Hidden within the routine discussion of AudioEye's Q1 2024 earnings call lies a potential seismic shift that could catapult the company into a new era of explosive growth. While analysts have focused on the impressive profit margins and accelerating revenue, they seem to have overlooked a crucial detail: the looming tsunami of demand from the public sector.

The DOJ's final rule under Title II of the ADA, mandating website accessibility for state and local government entities, represents a colossal market opportunity. AudioEye estimates a staggering $17 billion in implementation costs over the next three years, dwarfing their current annual revenue. The sheer scale of this demand – a forced march towards accessibility for over 80,000 government websites – is staggering.

But here's the kicker: AudioEye already has exclusive partnerships with leading SaaS platforms serving these government entities. They are the sole provider of accessibility solutions within these platforms, and current penetration is in the single digits. Imagine the potential: a near monopoly position in a market with a $17 billion budget, hungry for their services.

This scenario isn't just wishful thinking. Let's crunch some numbers. AudioEye's current partners serve 80,000 government websites. Even at their modest average revenue per customer of roughly $300, full penetration would translate to an additional $24 million in annual recurring revenue. That's a 75% increase on their current ARR of $32 million – a remarkable jump driven by a single vertical.

But the story gets even more compelling. The DOJ estimates $2 billion in annual maintenance costs after the initial implementation phase. Assuming even a conservative 10% market share, AudioEye could lock in an additional $200 million in recurring revenue every year, just from maintenance services to the public sector.

These figures are deliberately conservative. They don't include the potential revenue from the European Accessibility Act, set to take effect in June 2025, which will unleash similar demand across the EU. They also exclude the impact of California's AB 1757, which would further solidify the accessibility requirement for businesses operating in the Golden State.

The convergence of these factors – a massive, mandated market opportunity, existing exclusive partnerships, and a proven, scalable technology platform – creates a perfect storm for AudioEye. The company is poised to become the go-to provider for digital accessibility solutions, not just for businesses, but for entire government ecosystems.

What makes this even more remarkable is that AudioEye is already achieving incredible financial performance. Their Q1 2024 earnings showcased a record adjusted EBITDA and positive free cash flow, with revenue growth accelerating throughout the year. They've cracked the code for profitable growth, demonstrating the efficiency and scalability of their business model.

Revenue Growth Acceleration

AudioEye's guidance indicates an acceleration of revenue growth throughout 2024. This chart illustrates the projected quarterly revenue growth based on the midpoint of their guidance:

While the market seems to be fixated on short-term metrics, the long-term picture for AudioEye is nothing short of extraordinary. The sleeping giant is waking up, and the rumble of its awakening could soon shake the entire digital accessibility landscape.

Hypothesis:

This analysis suggests that the DOJ mandate alone could drive a significant increase in AudioEye's ARR, potentially exceeding $56 million within the next two to three years. The added revenue stream from maintenance services could further boost their annual revenue to over $250 million.

"Fun Fact: The Web Content Accessibility Guidelines (WCAG) are developed through a process of collaboration and consensus building, involving individuals and organizations from around the world. This global effort reflects the importance of digital accessibility as a fundamental human right."