AudioEye CEO amends contract, takes $1 salary

In a recent development at AudioEye Inc. (NASDAQ:AEYE), a prepackaged software services company with a market capitalization of $147 million and impressive gross profit margins of 79%, Chief Executive Officer David Moradi has agreed to a significant change in his compensation structure. According to InvestingPro analysis, while the company isn’t currently profitable, analysts expect positive earnings this year. According to a filing with the Securities and Exchange Commission on Wednesday, Moradi’s annual base salary will be reduced to $1 starting from the second quarter of 2025.

The adjustment comes as part of a Second Amendment to Moradi’s employment agreement, which also extends the term of his contract from August 20, 2025, to January 9, 2027. This amendment was made effective on March 31, 2025. In lieu of a higher salary, Moradi was granted 241,444 restricted stock units (RSUs) under the company’s 2020 Equity Incentive Plan, vesting over two years, with a portion vesting on January 9, 2026, and the remainder on January 9, 2027. This comes as AudioEye’s stock has experienced a significant decline, down nearly 50% over the past six months, though analysts maintain price targets ranging from $22 to $35. These RSUs will fully vest if Moradi’s employment is terminated without cause, upon his death, or if there is a change in control of the company.

Furthermore, the performance period for certain tranches of performance shares awarded to Moradi in August 2020 has been extended to January 9, 2027. These include tranches contingent upon the company achieving specific revenue and stock price targets.

In related board news, the company’s Executive Chairman, Dr. Carr Bettis, will not be returning to the board after his term expires at the 2025 Annual Meeting of Stockholders, scheduled for May 23, 2025. Consequently, the board will reduce its size from five to four members. Upon Dr. Bettis’ departure, Moradi will assume the role of Chairman of the Board.

The changes in executive leadership and board composition are detailed in the SEC filing, which provides insight into the company’s governance and strategic direction. AudioEye’s stock is traded on The Nasdaq Capital Market under the ticker AEYE. Based on InvestingPro analysis, the company operates with moderate debt levels and shows strong revenue growth potential. For detailed insights into AudioEye’s financial health, valuation metrics, and 10+ additional ProTips, investors can access the comprehensive Pro Research Report available on InvestingPro.

In other recent news, AudioEye reported its fourth-quarter 2024 earnings, revealing an earnings per share (EPS) of $0.18, which surpassed the forecast of $0.16. Despite this, the company slightly missed its revenue target, reporting $9.7 million against an expected $9.72 million. The company also announced a new financing arrangement with Western Alliance (NYSE:WAL) Bank, which includes a $12 million term loan and a $3 million revolving credit facility, aimed at repaying existing debt and supporting future growth initiatives.

H.C. Wainwright adjusted its price target for AudioEye shares from $37 to $22 while maintaining a Buy rating, following the company’s recent earnings announcement. Meanwhile, Needham analysts maintained a $25 price target, citing strong fourth-quarter results and a 17.3% year-over-year increase in Annual Recurring Revenue (ARR). The company’s growth outlook for 2025 includes projected revenues of $41.0 million to $42.0 million and an adjusted EBITDA forecast of $9.0 million to $10.0 million.

Additionally, AudioEye’s Board of Directors approved a share repurchase program, authorizing the buyback of up to $12.5 million worth of common stock through 2027. The company is also expanding its European operations in anticipation of the European Accessibility Act, which will enforce digital accessibility standards across the European Union starting June 2025. These developments reflect AudioEye’s strategic efforts to strengthen its financial position and capitalize on emerging opportunities in digital accessibility.

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