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Audience (the Company) Deserves a Standing Ovation

Tickers in this article: AAPL ADNC
NEW YORK ( TheStreet) -- The bears thought that the old saying, "An apple a day keeps the doctor away," would apply to Audience (ADNC) .

Without Apple (AAPL) as a customer, Audience's financial health would surely suffer, they thought.

But Audience has reported two solid quarters in a row, proving the bears wrong.

Many doubted Audience could produce an encore performance similar of its strong third quarter, when it grew both revenue and earnings per share by more than 50% year over year.

But Audience's fourth quarter report was impressive. Even better, the company issued an outlook that suggests the best is yet to come.

For the period ending in December, the company posted revenue of $38.7 million, up 115% year over year and beating Street estimates for $31.8 million. Audience posted net income of $3.1 million, or 14 cents per share, reversing a year-ago loss of $5.6 million, or $5.56 per share.

Profitability was also impressive as gross margins increased to 54% of revenue from 44.6% a year ago. This is exceptionally noteworthy because in the previous quarter management had expected margins to remain unchanged at best

In terms of outlook for the March quarter, Audience expects revenue of between $43 million and $46 million, ahead of analysts' average estimates of $31.8 million.

After Audience reported its fourth-quarter results, its shares immediately soared 24%. This means that shares have now surged more than 155% since bottoming at $5.51 in October.

Despite this strong performance, shares are still down over 56% from last year's highs of $23. Why? Investors panicked after Audience announced last summer that Apple opted not to use the company's noise suppression technology in the iPhone 5 -- sending the stock plummeting more than 80%.

Now Audience, which has been public for less than a year, seems like a new company. Although many investors jumped into the stock expecting the famed "halo effect" to take over, the management of Audience has proven that there is life outside of Apple, or at least financial health.

Audience still has some prominent customers including Google (GOOG) and Samsung. So it's not as if Audience was left without a "program." The company still had a revenue plan.

Although Audience has recovered quicker and much better than expected, Apple was still responsible for 40% of the company's overall revenue, making the loss of Apple as a customer significant.

Apple still provides 33% of Audience's revenue, and Audience management expects that percentage to continue to decline as Apple rolls out new products that won't include Audience's technology.

However, this brings up an interesting question. With Apple's reputation for having a strong emphasis and focus on the user experience, what does it say about Audience's technology that Apple feels it can do without it?