AudioEye Inc (AEYE) 2025 Q1 法說會逐字稿

Good afternoon, and welcome to AudioEye's first quarter 2025 earnings conference call. Joining us for today's call are AudioEye's CEO, Mr. David Moradi and CFO, Ms. Kelly Georgevich.

下午好，歡迎參加 AudioEye 2025 年第一季財報電話會議。參加今天電話會議的有 AudioEye 的執行長 David Moradi 先生和財務長 Kelly Georgevich 女士。

Following their remarks, we will open the call for questions from the company's publishing analysts. 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.

在他們發言之後，我們將開始向該公司的出版分析師提問。我想提醒大家，本次電話會議將被錄音，並可透過公司網站 www.audioeye.com 投資者關係部分提供的連結重播。

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 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.

在我將電話轉給 AudioEye 的執行長之前，公司想提醒所有參與者，AudioEye 管理層在本次電話會議期間所作的非歷史事實的陳述均被視為前瞻性陳述。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、將會及其他類似的預期表述均屬於前瞻性陳述。這些陳述是對未來事件的預測、預期或其他陳述，基於受風險和不確定性影響的當前預期和假設。

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 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 beliefs 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、本次電話會議期間發表的評論以及公司 10-K 表年度報告、10-Q 表季度報告和向美國證券交易委員會提交的其他報告和文件中的風險因素部分所列的評論，實際結果可能會有重大差異。本次電話會議的參與者請注意不要過度依賴這些前瞻性陳述，這些陳述僅反映管理階層截至本電話會議之日的看法。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.

此外，管理階層今天的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 財務指標的對帳表可在公司的收益報告中查閱，也可以在其網站 www.audioeye.com 的投資者關係部分中發布。

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

現在我想把電話轉給 AudioEye 的執行長 David Moradi 先生。先生，請繼續。

Thank you, operator, and welcome to everyone joining us today. Several developments have occurred since the last earnings call about six weeks ago, and we will discuss them today. We continue executing, including expanding our product features realizing our 37 straight quarter of record revenue and achieving the Rule of 40 for the first quarter of 2025 with 20% year-over-year revenue growth and 20% adjusted EBITDA margins.

謝謝接線員，歡迎大家今天加入我們。自從大約六週前召開的上次財報電話會議以來，已經發生了一些進展，我們今天將對此進行討論。我們將繼續執行，包括擴展我們的產品功能，實現連續 37 個季度創紀錄的收入，並在 2025 年第一季度實現 40 規則，收入同比增長 20%，調整後 EBITDA 利潤率達到 20%。

Our financial discipline and business momentum has positioned us well in an uncertain and challenging economic environment. The macro has not been easy for some time. SaaS has been in a challenging market environment since 2022. However, we have significantly increased revenues and cash flow during this time. We expect our revenue and operating leverage to improve even more in the second half of the year.

我們的財務紀律和業務動能使我們在充滿不確定性和挑戰的經濟環境中佔據了有利地位。宏觀已經有一段時間不容易了。自2022年以來，SaaS一直處於充滿挑戰的市場環境。然而，在此期間我們的收入和現金流大幅增加。我們預計下半年我們的收入和營運槓桿將進一步提高。

On the direct enterprise side, the investment in our product and our go-to-market strategy is generating strong results. Our pipeline is building in both the US and Europe. We are seeing record leads and strong deal progression at all stages, giving us confidence in a notable increase in ARR in the second quarter and the remainder of the year.

在直接企業方面，我們對產品和行銷策略的投資正在產生強勁的成果。我們的管道正在美國和歐洲建設。我們在各個階段都看到了創紀錄的領先優勢和強勁的交易進展，這使我們對第二季和今年剩餘時間的 ARR 顯著成長充滿信心。

We are quickly approaching the deadline for the European Accessibility Act at the end of June. We continue building the sales engine and expanding the European sales team to capture this demand. The pipeline in the EU is strengthening and several deals have already been won in April.

我們很快就要到達六月底《歐洲無障礙法案》的最後期限了。我們將繼續打造銷售引擎並擴大歐洲銷售團隊以滿足此需求。歐盟的管道正在加強，四月已經達成了幾筆交易。

As discussed before, we expect strong contributions from our reseller business in the second half with expanded go-to-market with Finalsite and CivicPlus. As we've previously discussed, the digital accessibility market has been plagued with false and misleading marketing about what AI automation can do.

正如之前所討論的，我們預計下半年我們的經銷商業務將透過與 Finalsite 和 CivicPlus 合作擴大市場規模做出強勁貢獻。正如我們之前所討論的，數位無障礙市場一直受到有關人工智慧自動化功能的虛假和誤導性行銷的困擾。

At AudioEye, we analyze legal data when discussing our platform and results. The data shows that when combining automation and human-assisted technology, AudioEye provides 300% to 400% more protection against valid legal claims than our competitors. Building on our leadership position, we are launching additional features on our platform to increase the value delivered to our customers. The new features will help customers better understand our industry-leading protection rates and how to improve further. We expect these new features to be available to our customers in the next few weeks as we migrate to the upgraded platform.

在 AudioEye，我們在討論我們的平台和結果時會分析法律數據。數據顯示，當結合自動化和人工輔助技術時，AudioEye 提供的針對有效法律索賠的保護比我們的競爭對手高出 300% 到 400%。憑藉我們的領導地位，我們正在平台上推出更多功能，以增加向客戶交付的價值。新功能將幫助客戶更了解我們在業界領先的保護率以及如何進一步改進。我們預計，隨著我們遷移到升級平台，這些新功能將在未來幾週內提供給我們的客戶。

We are excited to provide both existing and new customers with these additional insights.

我們很高興為現有客戶和新客戶提供這些額外的見解。

Moving on to guidance. We expect quarterly revenues and ARR growth to accelerate in the second quarter of 2025. For the second quarter, we are guiding revenue between $9.85 million and $10 million. We also expect to generate adjusted EBITDA between $1.9 million and $2 million and adjusted EPS between $0.15 and $0.16. We are reiterating our 2025 full year revenue guidance of between $41 million and $42 million and reconfirming our adjusted EBITDA guidance of between $9 million and $10 million, with adjusted EPS between $0.70 and $0.80 per share.

繼續指導。我們預計 2025 年第二季季度營收和 ARR 成長將加速。對於第二季度，我們預計營收在 985 萬美元至 1000 萬美元之間。我們也預計調整後的 EBITDA 將在 190 萬美元至 200 萬美元之間，調整後的 EPS 將在 0.15 美元至 0.16 美元之間。我們重申 2025 年全年營收預期在 4,100 萬美元至 4,200 萬美元之間，並再次確認調整後 EBITDA 預期在 900 萬美元至 1,000 萬美元之間，調整後每股收益在 0.70 美元至 0.80 美元之間。

We expect our adjusted EBITDA margin to continue increasing into the upper 20s as we exit the year. This implies that free cash flow, defined as EBITDA minus CapEx will approach $3 million in the fourth quarter, a nearly $1 per share run rate growing over 40% year-over-year. We also expect operating leverage and free cash flow to continue growing in 2026.

我們預計，到今年年底，調整後的 EBITDA 利潤率將繼續上升至 20% 以上。這意味著第四季度的自由現金流（定義為 EBITDA 減去資本支出）將接近 300 萬美元，每股收益接近 1 美元，比去年同期成長超過 40%。我們也預期 2026 年經營槓桿和自由現金流將持續成長。

I'll now turn the call over to AudioEye's CFO, Kelly, for further financial insights.

現在我將把電話轉給 AudioEye 的財務長 Kelly，以獲得進一步的財務見解。

Thank you. As David mentioned, revenue again hit record levels with Q1 2025 revenue at $9.7 million, marking our 37 consecutive quarter of record revenue. At the end of the first quarter of 2025, annual recurring revenue, or ARR, was $37.1 million, a $500,000 increase from the end of the fourth quarter of 2024. As David mentioned, with the US and EU pipeline building, we expect ARR growth to increase significantly in the second quarter of 2025.

謝謝。正如大衛所提到的，營收再次創下歷史新高，2025 年第一季的營收達到 970 萬美元，這是我們連續第 37 季創下營收紀錄。截至 2025 年第一季末，年度經常性收入（ARR）為 3,710 萬美元，比 2024 年第四季末增加 50 萬美元。正如 David 所提到的，隨著美國和歐盟管道的建設，我們預計 2025 年第二季 ARR 成長將大幅增加。

Retention remained strong in the quarter with current AudioEye customers. The gross retention of acquired customers before moving to AudioEye products is typically lower than AudioEye's core gross retention. Our overall gross retention was impacted by higher churn and lower tier customers acquired through ADA site compliance and a few remaining Bureau of Internet Accessibility customers migrating to our platform.

本季度，AudioEye 現有客戶的保留率依然很高。在轉向 AudioEye 產品之前獲得的客戶的總保留率通常低於 AudioEye 的核心總保留率。我們的整體總留存率受到透過 ADA 網站合規性獲得的較高流失率和較低層級客戶以及遷移到我們平台的少數剩餘網路無障礙局客戶的影響。

Our primary goal when acquiring companies is to improve their NRR through conversion to our more comprehensive product offering, thereby generating synergistic cash flow. These goals remain on track and will contribute to adjusted EBITDA increases going forward as reflected in our adjusted EBITDA guidance in the second half.

我們收購公司的主要目標是透過轉換為我們更全面的產品來提高他們的 NRR，從而產生協同現金流。這些目標仍在按計劃進行，並將促進未來調整後的 EBITDA 成長，這反映在我們下半年調整後的 EBITDA 指引中。

Moving to channel performance. Both our revenue channels continued to deliver strong results. As a reminder, the partner and marketplace channel includes all revenue from our SMB-focused marketplace products and from various partners deploying the same products for their SMB customers. In the first quarter of 2025, this revenue channel grew 17% year-over-year and represents 57% of revenue and around 58% of ARR. We continue to see an expansion of existing and new partners engaging with AudioEye driving growth.

轉向通路績效。我們的兩個營收管道都持續取得強勁的業績。提醒一下，合作夥伴和市場管道包括我們以 SMB 為中心的市場產品的所有收入，以及為其 SMB 客戶部署相同產品的各個合作夥伴的收入。2025 年第一季度，該營收管道年增 17%，佔總營收的 57% 和 ARR 的 58% 左右。我們繼續看到與 AudioEye 合作的現有和新合作夥伴不斷擴大，推動成長。

AudioEye's enterprise channel consists of our larger customers and organizations, including those with non-platform websites who generally engage directly with AudioEye's sales personnel for pricing and solutions. The enterprise channel grew 26% year-over-year. In the first quarter, it contributed 43% of revenue and around 42% of ARR.

AudioEye 的企業管道由我們的大客戶和組織組成，其中包括那些擁有非平台網站的客戶和組織，他們通常直接與 AudioEye 的銷售人員聯繫以獲取價格和解決方案。企業通路較去年同期成長26%。第一季度，它貢獻了43%的營收和約42%的ARR。

On March 31, 2025, our customer count was approximately 119,000, an increase from 112,000 customers on March 31, 2024. Customer counts decreased sequentially, primarily due to a contract renegotiation with an existing partner, which allowed the partner to consolidate licenses previously billed individually. Altogether, customer growth in both the partner and marketplace channel as well as the enterprise channel remains strong.

截至 2025 年 3 月 31 日，我們的客戶數量約為 119,000 名，較 2024 年 3 月 31 日的 112,000 名客戶增加。客戶數量環比下降，主要原因是與現有合作夥伴重新談判合同，允許合作夥伴合併先前單獨計費的許可證。整體而言，合作夥伴和市場通路以及企業通路的客戶成長依然強勁。

Our gross profit for the first quarter was $7.7 million or about 80% of revenue compared to $6.3 million and 78% of revenue in Q1 of last year. As David mentioned, with customer migration to the upgraded platform, we expect margins in the second quarter of 2025 to decrease approximately 3 percentage points to 4 percentage points, but return to the high 70s in the second half of the year.

我們第一季的毛利為 770 萬美元，約佔營收的 80%，而去年第一季的毛利為 630 萬美元，佔營收的 78%。正如 David 所提到的，隨著客戶遷移到升級後的平台，我們預計 2025 年第二季的利潤率將下降約 3 個百分點至 4 個百分點，但下半年將回升至 70 多個百分點。

Operating expenses increased approximately 25% or $1.7 million to $8.7 million. The increase was primarily due to non-GAAP items, including additional litigation expenses and higher depreciation and amortization as well as additional investments in sales and marketing. Our total R&D spend in Q1 2025 was $1.6 million with approximately $500,000 reflected to software development costs in the investing section of the cash flow statement. We continue to gain efficiencies in R&D. R&D represented 17% of revenue for Q1 2025 versus 22% in the first quarter of 2024. The current investment in R&D is appropriate for 2025.

營運費用增加約 25% 或 170 萬美元至 870 萬美元。成長主要歸因於非公認會計準則項目，包括額外的訴訟費用、更高的折舊和攤提以及對銷售和行銷的額外投資。我們在 2025 年第一季的總研發支出為 160 萬美元，其中約 50 萬美元反映在現金流量表的投資部分的軟體開發成本。我們持續提高研發效率。2025 年第一季度，研發支出佔營收的 17%，而 2024 年第一季為 22%。目前的研發投資適合2025年。

Net loss in the first quarter of 2025 was $1.5 million or $0.12 per share compared to $800,000 or $0.07 per share in the same year ago period. Total net loss increased approximately $700,000 from the prior year's comparable period, primarily due to non-GAAP items just discussed, including additional litigation expense and higher depreciation and amortization and expenses related to the extinguishment of debt, which were partially offset by the $1.4 million increase in gross profit.

2025 年第一季淨虧損為 150 萬美元或每股 0.12 美元，去年同期淨虧損為 80 萬美元或每股 0.07 美元。總淨虧損較上年同期增加約 70 萬美元，主要原因是剛剛討論的非 GAAP 項目，包括額外的訴訟費用以及更高的折舊和攤銷以及與債務清償相關的費用，但毛利潤增加 140 萬美元，部分抵消了這些影響。

Our Q1 2025 adjusted EBITDA was $1.9 million or $0.15 per share, a $1 million improvement year-over-year. The primary adjustments to GAAP earnings and EPS for Q1 2025 were noncash share-based compensation, litigation, depreciation and amortization, debt extinguishment, interest expense and other nonrecurring items.

我們 2025 年第一季的調整後 EBITDA 為 190 萬美元，即每股 0.15 美元，年增 100 萬美元。2025 年第一季 GAAP 收益和每股收益的主要調整是非現金股權薪酬、訴訟、折舊和攤銷、債務清償、利息支出和其他非經常性項目。

On March 31, we refinanced our existing debt for a $20 million facility, which includes a $12 million term loan, a $3 million revolver and a $5 million delayed draw term loan. The initial $12 million term loan fully repaid AudioEye's existing term loans. The refinancing further strengthens the company's cash position and decreases our net interest expense with a reduction in interest rates from 14% previously to approximately 7.5% today.

3 月 31 日，我們為現有債務進行了 2000 萬美元的再融資，其中包括 1200 萬美元的定期貸款、300 萬美元的循環貸款和 500 萬美元的延期提款定期貸款。最初的 1200 萬美元定期貸款已完全償還 AudioEye 現有的定期貸款。再融資進一步增強了公司的現金狀況，並降低了我們的淨利息支出，利率從先前的 14% 降至現在的約 7.5%。

Our balance sheet is now in an even stronger position with $8.3 million in cash as of March 31, 2025. The $3 million revolver and the $5 million delayed draw term loan are also available. Adjusted free cash flow calculated as $1.9 million of adjusted EBITDA with $500,000 of software development costs was $1.4 million in the first quarter.

我們的資產負債表現在處於更強勁的狀況，截至 2025 年 3 月 31 日，現金為 830 萬美元。還提供 300 萬美元的循環貸款和 500 萬美元的延期提取定期貸款。調整後自由現金流以調整後 EBITDA 190 萬美元加上軟體開發成本 50 萬美元計算，第一季為 140 萬美元。

We expect to generate positive adjusted free cash flow throughout 2025, with adjusted free cash flow approaching $3 million in the fourth quarter or nearly $1 of run rate adjusted free cash flow per share which is over 40% year-over-year growth.

我們預計 2025 年全年將產生正調整後自由現金流，第四季度調整後自由現金流將接近 300 萬美元，或每股運行率調整後自由現金流接近 1 美元，同比增長超過 40%。

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

現在，我們開始提問。接線員，請給予指示。

(Operator Instructions) Joshua Reilly, Needham & Company.

（操作員指示）Joshua Reilly，Needham & Company。

All right. A nice job on the quarter here in a tough operating environment for everybody. So you mentioned in the press release that the pipeline is pretty strong in the US and Europe. Maybe we can just start with some more color on what you're seeing between the direct sales channel and the partner channel in terms of the pipeline?

好的。在對所有人來說都很艱難的經營環境下，本季我們取得了不錯的成績。您在新聞稿中提到，美國和歐洲的管道非常強大。或許我們可以先從更詳細的角度來介紹您在直銷管道和合作夥伴管道之間看到的管道差異？

And is there one particular area of your business where you're seeing more of a macro impact versus another?

在您的業務中，是否有某個特定領域比其他領域受到更大的宏觀影響？

Yes, we're seeing strong deal progression at all stages, as we go through the qualification steps of each deal. Deals are moving deeper in stages. It's what you want to see to give you confidence that they're going to close. And that's happening in the EU and in the US Direct momentum is picking up on the US

是的，隨著我們完成每筆交易的資格審查步驟，我們看到各個階段的交易都取得了強勁進展。交易正分階段深入推進。您希望看到它們讓您有信心它們將會關閉。這種情況正在歐盟和美國發生，直接影響正在美國顯現

as well.

也一樣。

Got it. You mentioned, obviously, we know now with the refinancing, you have some more financial flexibility. How are you thinking about the pace of sales hires and maybe M&A in the current macro? Do you wait for some of these deals to close before making incremental investments? Or how are you kind of thinking about the dynamics there?

知道了。您提到，顯然，我們現在知道，透過再融資，您可以擁有更多的財務彈性。您如何看待當前宏觀環境下銷售人員招募和併購的步伐？您是否會等待其中一些交易結束後再進行增量投資？或者您如何看待那裡的動態？

Yes. The addition of the new term loan does strengthen our balance sheet. I think from the sales and marketing front, we've been strategic in investing in sales and marketing. We've created some of the best leads to date. And as David alluded to, we're seeing really positive indications there.

是的。新定期貸款的增加確實增強了我們的資產負債表。我認為從銷售和行銷方面來看，我們一直在策略性地投資銷售和行銷。我們已經創造了一些迄今為止最好的線索。正如大衛所提到的，我們看到了非常積極的跡象。

And so I think there's an opportunity to keep investing in sales and marketing as long as we keep hitting that ROI. There are other avenues as well. We do think that there's a stock buyback out there that might be an attractive way to deploy capital. We explore, keep our eye open for acquisitions. But I think just balancing the investments with the right ROI that's how we're thinking about it.

因此我認為，只要我們繼續達到投資報酬率，就有機會繼續投資銷售和行銷。還有其他途徑。我們確實認為股票回購可能是一種有吸引力的資本配置方式。我們不斷探索，密切關注收購機會。但我認為，我們只是在投資和正確的投資報酬率之間取得平衡。

Got it. Last question for me on the new products. Can you just give us a hint of how they may or may not be using or implementing AI in some of the go-forward workflows that you're trying to automate?

知道了。關於新產品的最後一個問題。您能否向我們透露一下，在您嘗試實現自動化的一些未來工作流程中，他們可能會或可能不會使用或實施人工智慧？

Yes. We're building AI into everything we do from testing to remediating, which obviously could improve margins over time and costs in the future. Internal tests show that AI is pretty good at solving specific common accessibility issues, but not great at more contextual understanding, but it is getting incrementally better.

是的。我們正在將人工智慧融入我們所做的一切事情中，從測試到補救，這顯然可以隨著時間的推移提高利潤率並在未來降低成本。內部測試表明，人工智慧在解決特定的常見可訪問性問題方面相當出色，但在更多的上下文理解方面表現不佳，但它正在逐步變得更好。

George Sutton, Craig-Hallum.

喬治·薩頓、克雷格·哈勒姆。

David, I wondered if you can give a little bit more detail in terms of what you're seeing in Europe, and you did mention adding to the sales force there. I'm curious if you're also working with any new partners as the time frames are getting pretty short now for the rule to go into effect?

大衛，我想知道您是否可以更詳細地介紹您在歐洲看到的情況，您確實提到了增加那裡的銷售隊伍。我很好奇，由於距離該規則生效的時間越來越短，您是否也在與任何新合作夥伴合作？

Yes, obviously, a huge opportunity. It's not often that you're going to get a mandate for digital accessibility on an entire continent. We've already started winning deals with the team we have there because of that. We're going to add some more folks and maybe more folks after that even. So far, the deal sizes are a little bigger than the US, and we are working with a few partners already.

是的，顯然，這是一個巨大的機會。在整個大陸範圍內獲得數位化無障礙授權的情況並不常見。因此，我們已經開始與那裡的團隊達成交易。我們將增加一些人員，甚至可能之後還會增加更多人員。到目前為止，交易規模比美國略大，我們已經與一些合作夥伴合作。

So there was a Minnesota ruling that basically said websites fell into the Title III of the ADA. I'm just curious if that had any influence or will have any influence on the speed of people to want to go to work with you in the US.

因此，明尼蘇達州的一項裁決基本上認為網站屬於《美國殘疾人法案》第三章的範疇。我只是好奇這是否會對人們想去美國和你一起工作的速度產生任何影響。

There's a lot of different rulings held over the place. So I wouldn't read too much into any 1 of those. The demand is about the same as it's been historically.

這個地方有很多不同的裁決。所以我不會對其中任何一個進行過多的解讀。需求與歷史大致相同。

Got you. And then just so we're clear, I mean, obviously, we talk a lot about the Finalsite and CivicPlus, but are there any other kind of key new partners that you would point out -- or because you had referenced some additional new partners?

明白了。然後，為了讓我們清楚，我的意思是，顯然，我們談論了很多關於 Finalsite 和 CivicPlus 的事情，但是您是否會指出其他類型的關鍵新合作夥伴——或者因為您提到了一些其他新合作夥伴？

Not in the US and the EU. We're working with some new partners now?

美國和歐盟則不然。我們現在正在與一些新的合作夥伴合作嗎？

Richard Baldry, ROTH Capital Partners LLC.

羅仕資本合夥有限責任公司 (ROTH Capital Partners LLC) 的理查德·鮑德里 (Richard Baldry)。

So year-over-year, you over doubled adjusted EBITDA, but you still grew sales and marketing over 20%. Can you dig in a little bit to where those incremental spend dollars and sales and marketing are going? How much of that is sort of more recent hires that aren't yet sort of on their productivity ramp and how much capacity that kind of adds to your quota capabilities?

因此，與去年同期相比，您的調整後 EBITDA 增加了一倍多，但銷售額和行銷金額仍增加了 20% 以上。您能否深入了解這些增量支出以及銷售和行銷的去向？其中有多少是最近才僱用的、尚未達到生產力提升水平的員工，以及這些員工能為您的配額能力增加多少產能？

Yes. We've kind of invested in sales and marketing across the board. So additional -- paid additional headcounts and we are adding head count, both in the US and EU, and we're continuing to see that kind of expand and ramp. I'd say, both in the US and then the expansion into the EU is driving that sales and marketing number up year-over-year.

是的。我們對銷售和行銷進行了全方位的投資。因此，我們額外支付了員工薪資，並且正在增加員工人數，無論是在美國還是歐盟，我們都將繼續看到這種擴張和成長。我想說，無論是在美國還是在歐盟，銷售和行銷數字都在逐年增長。

You touched on ramping up off of quota now. So they're at all stages there, but there's a lot of new folks in the door right now. So you don't see those numbers yet in the direct sales.

您現在談到了增加配額的問題。所以他們處於各個階段，但現在有很多新人加入。所以你在直銷中還看不到這些數字。

Got it. You talked a little bit about the misperceptions of what AI can do today. Do you feel like how -- or how do you feel like that's impacting sort of prospect evaluations? Do you think there's -- that the worst of that headwind is kind of easing? Are people coming to understand that it's not sort of a magic bullet? Or do you think that you're still sort of piercing through those clouds right now?

知道了。您稍微談了一下人們對當今人工智慧所能做的事情的誤解。您是否覺得—或者您覺得這會對前景評估產生什麼影響？您是否認為最糟糕的逆風已經有所緩解？人們是否開始認識到它並不是靈丹妙藥？或者您認為現在仍然能夠穿透那些雲層嗎？

I don't know it's evolving. It's a good question. We focus on free cash flow and things we can control, and we're looking at run rate $1 -- near $1 of free cash flow by the fourth quarter, and we think that's going up into next year with the operating leverage we have. So I don't know too much on the AI side, it's getting a little better, but it's not the Holy Grail.

我不知道它正在進化。這是個好問題。我們專注於自由現金流和我們可以控制的事情，我們預計第四季度的自由現金流運行率將達到 1 美元——接近 1 美元，我們認為，憑藉我們擁有的經營槓桿，這一數字將在明年上升。所以我對人工智慧方面了解不多，它正在變得更好，但它不是聖杯。

Got it. And last for me, when you look in the European prospects and if there's any way to know this, but there seems to be some perception that there's antagonism between US and Europeans at a very macro level. Do you think you're seeing any sort of reticence to deal with American-based companies yourself? Or is it just too anecdotal right now?

知道了。最後，當你審視歐洲的前景時，如果有任何方法可以了解這一點，那麼似乎有人認為在宏觀層面上美國和歐洲之間存在對抗。您是否認為自己看到了與美國公司打交道的任何形式的猶豫？還是現在它只是太過軼事？

I haven't seen anything so far.

我到現在還沒看到任何東西。

Zach Cummins, B. Riley Securities.

康明斯 (Zach Cummins)，B. Riley 證券。

David, I was just curious if you could walk us through some of the key assumptions that give you the confidence in the acceleration in ARR kind of in Q2 and into the second half of the year versus maybe some of the incremental macro headwinds. It sounds like positive momentum in both channels, but just curious if you could unpack that a little bit.

大衛，我只是好奇，您是否可以向我們介紹一些關鍵假設，這些假設讓您對第二季和下半年 ARR 的加速成長充滿信心，而不是面臨一些漸進的宏觀逆風。聽起來這兩個管道都呈現出積極的勢頭，但我好奇您是否可以稍微解釋一下。

Yes. We had a really strong quarter on the direct enterprise side and expect that to get even better in the second quarter into the second half. Same with EU heating up. We had a decent quarter on the reseller side and expect that to pick up in the second half with Finalsite and CivicPlus. So it's going pretty well, and that gives us the confidence.

是的。我們在直接企業方面本季表現非常強勁，預計第二季和下半年的表現會更好。歐盟升溫也是如此。我們在經銷商方面本季的業績還不錯，預計下半年隨著 Finalsite 和 CivicPlus 的推出，業績會有所回升。所以一切進展順利，這給了我們信心。

Got it. That's helpful. And then one question towards Kelly. Can you talk about the near-term margin impact? I think you talked about a little bit in your script that we should see in with the customer migration over to the new platform and kind of how should we think about that reverting back to more normalized levels in the coming quarters?

知道了。這很有幫助。然後向凱利提問一個問題。能談談近期利潤率的影響嗎？我認為您在腳本中談到了一點，我們應該看到客戶遷移到新平台，以及我們應該如何考慮在未來幾季恢復到更正常的水平？

Yes. With the migration to upgraded platform, there is a push in Q2 for additional audits to show new features as quickly as possible, which is driving up the cost of revenue in the second quarter, but we do expect it to return to the high 70s in the second half of the year. So kind of a onetime impact to the second quarter of 2025 on the gross margin front.

是的。隨著向升級平台的遷移，第二季度需要進行額外的審計以盡快展示新功能，這推高了第二季度的收入成本，但我們確實預計它將在下半年回到 70 年代的高點。因此，這對 2025 年第二季的毛利率來說是一種一次性影響。

Understood. And final question for me. David, can you talk about just the early traction maybe you're seeing in the public sector, I mean, with the DOJ rule on Title II. I know the first major deadline is not until kind of early part of next year, but just curious of how some of those customers are approaching that here in kind of the coming quarters into 2025?

明白了。這是我的最後一個問題。大衛，您能否談談您在公共部門看到的早期進展，我的意思是，司法部關於第二章的規定。我知道第一個主要截止日期要到明年年初，但我只是好奇一些客戶在 2025 年接下來的幾個季度裡是如何實現這一目標的？

Yes. We're really focused on Finalsite and CivicPlus. They both implemented aggressive go-to-market plans and their pipelines are building really nicely. So we're working with them closely, looking for a great second half with them. We are seeing some other leads come in on state and local as well.

是的。我們真正關注的是 Finalsite 和 CivicPlus。他們都實施了積極的市場進入計劃，並且他們的通路建設進展順利。因此，我們正在與他們密切合作，期待與他們一起度過美好的下半場。我們也看到一些來自州和地方的其他線索。

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

至此，我們的問答環節就結束了。現在我想把電話轉回給莫拉迪先生，請他作最後發言。

Thank you. 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.

謝謝。一如既往，我要感謝我們的員工、合作夥伴和投資者的持續支持。我們期待在下次通話中向您通報最新情況。

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透過公司網站投資者部分的連結重播。

Thank you for joining us today for AudioEye's first quarter 2025 earnings conference call. You may now disconnect.

感謝您今天參加 AudioEye 2025 年第一季財報電話會議。您現在可以斷開連線。