AudioEye Reports 9% Revenue Growth in Q2 2026, Faces Increased Net Loss

AudioEye, Inc. reported its financial results for the second quarter of 2026, revealing a revenue increase of 9% year-over-year, reaching $10.7 million compared to $9.9 million in the same period of 2025. For the first half of 2026, total revenue also grew by 9%, amounting to $21.3 million, up from $19.6 million in the prior year. The company’s gross profit for the second quarter was $8.4 million, an 11% increase from $7.6 million in the previous year. However, AudioEye recorded a net loss of $865,000 for the quarter, a significant increase from a net loss of $2,000 in Q2 2025, reflecting ongoing operational challenges.

The company’s operating expenses rose by 23% in the second quarter, totaling $9.0 million, compared to $7.4 million in the same period last year. This increase was primarily driven by higher general and administrative expenses, which surged by 22% to $4.5 million, attributed to increased litigation costs and severance expenses. Research and development costs decreased by 29% to $849,000, reflecting efficiency gains from the implementation of AI tools and a reduction in headcount. The overall operating loss for the quarter was $598,000, compared to an operating income of $242,000 in Q2 2025.

AudioEye's customer base grew to approximately 129,000 as of June 30, 2026, marking a 7% increase from 120,000 customers a year earlier. The company’s Annual Recurring Revenue (ARR) reached approximately $42.3 million, an 11% increase year-over-year. The Partner and Marketplace channel, which accounted for about 59% of ARR, saw a 16% revenue increase, while the Enterprise channel remained stable, reflecting challenges in customer retention and non-recurring revenue.

In terms of liquidity, AudioEye reported $8.7 million in cash and cash equivalents as of June 30, 2026, with working capital of $974,000, a significant improvement from a working capital deficit of $1.8 million at the end of 2025. The company drew $3.6 million from its term loan during the first half of 2026, contributing to the increase in cash reserves. Looking ahead, AudioEye remains focused on expanding its product offerings and customer base while navigating the challenges of operational costs and market competition. The company is committed to maintaining compliance with its financial covenants and believes it has sufficient liquidity to support its operations in the near term.