，隨著收入開始再次成長，您的 EBITDA 成長速度非常快，這方面做得非常好。如果成長持續加快，您對不同地方現有的基礎設施人員數量有何看法？您什麼時候覺得自己確實需要重新招聘，無論是在銷售還是支援領域，以支持不斷增長的收入基礎？

Thanks.

謝謝。

Hi, Rich. Yeah. As you can see the model pretty scalable, we've made a lot of investments in R&D and the go to market, there would be some incremental investments generally to generate and then support new business. But a good amount of incremental revenue I think is going to drop straight down. So I don't think we need to invest a ton more, just mostly on sales and marketing, not the infrastructure number.

嗨，里奇。是的。正如您所看到的，該模型具有相當大的可擴展性，我們在研發和上市方面進行了大量投資，通常會有一些增量投資來產生並支持新業務。但我認為大量增量收入將直接下降。因此，我認為我們不需要投入更多資金，主要是在銷售和行銷方面，而不是基礎設施方面。

Yeah, I wanted to ask specifically about the COGS line, because it's been flat to down even on a sequential basis or pretty steadily for almost last two years. What would cause that to start to climb again? Like how fixed can that be as your top line grows?

是的，我想具體詢問銷貨成本線，因為即使在連續的基礎上，它也一直持平甚至下降，或者在過去兩年中相當穩定。什麼會導致其再次開始攀升？隨著您的收入成長，這個問題可以固定到什麼程度？

Yeah. We've been happy to see gross margin improve now to 79%. We feel pretty good about the efficiencies we've ran through that line. It is a matter of looking at the mix to support different investments in that line, but we feel pretty good about holding that 79% through 2024 and kind of continuing into 2025. We feel pretty good about our gross margins overall.

是的。我們很高興看到毛利率現已提高至 79%。我們對這條生產線的效率感到非常滿意。問題是要考慮如何支持該領域的不同投資，但我們對於在 2024 年之前持有 79% 的股權並繼續到 2025 年感到非常滿意。我們對整體毛利率感覺良好。

Got it. And can you talk a little bit about the balance sheet, your access to capital is obviously a lot better in recent periods now. Does that change sort of any of your acquisition plans or willingness to sort of invest in the business on a more accelerated basis, how comfortable do you feel what the debt levels are they're at would prefer basically just wipe them out ASAP and then move forward from there? Just help us think about that a little bit. Thanks.

知道了。您能談談資產負債表嗎？這是否會改變您的任何收購計劃或以更快的速度投資於該業務的意願，您對他們目前的債務水平感覺如何？ 基本上希望盡快消滅它們，然後轉移從那裡前進？請幫助我們思考一下。謝謝。

Yeah. We feel pretty good. Kelly can get into the ATM a little bit. I don't think we really need money. But the good news we're cash flow generative. Kelly, I'll get into the ATM a little bit, though.

是的。我們感覺很好。凱莉可以進一點ATM。我不認為我們真的需要錢。但好消息是我們可以產生現金流。凱利，不過我會稍微去一下自動櫃員機。

Yeah, we did open an ATM for a relatively small amount compared to our market cap of the $7 million. We do like to have that debt there and be opportunistic about potentially raising capital to pay down our debt reduced earnings interest expense.

是的，與我們 700 萬美元的市值相比，我們確實以相對較小的金額開設了 ATM。我們確實希望在那裡擁有這筆債務，並機會主義地籌集資金來償還我們的債務，從而減少收益利息支出。

And maybe just a few seconds on how you do view acquisition potential now that you've got a much larger market cap to sort of deal with?

既然您有更大的市值需要處理，也許只需幾秒鐘您如何看待收購潛力？

We don't really discuss M&A. We're always looking around, but we're not going to discuss it on this call.

我們並不真正討論併購。我們一直在四處尋找，但我們不會在這次電話會議上討論這個問題。

Okay. Thanks for your help.

好的。感謝您的協助。

Thank you.

謝謝。

Zach Cummins, B. Riley Securities.

康明斯 (Zach Cummins)，B. 萊利證券 (Riley Securities)。

Hi, good afternoon, David and Kelly, congrats on the solid results and thank you for taking my questions. David just first one for me is, can you just talk about the progress you're seeing in the enterprise channel there? Really what sort of momentum are you expecting to see there in the coming quarters as you've really started to regain traction, but with that segment returning to year-over-year growth?

嗨，下午好，大衛和凱利，祝賀取得的紮實成果，並感謝您回答我的問題。大衛對我來說第一個問題是，您能談談您在企業通路中看到的進展嗎？當您真正開始重新獲得吸引力時，您預計在未來幾季會看到什麼樣的勢頭，但隨著該細分市場恢復同比增長？

Yeah. It's been pretty good. We've made a lot of investments there in R&D, which really gives us a full product suite to beat the competition. We've also made a lot of investments in our go to market, and we're seeing record leads, strong conversions the pipelines continue to grow. So it's really clicking. I think we're outgrowing the market generally 2x to 3x right now.

是的。已經很不錯了。我們在研發方面進行了大量投資，這確實為我們提供了完整的產品套件來擊敗競爭對手。我們也在市場開拓方面進行了大量投資，我們看到了創紀錄的領先優勢、強勁的轉換率以及通路的持續成長。所以它真的很點擊。我認為我們目前的成長速度一般是市場的 2 倍到 3 倍。

Got it. And my follow-up question is really just around your partnerships. I think on the prior call you mentioned that just within your current partners, you had access to 80,000 websites. That would be really great targets under the new regulation. Can you talk about obviously you've made more inroads with a final site, but can you talk about some of the work that you're doing on that side to really accelerate momentum within that partner channel?

知道了。我的後續問題其實只是圍繞著你們的合作關係。我想您在先前的電話會議中提到，僅在您目前的合作夥伴中，您就可以訪問 80,000 個網站。根據新規定，這將是非常好的目標。您能否談談顯然您在最終網站上取得了更多進展，但是您能否談談您在這方面所做的一些工作，以真正加速該合作夥伴渠道內的勢頭？

You saw the press release. We're both super excited about the opportunity and penetrating their entire customer base. Both of us are going to have a huge focus on it, deploy resources. And really the opportunity for Title II is huge, and we're in a great spot, but the gap dominant platform in K-12. So we're really excited about that one and more to come on the other one. So stay tuned.

你看到了新聞稿。我們都對這個機會感到非常興奮，並滲透到他們的整個客戶群。我們雙方都會非常關注它，部署資源。事實上，Title II 的機會是巨大的，我們處於一個很好的位置，但在 K-12 中差距占主導地位。因此，我們對這一項以及另一項的出現感到非常興奮。所以請繼續關注。

Thanks for taking my questions and best of luck with the rest of the quarter.

感謝您提出我的問題，祝本季剩餘時間一切順利。

Thanks, Zach.

謝謝，扎克。

George Sutton, Craig-Hallum Capital.

喬治·薩頓，克雷格·哈勒姆資本。

Good afternoon. This is [James] on for George. Nice results. As a follow-up to the Finalsite commentary can you provide some more detail on sort of what those resources are that you might be contributing quantify any incremental costs? And then how should we kind of think about operating expense growth or operating leverage over the next couple of years as you target some of these mandated opportunities?

午安.這是[詹姆斯]為喬治代言的。不錯的結果。作為 Finalsite 評論的後續內容，您能否提供更多詳細信息，說明您可能貢獻的資源是什麼，並量化增量成本？那麼，當您瞄準其中一些強制性機會時，我們應該如何考慮未來幾年的營運費用成長或營運槓桿？

Yeah. We're not really getting into the details of the confidential contract. But I would say the marketing resources and awareness campaigns, co-marketing, but I can't really get into all the details that we're going to do.

是的。我們並沒有真正深入了解保密合約的細節。但我會說行銷資源和意識活動、聯合行銷，但我無法真正了解我們要做的所有細節。

What was the second part of your question?

你問題的第二部分是什麼？

Just sort of how to think about operating leverage, operating expense growth over the next couple of years, sort of as you target these mandate opportunities just because since you're kind of going indirectly, I'd assume there wouldn't be a lot of incremental expense as you sort of add new customers?

只是如何思考未來幾年的營運槓桿、營運費用成長，就像你瞄準這些授權機會一樣，因為既然你是間接的，我認為不會有太多當您增加新客戶時，增量費用是多少？

Yeah. I think we feel pretty good with where we're at. We've already made the investments. Like I said, in R&D model is scalable. So we feel good about investing a little bit on sales and marketing in the future potentially. But like I said before, I think that it's a scalable model with potential to really increase margin.

是的。我認為我們對目前的處境感覺很好。我們已經進行了投資。就像我說的，研發模式是可擴展的。因此，我們對未來在銷售和行銷方面進行一些投資感到滿意。但正如我之前所說，我認為這是一個可擴展的模型，有可能真正增加利潤。

Sounds good. And then just also kind of curious any initial interactions you may had with some of the constituents, but they're going to be impacted by the mandate. That's it for me. Thanks, guys.

聽起來不錯。然後，我也對您可能與某些選民進行的任何初步互動感到好奇，但他們將受到該授權的影響。對我來說就是這樣。多謝你們。

Constituents, I'm trying to understand that.

選民們，我正在努力理解這一點。

Just basically people that would be impacted by the mandate. So any government agencies, anybody that's?

基本上只是受該指令影響的人。那麼有政府機構嗎？

Yeah. We're seeing a lot of government leads come in more than ever. So we're having a lot of conversations at the moment. Those deals are all closing, but we're having a lot of conversations. So they're very aware of it I think it's going to start to tick up into 2025 from a demand standpoint. We don't have this in our numbers for this year at all.

是的。我們看到許多政府領導的介入比以往任何時候都多。所以我們現在正在進行很多對話。這些交易都即將完成，但我們正在進行許多對話。所以他們非常清楚這一點，我認為從需求的角度來看，到 2025 年它將開始上升。我們今年的數據中根本沒有這一點。

Great. Thank you.

偉大的。謝謝。

Thank you.

謝謝。

Scott Buck, H.C. Wainwright & Co, LLC

巴克 (Scott Buck)，H.C.溫賴特有限公司

Thanks for taking my questions. David, as a bit of a follow-up to that last question. I'm curious, historically, have you seen customers be proactive in addressing these mandates or typically does it take and more of a push past the mandate date, whether that's DOJ lawsuits or whatnot to really get people moving in the right direction?

感謝您回答我的問題。大衛，作為最後一個問題的後續行動。我很好奇，從歷史上看，您是否看到客戶積極主動地解決這些任務，或者通常需要在任務日期之後進行更多的推動，無論是司法部的訴訟還是其他什麼，才能真正讓人們朝著正確的方向前進？

We don't have a lot of experience with this. So I can't really tell you there's a lot of mandates happening at the moment with the EU, Title II and HHS. now. So we'll have to see how that plays out, my guess is in 2025, it's going to really start to pick up.

我們在這方面沒有太多經驗。所以我真的不能告訴你，目前歐盟、第二條和美國衛生與公共服務部正在執行很多任務。現在。所以我們必須看看情況如何，我猜 2025 年，它會真正開始好轉。

Right. Okay. So that's perfect. And then in terms of capital allocation, as you guys build cash through the remainder of the year and into next with positive free cash flow. How are you thinking about allocation? I mean, do you start piling more into marketing at that point, too, further accelerate growth? Or just what are your thoughts there?

正確的。好的。所以這就完美了。然後就資本配置而言，你們在今年剩餘時間內累積現金，並在明年以正的自由現金流進入。您如何考慮分配？我的意思是，您是否也開始在行銷方面投入更多精力，進一步加速成長？或者你有什麼想法？

We like being profitable. If you look at the LTV to CAC increases, we'd look to potentially spend more on sales and marketing there, but that would really have to take up, but we'd like to run off free cash flow. So expect that to continue.

我們喜歡獲利。如果你看看 LTV 與 CAC 的增加，我們可能會在銷售和行銷上花費更多，但這確實需要佔用，但我們希望耗盡自由現金流。所以預計這種情況會持續下去。

Okay. And then last thing I know you guys are purchasing shares during the quarter stock's obviously moved in your favor. How are you feeling about the repurchase today. And then what's left on that authorization?

好的。最後我知道你們在本季買股票，股票顯然對你們有利。今天回購你感覺如何？那麼該授權還剩下什麼？

Yeah. We are buying the stock pretty cheap, like I don't know, two to three times revenue and it's a lot higher. So I don't know if we're going to be buying back anymore and we have an ATM out there. So I don't think so, on the buyback side.

是的。我們以相當便宜的價格購買股票，我不知道，是收入的兩到三倍，而且要高得多。所以我不知道我們是否會再回購，而且我們有一台自動櫃員機。所以我不這麼認為，在回購方面。

Yeah. All right. Appreciate it, guys. Thanks for the time.

是的。好的。非常感謝，夥計們。謝謝你的時間。

Thank you. This concludes our question-and-answer session, I'd like to turn the call back over to Mr. Moradi for his closing.

謝謝。我們的問答環節到此結束，我想將電話轉回給莫拉迪先生以結束發言。

Thank you for joining us today. I wanted 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。我要感謝我們的員工、合作夥伴和投資者的持續支持。我們期待下次通話時向您通報最新情況。

And 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. Thank you for joining us today for AudioEye's second quarter 2024 earnings conference call. You may now disconnect.

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將透過公司網站投資者部分的連結進行重播。感謝您今天加入我們參加 AudioEye 2024 年第二季財報電話會議。您現在可以斷開連線。