AudioEye reported record results for the third quarter 2026, exceeding analyst expectations for both revenue and earnings. The company achieved GAAP net income of $1.0 million and significantly expanded its adjusted gross margins to 88%, driven by AI-powered operational efficiencies and a strategic shift toward high-margin recurring revenue.

Key Highlights

  • Top-Line Performance: Total revenue reached a record $11.0 million, representing 7% year-over-year growth, while Annual Recurring Revenue (ARR) grew 12% to $43.3 million.
  • Margin Expansion: Adjusted gross margin expanded by 500 basis points year-over-year to 88%, while GAAP gross profit rose to $9.1 million (83% of revenue).
  • Operational Efficiency: Total operating expenses decreased 5% to $7.8 million, primarily due to lower sales, marketing, and R&D costs resulting from AI-driven automation.
  • Liquidity and Capital Allocation: The company ended the quarter with $9.3 million in cash and authorized a new $15 million share repurchase program, representing approximately 15% of outstanding shares.