The AudioEye Solutions
At its core, AudioEye’s offering provides an always-on testing, remediation, and monitoring solution that continually improves conformance with WCAG. This in turn helps businesses and organizations comply with WCAG standards as well as applicable U.S. and foreign accessibility laws. Our technology is capable of immediately identifying and fixing most of the common accessibility errors and addresses a wide range of disabilities including dyslexia, color blindness, epilepsy and more. AudioEye also offers additional solutions to provide for enhanced compliance and accessibility, including periodic manual auditing, manual remediations and legal support services. Our solutions may be purchased through a subscription service on a month-to-month basis or with one or multi-year terms. We also offer PDF remediation services and Website and Native Mobile App audit reports to help our customers with their digital accessibility needs.
Intellectual Property
Our intellectual property is primarily comprised of copyrights, trademarks, trade secrets, issued patents and pending patent applications. We have a patent portfolio comprised of twenty-four (24) issued patents in the United States and three (3) pending US patent applications. The commercial value of these patents is unknown.
We plan to continue to invest in research and development and expand our portfolio of proprietary intellectual property.
Our Annual Report filed on Form 10-K for the year ended December 31, 2021 as filed with the SEC on March 11, 2022 provides additional information about our business and operations.
Executive Overview
AudioEye is an industry-leading digital accessibility platform delivering website accessibility compliance at all price points to businesses of all sizes. Our solutions advance accessibility with patented technology that reduces barriers, expands access for individuals with disabilities, and enhances the user experience for a broader audience. In the third quarter of 2022 we continued to focus on product innovation and expanding revenue and managing expenses for efficient outcomes.
We have two sales channels to deliver our product, the Partner and Marketplace channel and the Enterprise channel. AudioEye continues to focus on growth in both channels, while still offering our Website and Native Mobile App and PDF services. On March 9, 2022, AudioEye acquired the Bureau of Internet Accessibility which has contributed to Enterprise revenue in 2022. As of September 30, 2022, Annual Recurring Revenue (“ARR”) was approximately $29.3 million, which represented an increase of 19% year-over-year. Refer to Other Key Operating Metrics below for details on how we calculate ARR.
As of September 30, 2022, AudioEye had approximately 81,000 customers, an increase from 80,000 customers at September 30, 2021. Customer count increased in both the Enterprise and Partnership and Marketplace channel. In the three months ended September 30, 2022, revenue from our Partners and Marketplace grew 19% from prior year comparable period. This channel represented about 56% of ARR contribution at the end of September 2022.
In the three months ended September 30, 2022, total Enterprise revenue inclusive of revenue from the Bureau of Internet Accessibility grew by 30% from prior year comparable period. The Enterprise channel represented about 44% of ARR contribution at the end of September 2022.
In the three months ended September 30, 2022, one customer (including affiliates of such customer) accounted for 16% of our total revenue. In the three months ended September 30, 2021, two customers accounted for 20% and 11%, respectively, of our total revenue.
The Company continued to invest in Research and Development in the third quarter of 2022. Total Research and Development cost, as defined under Research and Development Expenses below, was 24% of total revenue in Q3 2022. Both Research and Development and Sales and Marketing expense were lower than the comparable quarter of 2021 as a result of efficiencies identified and implemented in these departments. General and Administrative expense remained consistent with the comparable quarter of 2021 despite the increase in revenue and gross profit.
We provide further commentary on our Results of Operation below.