I asked Investor Relations at AEYE how exactly they sold their products? Was it Selling? Leasing? Recurrent revenue? Here is the response I received from investor relations.
The model is as follows for the two primary cases:
Customer Website and Mobile Sites – Customer pays upfront license fee based on reach of website (unique visitors) - 200k per 1m monthly - Customer pays 10k monthly for services fees. Customer pay 18% renewal fee every year.
Licensing – Customer pays 225k down and 12% royalty on all revenue produced – This is for developer companies who serve many accounts. They follow 1 above for pricing customer accounts.
The second model seemed like a distributor, so I then asked: Does that mean that your developers (who seem to be like distributors) keep 88% of fees, and you only get 12%, or do I have it reversed? If they get 88%, why did you give away so much?
They responded: No we get 12% passive royalty for licensing. The reseller uses our pricing guides and can make 15% up to 20% on each deal. We are paid the license and the platform fees. Sorry that was not clear. 12% is the royalty for the right to use. We are then paid for the platform and any services in addition.
All I can say is “Wow!” Double Wow! Upfront license fee, plus $200,000 per month per million unique viewers, plus service feels and renewal fees. Can you realize how fast this is going to pile up for a little company with $1 million revenue in the first quarter! That’s not $200,000 per year, or $200,000 per quarter. That’s $200,000 per month. It’s no wonder their revenue tripled. And it’s no wonder that there are no insider sales.
I’ve heard a lot of disagreement about this stock, and worries about them running out of money. It’s just not going to happen! I really think this could be “The Big One” !
I started buying two weeks ago yesterday, on the 7th, just after they announced tripling of revenues sequentially. My first purchase was at 56 cents. I bought some that day as low as 53.6 cents. I’ve added almost every day since, in the 50’s, 60’s, 70’s, 80’s, and even today in the 90’s. It’s currently at 98 cents. The day high was $1.04. Schwab tells me my average price is 67 cents. I may be wrong, but I think this is really, really going to be a big, big, winner.