Technology
AudioEye Reports Record Third Quarter 2026 Results
Published
8 hours agoon
By
Third quarter GAAP net income profitability of $1 million with expectation of increased profitability in the fourth quarter
Third quarter adjusted EBITDA up 58% year over year, and the fourth quarter expected to be up 56% year over year
Sequential annualized fourth quarter revenue growth expected of approximately 20%
TUCSON, Ariz., Oct 26, 2026 /PRNewswire/ — AudioEye, Inc. (Nasdaq: AEYE) (“AudioEye” or the “Company”), an industry-leading digital accessibility company, reported financial results for the third quarter ended September 30, 2026.
“Starting in 2025 we set an aspirational goal of producing 30-40% annual growth over three years in adjusted EBITDA and adjusted EPS. In the second year, we are on track to exceed this goal with approximately 50% year-over-year growth while also generating GAAP profitability in the third quarter. In Q3 gross margins also improved by over 550 basis points to 83%, with an adjusted gross margin of 88%. We are increasing adjusted EBITDA guidance, and we now expect to generate over $17 million of annualized adjusted EBITDA in the fourth quarter with continued GAAP profitability. We also expect to generate significant cash going forward and recently announced a stock repurchase program of $15 million, which represents 15% of the outstanding shares at current prices,” said Kelly Georgevich, Chief Executive Officer of AudioEye. “The business is strong, and we expect annualized sequential revenue growth of approximately 20% in the fourth quarter, contributing to increased operating leverage.”
Georgevich continued, “In October, we launched two new AI products, Agentic Audits and the AudioEye SDK MCP, both powered by AudioEye Intelligence, our proprietary dataset built from more than one million human reviews over a decade. We expect that these new tools will improve our industry leading legal protection rate even further.”
Third Quarter 2026 Financial Results
Total revenue increased 7% to a record $11.0M from $10.2M in the same prior year period. During 2026, the Company has reduced its emphasis on non-recurring revenue to focus on growing Annual Recurring Revenue (“ARR”), which grew 12% in the third quarter over the same prior year period.Gross profit increased to $9.1M (83% of total revenue) from $7.9M (77% of total revenue) in the same prior year period. The increase in gross profit was driven by higher sales and efficiencies including AI use.Adjusted gross margin was 88% in the third quarter of 2026 compared to 83% in the same prior year period. Adjusted gross margin is defined as gross margin adjusted for non-cash items such as stock-based compensation and depreciation and amortization expenses in cost of revenue.Operating expenses were $7.8M, a decrease of 5% from the comparable prior year period. The decrease was primarily due to lower sales and marketing expenses as well as reduced research and development expenses driven by AI efficiencies.Net income was $1.0M, or $0.08 per diluted share, compared to a net loss of $(0.6M), or $(0.04) per diluted share, in the same prior year period. The change was primarily due to higher gross profit and lower operating expenses.Adjusted EBITDA was $3.9M, and adjusted EPS was $0.30 per diluted share, compared to adjusted EBITDA of $2.5M and adjusted EPS of $0.19 per diluted share in the same prior year period. For Q3 2026, the adjusted EBITDA and adjusted EPS results reflect adjustments primarily for stock-based compensation expense, depreciation and amortization, litigation expense, and interest expense.ARR as of September 30, 2026 increased sequentially to $43.3M from $42.3M as of June 30, 2026.At September 30, 2026 the Company had $9.3M in cash and cash equivalents.
Other Updates
On October 20, 2026, AudioEye announced that its Board of Directors authorized the repurchase of up to $15 million of the Company’s outstanding common stock through October 18, 2027. The new program replaces the Company’s prior share repurchase authorization and is expected to be funded with working capital and cash from operations.On October 8, 2026, AudioEye launched two new AI products, Agentic Audits and the AudioEye SDK MCP, both powered by AudioEye Intelligence, the Company’s proprietary accessibility dataset built from over one million human reviews across more than 100,000 sites. Agentic Audits deploy an AI agent that navigates a site the way a person would and can find up to 50% more high-severity issues than automation alone, while the SDK MCP brings AudioEye Intelligence directly into the AI coding tools developers already use.On September 30, 2026, AudioEye published research showing that leading AI coding tools failed to build accessible websites, with 91% of the issues found rated medium or high severity.On September 24, 2026, AudioEye published research showing that AI agents completed up to 68% fewer tasks and used 43% more tokens on average on inaccessible websites, demonstrating that digital accessibility is the foundation for AI readiness.On August 27, 2026, AudioEye released UK findings from its 2026 Digital Accessibility Index, which scanned over 14,400 pages across 475 UK websites and found an average of 66 accessibility issues per page, with AI search increasingly routing users to less accessible interior pages.As of September 30, 2026, AudioEye had approximately 130,000 customers, up 7,000 year-over-year from September 30, 2025, driven by increases in both the Partner and Marketplace channel and Enterprise channel.
Financial Outlook
AudioEye expects revenue of between $11.4M and $11.6M for the fourth quarter of 2026, which is expected to result in revenue of between $43.6M and $43.8M for the full year 2026. The Company expects adjusted EBITDA of between $4.2M and $4.4M for the fourth quarter of 2026, which raises expected full year 2026 adjusted EBITDA to between $13.4M and $13.6M, representing approximately 50% year-over-year growth. The Company expects adjusted EPS of between $0.32 and $0.33 per share for the fourth quarter of 2026 and at least $1.04 per share for the full year 2026.
Conference Call Information
AudioEye management will hold a conference call today, October 26, 2026, at 4:30 p.m. Eastern time (1:30 p.m. Pacific time) to discuss these results, followed by a question-and-answer period.
Date: Monday, October 26, 2026
Time: 4:30 p.m. Eastern Time (1:30 p.m. Pacific Time)
U.S. dial-in number: 877-407-8289
International number: 201-689-8341
Webcast: Q326 Webcast Link
Please call the conference telephone number 5-10 minutes prior to the start time. If you have any difficulty connecting with the conference call, please contact Gateway Group at 949-574-3860.
The conference call will also be webcast live and available for replay via the investor relations section of the Company’s website. The audio recording will remain available via the investor relations section of the Company’s website for 90 days.
A telephonic replay of the conference call will also be available after 7:30 p.m. Eastern Time on the same day through November 9, 2026 via the following numbers:
Toll-free replay number: 877-660-6853
International replay number: 201-612-7415
Replay passcode: 13763375
Due to rounding, numbers presented throughout this document may not add up precisely to the totals provided and percentages may not precisely reflect the absolute figures.
About AudioEye
AudioEye exists to ensure the digital future we build is accessible for people with disabilities and AI agents. AudioEye’s comprehensive solution for over 130,000 customers combines industry-leading AI automation technology with expert fixes informed by the disability community. This powerful combination delivers industry-leading protection against lawsuits and readiness for AI agents. With 25 US patents, AudioEye’s solution includes 24/7 accessibility monitoring, automated WCAG issue testing and fixes, expert testing, developer tools, and legal protection, empowering organizations to confidently create accessible digital experiences for all.
Forward-Looking Statements
All statements in this press release about AudioEye’s expectations, beliefs, plans, objectives, prospects, financial condition, assumptions or future events or performance are not historical facts and are “forward-looking statements” as that term is defined under the federal securities laws. Forward-looking statements are often, but not always, made through the use of words or phrases such as “believe”, “anticipate”, “should”, “confident”, “intend”, “plan”, “will”, “expects”, “estimates”, “projects”, “positioned”, “strategy”, “outlook” and similar words. You should read the statements that contain these types of words carefully. Such forward-looking statements contained herein include, but are not limited to, statements regarding future cash flows of the Company, anticipated contributions from new sales channels, long-term growth prospects, opportunities in the digital accessibility industry, our revenue, adjusted EBITDA, adjusted EPS and ARR guidance, and our expectation of investments in marketing and sales. These statements are subject to a number of risks, uncertainties and other factors that could cause actual results to differ materially from what is expressed or implied in such forward-looking statements, including the variability of AudioEye’s revenue and financial performance; sales channels and offerings; product development and technological changes; the acceptance of AudioEye’s products in the marketplace; the effectiveness of our integration efforts; competition; inherent uncertainties and costs associated with litigation; and general economic conditions. These and other risks are described more fully in AudioEye’s filings with the Securities and Exchange Commission. There may be events in the future that AudioEye is not able to predict accurately or over which AudioEye has no control. Forward-looking statements reflect management’s view as of the date of this press release, and AudioEye urges you not to place undue reliance on these forward-looking statements. AudioEye does not undertake any obligation to update such forward-looking statements to reflect events or uncertainties after the date hereof.
About Key Operating Metrics
We consider annual recurring revenue (“ARR”) as a key operating metric and a key indicator of our overall business. We also use ARR as one of the primary methods for planning and forecasting overall expectations and for evaluating, on at least a quarterly and annual basis, actual results against such expectations.
We manage customers through two primary channels, Enterprise and Partner and Marketplace. Enterprise channel consists of our larger customers and organizations, including those with non-platform custom websites, who generally engage directly with AudioEye sales personnel for custom pricing and solutions. This channel also includes federal, state and local government agencies. The Partner and Marketplace channel consists of our CMS partners, platform & agency partners, authorized resellers and our marketplace. This channel serves small and medium sized businesses who are on a partner or reseller’s web-hosting platform or who purchase an AudioEye solution from our marketplace.
We define ARR as the sum of (i) for our Enterprise channel, the total of the annualized recurring fee at the date of determination under each active contract, plus (ii) for our Partner and Marketplace channel, the annual or monthly recurring fee for all active customers at the date of determination, in each case, assuming no changes to the subscription, multiplied by 12 if applicable. Recurring fees are defined as revenues expected to be generated from services typically offered as a subscription service or annual service offering such as our automation and platform, periodic auditing, human-assisted technological fixes, legal support and professional service offerings and other services that reoccur on a multi-year contract. This determination includes both annual and monthly contracts for recurring products. Some of our contracts are terminable prior to the expected term, which may impact future ARR. ARR excludes non-recurring fees, which are defined as revenue expected to be generated from services typically not offered as a subscription service or annual service offering such as our PDF remediation services business, one-time website and mobile application reports, and other miscellaneous services that are offered as non-subscription services or are expected to be one-time in nature.
Use of Non-GAAP Financial Measures
From time to time, we review adjusted financial measures that assist us in comparing our operating performance consistently over time, as such measures remove the impact of certain items, as applicable, such as our capital structure (primarily interest charges), certain non-cash items, including stock compensation and depreciation and amortization expense, and other expenses that do not relate to our core operations, including significant transaction and litigation-related expenses and other costs that are expected to be non-recurring. In order to provide investors with greater insight and allow for a more comprehensive understanding of the information used in our financial and operational decision-making, the Company has supplemented the consolidated financial statements presented on a GAAP basis in this press release with the following non-GAAP financial measures: Adjusted EBITDA, Adjusted EBITDA margin, Adjusted earnings (loss) per diluted share (adjusted EPS) and Adjusted gross margin.
These non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation or as a substitute for analysis of Company results as reported under GAAP. The Company compensates for such limitations by relying primarily on our GAAP results and using non-GAAP financial measures only as supplemental data. We also provide a reconciliation of non-GAAP to GAAP measures used. Investors are encouraged to carefully review this reconciliation. In addition, because these non-GAAP measures are not measures of financial performance under GAAP and are susceptible to varying calculations, these measures, as defined by us, may differ from and may not be comparable to similarly titled measures used by other companies.
Adjusted EBITDA, Adjusted EBITDA Margin, and Adjusted Earnings (Loss) per Diluted Share
We define: (i) Adjusted EBITDA as net income (loss), plus interest expense, plus depreciation and amortization expense, plus stock-based compensation expense, less change in fair value of contingent consideration, plus certain litigation expense, plus certain acquisition expense, plus certain severance expense, plus loss on disposal or impairment of long-lived assets, plus loss on extinguishment of debt, and plus lost deposit on alternative financing; (ii) Adjusted EBITDA margin as Adjusted EBITDA as a percentage of GAAP revenue; and (iii) Adjusted earnings (loss) per diluted share (EPS) as net income (loss) per diluted common share, plus interest expense, plus depreciation and amortization expense, plus stock-based compensation expense, less change in fair value of contingent consideration, plus certain litigation expense, plus certain acquisition expense, plus certain severance expense, plus loss on disposal or impairment of long-lived assets, plus loss on extinguishment of debt, and plus lost deposit on alternative financing, each on a per share basis. Adjusted earnings per diluted share includes incremental shares in the share count that are considered anti-dilutive in a GAAP net loss position.
Adjusted Gross Margin
We define Adjusted gross margin as gross profit, plus stock-based compensation expense and depreciation and amortization expense allocated to cost of revenue, expressed as a percentage of total revenue.
Adjusted EBITDA, Adjusted EBITDA margin, Adjusted earnings (loss) per diluted share, and Adjusted gross margin are used to facilitate a comparison of our operating performance on a consistent basis from period to period and provide for a more complete understanding of factors and trends affecting our business than GAAP measures alone. All of the items adjusted in these calculations are either recurring non-cash items or items that management does not consider in assessing our ongoing operating performance. In the case of the non-cash items, such as stock-based compensation expense and valuation adjustments to assets and liabilities, management believes that investors may find it useful to assess our comparative operating performance because the measures without such items are expected to be less susceptible to variances in actual performance resulting from expenses that do not relate to our core operations and are more reflective of other factors that affect operating performance. In the case of items that do not relate to our core operations, management believes that investors may find it useful to assess our operating performance if the measures are presented without these items because their financial impact does not reflect ongoing operating performance.
Adjusted EBITDA is not a measure of liquidity under GAAP, or otherwise, and is not an alternative to cash flow from continuing operating activities, despite the advantages regarding the use and analysis of these measures as mentioned above. Adjusted EBITDA, Adjusted EBITDA margin, Adjusted earnings (loss) per diluted share, and Adjusted gross margin, as disclosed in this press release, have limitations as analytical tools, and you should not consider these measures in isolation or as a substitute for analysis of our results as reported under GAAP; nor are these measures intended to be measures of liquidity or free cash flow.
To properly and prudently evaluate our business, we encourage readers to review the consolidated GAAP financial statements included in this press release and not rely on any single financial measure to evaluate our business. Reconciliations of Adjusted EBITDA to net income (loss), the most directly comparable GAAP-based measure, Adjusted earnings (loss) per diluted share to net income (loss) per diluted share, the most directly comparable GAAP-based measure, and Adjusted gross margin to gross margin, the most directly comparable GAAP-based measure are provided in tables later in this press release. We strongly urge readers to review these reconciliations, along with the financial statements included in this press release.
Forward-Looking Non-GAAP Financial Measures
This press release and statements made in our conference call today also include the forward-looking non-GAAP financial measures of adjusted EBITDA, adjusted EBITDA margin, adjusted EPS and free cash flow guidance for the fourth quarter and full year 2026. We calculate forward-looking non-GAAP financial measures based on internal forecasts that omit certain amounts that would be included in GAAP financial measures. We have not provided quantitative reconciliations of these forward-looking non-GAAP financial measures to the most directly comparable forward-looking GAAP financial measures because the excluded items are not available on a prospective basis without unreasonable efforts. In addition, the Company believes such reconciliations would imply a degree of precision and certainty that could be confusing to investors. It is probable that these forward-looking non-GAAP financial measures may be materially different from the corresponding GAAP financial measures.
Investor Contact:
Tom Colton
Gateway Group, Inc.
AEYE@gateway-grp.com
949-574-3860
AUDIOEYE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
Three months ended September 30,
Nine months ended September 30,
(in thousands, except per share data)
2026
2025
2026
2025
Revenue
$
10,963
$
10,227
$
32,232
$
29,817
Cost of revenue
1,871
2,312
6,439
6,545
Gross profit
9,092
7,915
25,793
23,272
Operating expenses:
Selling and marketing
3,304
3,649
10,806
11,169
Research and development
889
1,118
2,848
3,471
General and administrative
3,644
3,506
13,365
10,998
Change in fair value of contingent consideration
—
(40)
—
(1,350)
Total operating expenses
7,837
8,233
27,019
24,288
Operating income (loss)
1,255
(318)
(1,226)
(1,016)
Other expense:
Interest expense, net
(265)
(236)
(763)
(709)
Loss on extinguishment of debt
—
—
—
(300)
Total other expense
(265)
(236)
(763)
(1,009)
Net income (loss)
$
990
$
(554)
$
(1,989)
$
(2,025)
Net income (loss) per common share – basic
$
0.08
$
(0.04)
$
(0.16)
$
(0.16)
Net income (loss) per common share – diluted
$
0.08
$
(0.04)
$
(0.16)
$
(0.16)
Weighted average common shares outstanding – basic
12,583
12,414
12,512
12,417
Weighted average common shares outstanding – diluted
12,971
12,414
12,512
12,417
AUDIOEYE, INC.
CONSOLIDATED BALANCE SHEETS
(unaudited)
September 30,
December 31,
(in thousands, except per share data)
2026
2025
ASSETS
Current assets:
Cash and cash equivalents
$
9,327
$
5,288
Accounts receivable, net
5,772
6,557
Prepaid expenses and other current assets
878
777
Total current assets
15,977
12,622
Property and equipment, net
105
146
Right of use assets
297
168
Intangible assets, net
10,826
12,515
Goodwill
6,682
6,682
Other
41
97
Total assets
$
33,928
$
32,230
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued expenses
$
3,442
$
4,851
Operating lease liabilities
57
218
Deferred revenue
8,350
8,619
Contingent consideration
300
225
Term loan, current
850
503
Total current liabilities
12,999
14,416
Long term liabilities:
Term loan, net
15,380
12,479
Operating lease liabilities
254
—
Deferred revenue
81
5
Contingent consideration, long term
—
300
Other
138
226
Total liabilities
28,852
27,426
Stockholders’ equity:
Preferred stock, $0.00001 par value, 10,000 shares authorized
Common stock, $0.00001 par value, 50,000 shares authorized, 12,676 and 12,383 shares
issued and outstanding as of September 30, 2026 and December 31, 2025, respectively
1
1
Additional paid-in capital
110,937
108,201
Accumulated deficit
(105,862)
(103,398)
Total stockholders’ equity
5,076
4,804
Total liabilities and stockholders’ equity
$
33,928
$
32,230
AUDIOEYE, INC.
RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES
(unaudited)
Three months ended September 30,
Nine months ended September 30,
(in thousands, except per share data)
2026
2025
2026
2025
Adjusted EBITDA Reconciliation
Net income (loss) (GAAP)
$
990
$
(554)
$
(1,989)
$
(2,025)
Change in fair value of contingent consideration
—
(40)
—
(1,350)
Interest expense, net
265
236
763
709
Stock-based compensation expense
1,191
1,281
3,678
3,693
Acquisition expense (1)
21
—
123
33
Litigation expense (2)
492
607
3,398
1,936
Severance expense (3)
—
—
344
304
Lost deposit on alternative financing
—
—
—
50
Depreciation and amortization
927
918
2,901
2,581
Loss on disposal or impairment of long-lived assets
—
5
5
61
Loss on extinguishment of debt
—
—
—
300
Adjusted EBITDA
$
3,886
$
2,453
$
9,223
$
6,292
GAAP Net income (loss) as a percent of revenue
9
%
(5)
%
(6)
%
(7)
%
Adjusted EBITDA margin (4)
35
%
24
%
29
%
21
%
Adjusted Earnings per Diluted Share Reconciliation
Net income (loss) per common share (GAAP) — diluted
$
0.08
$
(0.04)
$
(0.16)
$
(0.16)
Change in fair value of contingent consideration
—
—
—
(0.10)
Interest expense, net
0.02
0.02
0.06
0.06
Stock-based compensation expense
0.09
0.10
0.29
0.29
Acquisition expense (1)
—
—
0.01
—
Litigation expense (2)
0.04
0.05
0.26
0.16
Severance expense (3)
—
—
0.03
0.02
Lost deposit on alternative financing
—
—
—
—
Depreciation and amortization
0.07
0.07
0.23
0.20
Loss on disposal or impairment of long-lived assets
—
—
—
—
Loss on extinguishment of debt
—
—
—
0.02
Adjusted earnings per diluted share (5)
$
0.30
$
0.19
$
0.72
$
0.50
Diluted weighted average shares (GAAP)
12,971
12,414
12,512
12,417
Includable incremental shares (Non-GAAP) (5)
—
229
348
174
Adjusted diluted shares (Non-GAAP)
12,971
12,643
12,860
12,591
(1)
Represents professional fees incurred in connection with acquisitions and dissolutions.
(2)
Represents legal expenses related primarily to non-recurring litigation.
(3)
Represents severance expense for an employee from a previously acquired business and for employees impacted by a reduction in force in 2026.
(4)
Adjusted EBITDA margin represents Adjusted EBITDA as a percentage of GAAP revenue.
(5)
Adjusted earnings per adjusted diluted share for our common stock is computed using the treasury stock method.
AUDIOEYE, INC.
RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES
(unaudited)
Three months ended September 30,
Nine months ended September 30,
(in thousands)
2026
2025
2026
2025
Adjusted Gross Margin Reconciliation
Revenue
$
10,963
$
10,227
$
32,232
$
29,817
Less: Cost of revenue
1,871
2,312
6,439
6,545
Gross profit (GAAP)
$
9,092
$
7,915
$
25,793
$
23,272
Gross margin (GAAP)
83
%
77
%
80
%
78
%
Add expenses included in cost of revenue:
Depreciation and amortization
$
466
$
494
$
1,458
$
1,432
Stock-based compensation
56
61
202
198
Adjusted gross profit (non-GAAP)
$
9,614
$
8,470
$
27,453
$
24,902
Adjusted gross margin (non-GAAP)
88
%
83
%
85
%
84
%
View original content to download multimedia:https://www.prnewswire.com/news-releases/audioeye-reports-record-third-quarter-2026-results-302919827.html
SOURCE AudioEye, Inc.
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View original content to download multimedia:https://www.prnewswire.com/news-releases/us-news–world-report-reveals-the-2027-best-places-to-retire-302920068.html
SOURCE U.S. News & World Report, L.P.
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ATLANTA, Oct. 27, 2026 /PRNewswire/ — At TechXchange 2026, IBM (NYSE: IBM) is announcing new capabilities to help developers, IT and security teams put AI agents to work across business systems with clear authority and accountability. IBM brings together agent discovery, verified identities, access controls and performance evaluation to help organizations understand who owns each agent, control what it can access, and trace its actions across existing applications and infrastructure.
According to Gartner, by 2028 the average Fortune 500 enterprise will use over 150,000 AI agents. But only 13% of organizations believe that they have the right AI agent governance in place [1]. Persistent credentials, unclear ownership and disconnected controls make it harder to govern agents as they interact with other agents, invoke tools and act across teams, platforms and clouds.
“The winners in enterprise AI are changing how their business runs, not simply adding more AI to it,” said Dinesh Nirmal, Senior Vice President, IBM Software. “For agents to take on real work across the systems a company depends on, it requires an AI operating model – one that connects agents to the business’s data, applications and infrastructure and runs them with the same discipline as its most critical systems. Build trust and control into that model, and agents stop being a technology and become a way of doing business.”
Today’s announcements extend IBM’s portfolio to deliver an AI operating model of four essential systems working together: agents, data, automation and hybrid infrastructure. This starts with the trust and control every agent needs – a verified identity, only the access it needs, and one place to discover, secure and evaluate agents regardless of where they were built.
Extending HashiCorp Vault to AI agents
HashiCorp Vault manages the secrets and credentials that applications and services use to access business systems. It provides that control through centrally managed secrets, automated rotation for supported credentials, and dynamically generated credentials that expire or can be revoked. These capabilities help reduce the time exposed credentials remain usable and limit access to the permissions configured for each role.
HashiCorp Vault already secures non-human identities for organizations including ABN AMRO, Adobe, athenahealth, BBVA, BlackRock, Canva, Duke Energy, Expedia, London Stock Exchange, Starbucks, Swiss Federal Railways and Target, across systems that process billions of dollars in transactions [2]. HashiCorp will now extend those capabilities to AI agents, issuing secured, short-lived credentials that limit each agent to what it needs.
Establishing agent identity and accountability
AI agents are a growing class of non-human identity, alongside applications and services. As they begin acting across business systems, enterprises need a clear record of who owns each agent and what authority it has been granted. HashiCorp is combining governed agent identity with credential controls to help organizations delegate work with defined authority and accountability.
When used with HashiCorp Vault, Agent Identity establishes the authoritative record for each agent, such as who owns it, its lifecycle status and the authority it has been granted. Built to extend existing identity and security investments, it shares relevant identity and authorization context with Vault’s credential controls – ultimately enforcing least-privilege access and enabling real-time revocation when an agent attempts an unauthorized action.
Controlling agent credentials and access
Identifying an agent is only the start. Enterprises also need to control the credentials it uses to reach databases, applications and cloud services – and how long those credentials remain valid. As agents invoke tools and act across business systems, their credentials become a critical security boundary. An agent with a long-lived, overprivileged credential can put systems and data at risk if it’s compromised or acts outside its intended task. Enterprises need to establish what each agent’s job is, limit the access it receives and revoke that access when circumstances change.
These controls extend beyond initial authentication. If an agent attempts to retrieve information or perform actions outside its approved permissions, the access can be denied and session revoked in real time to prevent unauthorized activity. Vault’s short-lived credentials and least-privilege controls can further restrict what an agent accesses and the duration of those permissions.
Additional capabilities include:
Vault 2.2 gives agents their own secured accounts, automatically renews their credentials and incorporates post-quantum encryption for quantum-era threats. Secure Hub (public preview) gives companies centralized visibility across their Vault environments to make it easier to understand operational health, usage and security resources.
At TechXchange, client speakers will share how they use Vault to secure enterprise applications, workloads and AI agents
athenahealth: Automating certificate management with Vault’s PKI engine. Albert Einstein College of Medicine: Applying IBM Verify and Vault to AI agent identity, just-in-time access, dynamic secrets and auditability. Optum: Using Vault Radar to detect exposed secrets and Boundary for just-in-time, identity-based access. Seven-Eleven Japan: Centralizing and encrypting secrets with Vault Enterprise and detecting hardcoded secrets with Vault Radar. Yum! Brands: Building an identity security platform with IBM Verify, with a look ahead to machine identities and secrets management.
“AI presents extraordinary opportunities to accelerate biomedical research and discovery, but realizing its potential requires a foundation of security, trust, and responsible governance,” said Shailesh M. Shenoy, Assistant Dean for Information Technology at Albert Einstein College of Medicine. “In my experience, technologies such as IBM Verify and HashiCorp Vault can play an important role in helping organizations establish the identity, access, and security controls needed to innovate with confidence.”
Managing agents across platforms
Identity tells organizations what an agent is. But they also need to see every agent they have, wherever it was built. IBM watsonx Orchestrate works across the AI ecosystem, not inside a single vendor’s platform, to give organizations one place to discover, secure and evaluate their agents. Capabilities include:
Discover (tech preview): Organizations can’t govern agents they don’t know exist. Orchestrate connects to platforms such as Amazon Bedrock, Microsoft Foundry and Google Gemini to find agents built in third-party environments, so teams can see and manage agents instead of adding them manually. This capability also extends to models and MCP servers. Contain (tech preview): One rogue agent can disrupt others and spread mistakes across the business. Orchestrate now runs agents in isolated sandboxes so a rogue agent can’t interfere with others. Teams also now have access to a kill switch to shut down any agent. Evaluate: Agents that aren’t tested and tracked can quietly drift off course and increase costs. Teams using Orchestrate can now test the quality, accuracy and compliance of agents, models and MCP servers before deployment, then monitor them in production. Built-in cost tracking shows each agent’s model and token use, so teams can spot what’s driving spend and fix it.
Orchestrate also works with Vault’s credential controls and Agent Identity to establish what each agent’s job is, govern its authority and enforce least-privilege credential access. Together, these controls help organizations authorize and audit agent actions and rapidly revoke trust and credentials when risk changes.
Connecting agents to the business
Once agents are authorized to use a company’s APIs and tools, they need to know what already exists, how systems connect, what can be reused safely and what their actions could affect. IBM Integration Intelligence Hub is built to provide that knowledge through its Unified Context Engine, so agents can fix problems like stuck messages or deploy an API using what’s already in place. Skills, approval policies and audit controls keep those actions in check. Instead of rebuilding for AI, organizations can put agents to work on the systems they already depend on.
Scaling agents with NVIDIA
Agent Identity and HashiCorp Vault integrate with NVIDIA OpenShell secure runtime software, the foundation of the NVIDIA OpenShell Architecture. Together, they pair a protected environment for agents to run in with a verified identity and short-lived credentials for every agent, so each action can be traced, limited and reviewed.
“Businesses need enforceable control over how agents operate and what they can access,” said John Fanelli, vice president, enterprise software, NVIDIA. “Our work with IBM combines NVIDIA OpenShell’s policy-governed runtime with Agent Identity and HashiCorp Vault to help enterprises scale AI agents with secure execution, verified identities and tightly scoped access to business systems.”
Responding to Emerging Security Threats
When new vulnerabilities are discovered, enterprises must quickly identify affected systems, determine required changes and deploy fixes without disrupting critical operations. In complex environments, this process often involves multiple teams, tools and processes.
IBM Concert integrates observability, optimization, incident management and security across applications, infrastructure and networks. With AI-powered insights and proof of exploitability, Concert helps teams to identify high-risk vulnerabilities, assess operational impact, and coordinate responses. These capabilities also help organizations address performance, manage costs and maintain resilience in hybrid environments.
HashiCorp Terraform provides an infrastructure context and governed workflows for change implementation. New features now generally available and in public preview, including Terraform policy, Terraform Developer Portal and Terraform remote MCP server, enable developers and AI agents to access approved configurations and implement infrastructure changes through established controls. Terraform powered by Infragraph also helps teams understand infrastructure relationships and dependencies for more informed decisions.
Together, these capabilities enable organizations to progress from identifying vulnerabilities to implementing and verifying remediation, while optimizing the visibility and governance essential for enterprise operations.
A comprehensive system intelligence and change orchestration layer for IBM Z
IBM Z Atlas maps a client’s entire z/OS stack across infrastructure, middleware, and applications, and then uses that intelligence to address the manual effort of tasks like patch management, regulatory response, and sharing system knowledge across teams, from systems programmers to application developers. Atlas addresses the leading cause of unplanned z/OS outages – changes that aren’t proven to be safe – by mapping how a change impacts the z/OS stack and testing and validating it. This design (in tech preview) accelerates clients’ modernization efforts by keeping experts in control and giving practitioners, in operations or development, the same shared Z system visibility to reduce risk.
Availability
HashiCorp Vault 2.2, Agent Identity, watsonx Orchestrate evaluate capabilities, IBM Concert, and HashiCorp Terraform policy are generally available. Secure Hub, Terraform Developer Portal, Terraform remote MCP server, and IBM Z Atlas are in public preview. IBM Integration Intelligence Hub and watsonx Orchestrate discover and contain capabilities are in tech preview.
Statements regarding IBM’s future direction and intent are subject to change or withdrawal without notice and represent goals and objectives only.
Learn more
IBM TechXchange is IBM’s annual conference for developers and technology practitioners and brings together nearly 6,500 attendees from 85 countries. This year, the event incorporates HashiConf to bring together the HashiCorp community with practitioners from across IBM, Red Hat and Confluent. Attendees can choose from more than 1,000 sessions and experiences, including 180 hands-on labs, 260 client-led sessions and more than 50 certification exams. Speakers include American Airlines, Bradesco, Citi, CVS Health, Deutsche Bank, DoorDash, Hertz, and US Bancorp who will share how they are making AI enterprise ready.
Session livestream and replays will be available here: ibm.biz/txc26-livestream.
Supporting Materials
Strengthen security for agentic AI with new Vault, Verify, Boundary, and Secure Hub capabilities IBM Agent Identity now generally available: Building Trust for the Agentic Era Vault Enterprise 2.2 advances identity security, PKI, and cryptoagility Announcing the public preview of Secure Hub: govern Vault at scale IBM watsonx Orchestrate advances AI agent management with new capabilities IBM Integration Intelligence Hub gives AI the context to act, not just access IBM Concert platform advances the path to cross-domain agentic IT operations Terraform advances infrastructure lifecycle management for the agentic era Introducing IBM Z Atlas: Change Intelligence for IBM Z
[1]: Gartner Identifies Six Steps to Manage AI Agent Sprawl
[2]: HashiCorp Vault client stories
About IBM
IBM is a leading provider of global hybrid cloud and AI, and consulting expertise. We help clients in more than 175 countries capitalize on insights from their data, streamline business processes, reduce costs and gain the competitive edge in their industries. Thousands of governments and corporate entities in critical infrastructure areas such as financial services, telecommunications and healthcare rely on IBM’s hybrid cloud platform and Red Hat OpenShift to affect their digital transformations quickly, efficiently and securely. IBM’s breakthrough innovations in AI, quantum computing, industry-specific cloud solutions and consulting deliver open and flexible options to our clients. All of this is backed by IBM’s long-standing commitment to trust, transparency, responsibility, inclusivity and service. Visit www.ibm.com for more information.
Media contacts:
Sarah Benchaita
IBM
sarah.benchaita@ibm.com
Kate Lehman
IBM
Kate.Lehman@ibm.com
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Technology
Three Blind Spots Leave Industrial Companies Exposed to Critical Mineral Shortages
Published
9 minutes agoon
October 27, 2026By
Boston Consulting Group Finds Industrial Companies Underestimate Their Critical Mineral Exposure, Which Also Limits Their Access to Public CapitalDemand for Key Minerals Is Projected at 120% to 250% of Forecast Supply Through 2040An Estimated $3.5 Trillion of Products Depend on Gallium, a “Mosquito Mineral” Traded in a Market Under $350 Million a YearSome Governments Have Deployed Less Than 10% of Their Critical Minerals Funds
BOSTON, Oct. 27, 2026 /PRNewswire/ — Industrial companies are underestimating their exposure to critical mineral shortages and missing a strategic opportunity as a result, according to new analysis from Boston Consulting Group (BCG). Three blind spots in the metrics that companies rely on hide where the risk sits, including what BCG calls “mosquito minerals,” so small by traded value that they never reach a risk register.
These are among the findings of Why Critical Mineral Shortages Are a CEO Issue, a BCG report released today. BCG’s proprietary model projects demand for key inputs, including rare earths, graphite, copper and lithium, at roughly 120% to 250% of forecast supply through 2040.
“Most industrials track exposure through spend and direct supplier data, and the minerals that can stop a production line are often the ones they spend almost nothing on,” said Tycho Möncks, a BCG managing director and partner and a coauthor of the report. “The question for CEOs and boards is not whether their company is exposed. It is. The question is whether they intend to live with that exposure or turn it into an advantage.”
Small Markets Can Stall Large Industries
Companies often start their risk assessment with the bill of materials, which points them toward high-volume metals such as copper and lithium. Mosquito minerals fall outside that view. Their traded value is tiny, but the value chains that depend on them are not.
Rare earths. The rare earths used in a fighter jet are worth less than the paint that coats the plane.Gallium. The global market is worth under $350 million a year, with production of only about 900 tons, yet BCG estimates about $3.5 trillion of final products depend on it.Arsenic. The upstream market is about $50 million worldwide, yet a single producer supplies roughly 60% of the ultra-high-purity grade used in 5G and 6G infrastructure, data center optics, radar systems, and defense electronics.Byproduct supply. Gallium, germanium and arsenic are recovered as byproducts of other mining and industrial processes, so the host metal’s market sets their supply. Even a sharp price spike may not bring new production.
Exposure Hides Below Tier One Suppliers
A company that buys almost no critical minerals directly can still be acutely exposed because minerals arrive embedded in motors, magnets, power modules, lasers and sensors. They also sit in the tools and processes used to make those components, from crucibles and catalysts to dies and the capital equipment itself.
Turbine blades, engine blocks and structural aerospace components, for example, are machined with cutting tools made of tungsten carbide bonded with cobalt. A manufacturer that has never bought either metal directly can still see production stop if those tools run short, a dependency that appears on no bill of materials.
Companies also tend to map where critical minerals are mined, but for some minerals the bottleneck is processing, not production. A map of where assets sit and a map of who owns them can look very different, so a change of supplier that looks like diversification may leave a company’s exposure unchanged.
Public Capital Is Committed but Largely Unspent
The three blind spots also lead to a strategic miss. The International Energy Agency reports that public finance commitments to critical minerals in advanced economies reached around $65 billion in 2025, more than four times the 2023 level. BCG’s review of government-backed vehicles found the flagship instruments barely deployed, with some countries having spent less than 10% of their allocated capital and others nothing.
These vehicles are designed to draw in private capital, and offtake requirements are typically the main eligibility gate. BCG argues that companies without a clear view of their own exposure cannot make a credible commitment, and so cannot qualify. The funds are not free money: they carry conditions such as reporting obligations and localization requirements, and they represent only about one tenth of the capital needed through 2040. But for industrial companies, BCG says, they are a way to build a competitive advantage.
Several of the companies that have reframed their approach and tapped public capital are industrial companies and trading firms, not miners, and BCG found that in each case the CEO and executive team led the process of identifying and correcting their blind spots.
“These blind spots have a cost beyond risk. The money is there, but it comes with offtake requirements, and a company cannot make a credible commitment without knowing its own exposure,” said Karthik Valluru, a BCG managing director and senior partner who coauthored the report. “Mapping that exposure properly is where the opportunity starts.”
Download the publication here:
https://www.bcg.com/publications/2026/critical-minerals-risk-blind-spots
Media Contact:
Bruce Wraight
wraight.bruce@bcg.com
About Boston Consulting Group
Boston Consulting Group bridges the gap between ambition and outcomes for the world’s leading companies and organizations. We are built for this era of unprecedented change — bringing strategic clarity rooted in over 60 years of deep domain knowledge, combined with applied AI shaped by our practitioners. BCG works shoulder-to-shoulder with CEOs across industries and geographies to deliver transformative impact at scale: stronger returns, transferred capabilities, and change that sticks. For more information, visit bcg.com.
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SOURCE Boston Consulting Group (BCG)
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