Audioeye (NASDAQ:AEYE) reported first-quarter 2026 revenue growth and raised its profitability outlook, while outlining a leadership transition that will move Kelly Georgevich into the chief executive role and keep David Moradi focused on product strategy and artificial intelligence initiatives.
The digital accessibility software company said first-quarter revenue rose 8% year over year to $10.6 million, marking what management described as its 41st consecutive quarter of record revenue. Annual recurring revenue, or ARR, reached $41.2 million as of March 31, up from $40 million at the end of 2025 and up 11% from a year earlier.
Leadership Transition Puts Georgevich in CEO Role
Moradi, AudioEye’s executive chairman and chief product officer, said the transition was planned and reflects the board’s confidence in Georgevich’s ability to lead the company through its next phase of growth.
“Kelly has been instrumental in helping us achieve these top-tier results since joining AudioEye in 2021,” Moradi said. “I’ve worked closely with Kelly for almost five years, and I’m highly confident that as CEO, she will lead the company through our next phase of growth and continued operating margin improvement.”
Moradi said he will continue to focus on long-term strategy and product innovation, including AI initiatives made possible by recent improvements in large language models. He said AudioEye’s next-generation platform combines custom fixes with AI to give customers a more complete view of their accessibility risk profile.
Georgevich thanked Moradi for his role in transforming the company and said she plans to build on the company’s current foundation from both an operational and product standpoint.
Accessibility Demand Supported by Litigation and Regulatory Trends
Management said the broader market environment continues to underscore the need for digital accessibility solutions that can operate with accuracy and scale. Georgevich cited the 2026 WebAIM Million report, which found that 95.9% of the top 1 million home pages had detectable WCAG failures, averaging 56.1 errors per page. She said that represented a 10% increase from the prior year and reversed six consecutive years of gradual improvement.
Georgevich said WebAIM attributed the decline to broader shifts in web development, including greater reliance on third-party frameworks and AI-assisted coding. Moradi added during the question-and-answer session that AI coding tools are often drawing from inaccessible content because the internet was not originally coded with accessibility in mind.
“You’re seeing the number of sites explode, the number of content explode, and that’s why we’re seeing all-time highs in litigation,” Moradi said.
On the regulatory front, Georgevich said the U.S. Department of Justice published an interim final rule in April 2026 extending Title II web accessibility compliance deadlines by one year for state and local governments, with enforcement now expected to begin in April 2027. She said AudioEye views the delay as an affirmation of the federal commitment to digital accessibility and a broader runway for the company and its channel partners to engage state and local governments.
In response to analyst questions, Georgevich said the delay has not reduced urgency among state and local government partners. She said partners are continuing with the same go-to-market activity and customer messaging.
First-Quarter Results Show Higher Revenue and Adjusted EBITDA
AudioEye reported first-quarter gross profit of $8.3 million, or about 78% of revenue, compared with $7.7 million, or 80% of revenue, in the year-earlier period. Adjusted gross margin was 84%, compared with 85% in the prior-year quarter.
Operating expenses increased to $10.1 million from $8.7 million a year earlier. Net loss widened to $2.1 million, or $0.17 per share, compared with a net loss of $1.5 million, or $0.12 per share, in the first quarter of 2025. Georgevich said the increase reflected higher litigation expenses, depreciation and amortization, and added investments in sales and marketing.
The company reported adjusted EBITDA of approximately $2.4 million, or $0.18 per share, representing an adjusted EBITDA margin of 22%. That compared with adjusted EBITDA of $1.9 million, or $0.15 per share, and a 20% margin in the prior-year quarter.
AudioEye generated $1.9 million of free cash flow in the quarter. The company ended the period with $8.6 million in cash and $3 million available under a revolving line of credit. Georgevich said net debt was $8.4 million as of March 31, with net debt to adjusted EBITDA of about 0.7 times based on 2026 adjusted EBITDA guidance.
Channel Performance and Customer Count
AudioEye said it had approximately 127,000 customers as of March 31, up 8,000 from a year earlier. The total was down 4,000 from Dec. 31, 2025, which Georgevich attributed to one partner’s realignment of its own customer base. She said the partner continues to support thousands of AudioEye customers and that the change had no material impact on revenue or ARR.
- Enterprise channel: Revenue grew 9% year over year in the first quarter. The channel represented about 41% of ARR as of March 31.
- Partner and marketplace channel: Revenue grew 8% year over year and represented about 59% of ARR. Georgevich said the channel contributed meaningfully to ARR growth, including expansion from state and local government partners.
Georgevich also said AudioEye continues to build pipeline in the European Union while remaining disciplined with investments. In response to an analyst question, she said the EU is moving “a bit slower” and is “a bit bureaucratic,” but the company is seeing positive signals and building its team ahead of enforcement.
Guidance Calls for Higher Profitability
For the second quarter of 2026, AudioEye guided for revenue of $10.65 million to $10.75 million, adjusted EBITDA of $2.6 million to $2.7 million, and adjusted EPS of $0.21 to $0.22. At the midpoint, the adjusted EBITDA margin would be about 25%.
For full-year 2026, the company refined its revenue guidance to $43.25 million to $44.25 million. It now expects adjusted EBITDA of at least $12 million, representing a nearly 27% adjusted EBITDA margin at the midpoint of revenue guidance, and adjusted EPS of at least $0.96.
Georgevich said that outlook would represent at least 33% growth in adjusted EBITDA and adjusted EPS from 2025. The company also continues to target a $15 million run-rate adjusted EBITDA level by the end of 2026.
During the question-and-answer session, Moradi said AudioEye is using agents and proprietary data to make products faster and more useful for clients, with the goal of improving accuracy, detection, legal protection and margins over time. Asked whether AI could reduce the amount of professional services required, Moradi said, “That’s the goal.”
About Audioeye (NASDAQ:AEYE)
AudioEye, Inc is a provider of digital accessibility solutions, offering software and services designed to help organizations ensure their online properties comply with Web Content Accessibility Guidelines (WCAG), the Americans with Disabilities Act (ADA) and other global accessibility standards. Through its cloud-based platform, the company automates the detection and remediation of accessibility barriers in websites, mobile applications and multimedia content.
The company’s flagship AEYE Platform leverages machine learning, artificial intelligence and human validation to continuously scan digital assets, identify potential compliance issues and deploy corrective overlays or code adjustments.
