leading provider of saas-based digital accessibility solutions€¦ · including finra’s and...
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Q3 2019Nasdaq: AEYE
Leading Provider of SaaS-based Digital Accessibility Solutions
2Nasdaq: AEYE
This (“Presentation”) is being furnished to you for information purposes only. The circulation of this Presentation or the disclosure of its contents to any other party is expressly prohibited. No copies should be made without the prior written consent of AudioEye®, Inc. (the “Company”), and no excerpts or summaries thereof may be distributed, reproduced or included in any documents without such consent. This Presentation does not constitute an offer to you, any other person or to the general public to subscribe for or otherwise acquire any of the Company’s securities. While the Company is not aware of any inaccuracy in the information set forth in this Presentation, it does not warrant the accuracy of such information. The information in this Presentation is subject to updating, revision and further amendment. The information contained herein does not purport to be complete. In all cases, interested parties should conduct their own investigations and analyses of the Company and the data set forth in this Presentation. The Company has not made any representation or warranty as to the accuracy or completeness of this Presentation and shall have no liability for any representations (expressed or implied) contained in, or for any omissions from, this Presentation or any other written or oral communications transmitted to the recipient in the course of its evaluation of the Company. By accepting this Presentation, the recipient acknowledges and agrees that: (1) this Presentation is made available to the recipient for information purposes only; (2) none of such information will be used by the recipient or any of its employees or representatives in any manner whatsoever, in whole or in part, other than in connection with its evaluation of the Company; (3) the recipient will not reproduce this Presentation, in whole or in part, and will not distribute all or any portion of this Presentation to any person other than a limited number of the recipient’s employees or representatives who have a clear need to know such information for the purpose set forth above; and who are informed by the recipient of the highly confidential nature of such information; and (4) if the recipient does not wish to pursue this matter, it will immediately destroy this Presentation together with any other material relating to the Company which the recipient may have received; and (5) any proposed actions by the recipient which are inconsistent in any manner with the foregoing agreement will require the prior written consent of the Company.
The matters discussed in this Presentation include forward-looking statements that involve numerous assumptions, risks and uncertainties. These include, but are not limited to, the risk that the Company’s revenue or cash contract bookings will not increase as currently expected or at all, the risk that the Company’s cash position will not improve or will worsen, the risk that the Company’s current capitalization plan will not provide the Company with sufficient cash to address its current or future needs or will otherwise not be successful, the risk that the Company’s products will not perform as expected, the risk that the Company’s products will not generate significant, or any, revenue or cash contract bookings for the Company, the effectiveness of the reverse stock split, including FINRA’s and NASDAQ’s approval thereof, the Company’s plans to list its common stock on NASDAQ and the impact the reverse stock split or any such listing may have on the Company’s business, prospects and/or stock price. Actual results may differ materially from those expressed in these forward-looking statements due to such risks and uncertainties, including those factors detailed under the caption “Risk Factors” and elsewhere in the documents we file from time to time in our filings with the Securities and Exchange Commission, including our reports on Form 10-K and Form 10-Q. The Company assumes no obligation to update or revise any forward-looking statements. The information, opinions, estimates and forecasts discussed today are as of the date thereof and are subject to change without prior notification. All inquiries regarding the Company should be made through the Company. For further information, please call: 866.331.5324.
Disclaimer
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• Learning disabilities • Memory impairments• Attention disorders• Problem solving and logic
Cognitive• Difficulty in using hands• Limited fine motor control• Muscle slowness• Tremors and spasms
Motor
• Deafness• Hearing impairment
Auditory• Blindness• Low vision • Color blindness
Visual
Global population with some form of disability15%
Why Accessibility Matters
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U.S. PWD disposable income incl. friends/family
4TWorking-age adults who benefit from accessibility
22%
People with disabilities use accessibility tools
2/3People with disabilities use computers
75%
Children have autism spectrum disorder
1 in 68Estimated U.S. population with dyslexia
5-10%
Prevalence of disabilities in adults 65+
51%
Americans with disabilities
41M+
People with disabilities (PWD) worldwide
1B+
Accessibility by the Numbers
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• Digital accessibility provides the virtual “ramps and rails” to the digital world
• Without it, a large portion of the population is unable to fully access online content
• Individuals with disabilities commonly rely on assistive technologies (AT) such as screen readers to access websites and digital content. If not coded properly, AT users are left behind
• Most online properties require extensive software code enhancements to become widely accessible by people with disabilities
• Traditionally, this process also requires significant time, resources and upkeep
What is Digital Accessibility?
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Our managed service offering reduces the risk of legal demand letters and lawsuits from plaintiffs claiming ADA-related violations
Flagship product: Ally Managed Service provides cloud-based SaaS solution where AudioEye handles the accessibility testing, remediation, and monitoring process for the customer
AudioEye works with website owners, publishers, developers, and operators to improve the accessibility and usability of their digital environments and assets
Our solutions enable organizations to create experiences that are more accessible, and more usable, for more people
AudioEye is a purpose-driven enterprise that identifies and resolves issues of digital accessibility and enhances the user experience
What We Do
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Source: https://www.adatitleiii.com/2019/01/number-of-federal-website-accessibility-lawsuits-nearly-triple-exceeding-2250-in-2018/” * Federal ADA Title III lawsuits tracked by AudioEye
Notable Digital Accessibility Legal Precedents
0
500
1000
1500
2000
2500
2015 2016 2017 2018
2258
814
26257
2300+
2019
1100+ through
6/30/2019
Projected number for 2019
Digital Accessibility Lawsuits Surging in the US
Pressure to Comply is Driving Increased Awareness
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Why we win
Speed-to-Compliance Always onDynamic RemediationHolistic ApproachDisruptive PricingTrusted TechnologySubject Matter Expertise
Who we compete with
Legacy incumbents (consultants) Slow, arduous, and risky (trained resources may leave and take knowledge base with them)
Automated Testing Tools Only capable of identifying up-to 35% of potential issues, doesn’t do anything to fix issues
Assistive Toolbar PluginsGimmicky, derivative, and, on their own, do little to reduce risk of lawsuits
Our Competitive Advantage
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The Old Way
ExpensiveTime Consuming
Difficult Risky with Little ROI
Vague & Unattainable
The AudioEye Way
Saves MoneyCompliance on Day One
Hand Us the KeysPractical & Sustainable
Trusted & Proven
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Speed to ComplianceDepth of ADA Conformance
• Tenon• SiteImprove• Monsido
Automated Testing Tools
• TextHelp• Make-Sense• Equal Web
Plugins• Level Access• Deque• TPG• Funka
Consulting
Help Desk
Assistive Web Personalization Tools
Dynamic Remediation
Always-On Monitoring
Trusted Certification
AudioEye is Uniquely Positioned in the Industry
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The Ally Toolbar provides a customizable user experience to all site users
Usability
4
AudioEye Trusted Certification provides 3rd party validation for clients needing to maintain demonstrable evidence of compliance
Certification
3
Aligned with Section 508 requirements and WCAG 2.1 Level AA success criteria
Conformance
2
Immediately addresses issues of legal demand letters, lawsuits, and ADA-related requirements
Compliance
1
Our technology enables businesses and government agencies to achieve and sustain digital accessibility
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Thoroughly vetted, technology-first approach trusted by leading global brands and government agencies
Comprehensive, always-on solution
Subject matter experts and specialized engineers do the work for you
Smarter, no-nonsense strategy
Once integrated, AudioEye Dynamic Remediation Technology takes over
The path to compliance takes just minutes
The only accessibility solution removing billions of access barriers every single day
Enterprise-Grade Remediation Technology
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6 Patents Issued & 2 Pending
3,100+ active customers
International Association of Accessibility Professionals
35+ (IAAP) Certifications
1Million+ URLs remediated and monitored
80Team Members
1B+ remediations published dailyAudioEye
by the Numbers
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Direct Channel: Hundreds of brands trust AudioEye
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AND MORE...
AUTOMOTIVE
EDUCATION
MARKETING
MUNICIPALITIES
FINANCE
Each strategic partner relationship establishes AudioEye as the exclusive web accessibility solution for the hundreds or thousands of customers supported by each partner.
Indirect Channel:
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• Partners responsible for reselling AudioEye solution in exchange for partial revenue share
• Partnering strategy provides single point of access to large customer bases, reducing closing time and sales costs
• Multi-tenant, CMS platforms offer economies of scale to make delivering the AudioEye solution practical and affordable
• Focus on large, high-volume markets with compelling demand drivers
Indirect Channel
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1) FY2019 estimate as announced on August 14, 2019. 2) Cash flow reflects “net cash used in operating activities” adjusted for non-cash charges as reported in the company’s SEC filings.
--
--
--
$10-11
--
$22-24
FY 2019 Guidance(1)
$(1.6)
$7.6
54%
$5.7
$3.0
$11.6
FY 2018
$(1.6)
$5.9
49%
$2.7
$1.2
$6.3
FY 2017
$(2.3)
$4.2
(23%)
$1.0
$.04
$1.9
FY 2016
$(5.5)
$6.4
(261%)
$0.3
$.01
$0.3
FY 2015
Cash Flow
GAAP OpEx
Gross Profit Margin %
Revenue
Def. Revenue
Bookings
(in USD millions)
• Rapidly ramping, predictable recurring revenue stream, new cash contract bookings• Increasing gross margins, controlled opex, reducing cash burn quarter over quarter
Summary Financial Performance and Guidance
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0.7 0.8 0.7 1.12.3 3.1 3.9 4.5
5.57.1
9.010.6
1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19
12.1
2Q19
16.9
3.22.93.02.51.71.41.21.10.90.50.40.40.40.2
Deferred Revenue
Contracts In Excess Of Deferred Revenue
1.8 2.2 2.8 3.3 4.15.4
6.57.6
9.2
13.7
14 Consecutive Quarters of Revenue Increases
0.0
0.5
1.0
1.5
2.0
2.5
0.1 0.2 0.20.4 0.4
0.7 0.70.9
1.1 1.21.5
1.8
1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18
2.0
1Q19 2Q19
2.4
Revenue
0.6 0.4 0.2 0.6
1.7 1.5 1.5 1.62.2
3.0 2.83.5
012345678
1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19
3.4
2Q19
7.3
Bookings
Contracts in Excess of Recognized Revenue
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Indicative Contract Examples
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Indirect Channel partner example
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Direct Channel Contractexample
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Portfolio of Contracts Direct (1) and
Indirect (3)
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Reliable Solution
Affordable Pricing
Growing RetainableCustomer Base
Economies of Scale
Trusted Industry Leader
High Quality, Affordable
Price
Massive TAM
Service with Integrity
Real-World Solution
Our philosophy is centered on rapid and consistent customer acquisition and retention, at scale
Approach
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Continue to prove scalable go-to-market strategy Consistent revenue growth year over year
Household name brands trust AudioEye High profile ADA lawsuits leave brands in great need of timely solutions
Indirect Partner Channel presents land grab opportunity Making accessibility immediately available to entire industries
Dispruptive approach makes more sense Disruptive approach is the only way to address and fix large scale issues
Expanding capabilities & opportunitiesWe address website functionality AND content, including document accessibility
Key Takeaways
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A Highly Scalable Business Model
Strong Growth & Subscription Metrics
The Industry’s Only End-to-End SaaS Offering
Large Total Addressable Market with Demonstrated
Need/Demand
AudioEye Investment Highlights
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APPENDIX
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Dr. Carr BettisExecutive Chairman
Sach BarotChief Financial Officer
Leadership Team
• A proven corporate finance executive and business leader, bringing 20 years of experience, most recently having served as CFO, Global Operations for Dun & Bradstreet Corporation (D&B), supporting approximately $1.7 Billion in annual revenues
• An extensive background in the commercial data and information services sector and a record of delivering strong results through hands-on financial, strategic and operational leadership with expertise in analytics-driven P&L management, corporate strategy, business process reengineering and cultural transformations
• Education: MBA, State University of NY at Buffalo; Master’s Degree in International Business, School of Economics at Devi Ahilya University in Indore, India
• Founder and chief architect of numerous market-leading financial tech innovations and subscription model businesses that were acquired by Merrill Lynch, Thomson Financial (now Thomson Reuters), Primark/Disclosure (now Thomson Reuters), Institutional Shareholder Services (ISS), Advanced Equities/GreenBook Financial (now First Allied Capital Management) and Sabrient Systems
• Education: Ph.D., Indiana University
Todd BankofierChief Executive Officer
• His fair-minded, steady and competent leadership has benefited numerous entities over the last 23 years, including serving as the President and CEO of the Arizona Technology Council from 2002 - 2006
• Served for four years as Vice President of National Sales for XO Communications, a national telecom company where he managed a national sales team to four years of record sales growth