BLIN - Earnings call transcript Q4 2024 | Bridgeline Digital, Inc.

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Operator

Thank you for standing by, and welcome to Bridgeline Digital's Fourth Quarter 2024 Earnings Conference Call. [Operator Instructions] I would now like to hand the call over to Tom Windhausen, CFO and Treasurer. Please go ahead.

Thomas Windhausen

Thank you so much. Thank you, and good afternoon, everyone. us joining for you today. Thank Thomas My Financial I'm Chief and of name Bridgeline is Officer Digital. the Windhausen, I'm pleased to quarter welcome you to our conference fiscal call. XXXX fourth

Kahn, you who we'll questions. On President our with quarter, business call with and will this conclude financial of is the then results I update the us a discussion taking and our begin will Ari CEO, highlights. the on call by afternoon Bridgeline's for

expressed Securities over of do. Act made implied should could base today may statements you regulatory obligation they upon those inform today economic, beliefs we our results comments expressly and expectations that differ XXXX results. we safe forward-looking internal by which be during harbor cause of made materially call, to and to change Before to are forward-looking future The the other differ of subject I'd Litigation this to are uncertainties the that projections These the of pursuant XXXX actual to the remind or and and like assume we statements today. Bridgeline's of Act Securities such meaning are as made not or we of an if business, XXE considered from of indication risks events that listeners future statements are disclaim no not statements Securities from materially the begin, factors in projections Reform to are the Section facts Bridgeline XXA or and performance. Changes report Private Section that competitive, of technological, actual results The regarding conference Act time, historical and provisions XXXX. and could within cause

commenting the information reports please documents with other detailed these by more and the from our impact that risks Exchange business, a Bridgeline filed time Digital and please Securities time Commission. Also, when financial review and to non-GAAP may factors in For about financial We will measures afternoon, our on provide discuss our performance. some of note a these measures the we release. this call to on reconciliation the earnings that non-GAAP company's financials GAAP

You our website. I'd turn like President to can by over Ari the obtain earnings CEO. release and to Bridgeline's Kahn, copy our a visiting Ari? of now call

Roger Kahn

everyone. In is to released with AI-powered Tom. hewlettpackard.com you, innovations business, solidifying suite, from to took $XXX,XXX X,XXX language contracts value, in leading ARR has AI-powered distributors AI demonstrates in a annual but consolidated value. year Trading enterprises with in distributors HawkSearch with product and HawkSearch as customers, as licenses Net new revenue the products manufacturers. the value discovery sales HawkSearch million the launched week, us initial only annual ranging Response. Fiscal like natural $X.X $X.X bringing afternoon, doubled like became and also personalization. year Search license 'XX and typically Good million tailored AI-driven Oriental XX over engine. also that delivered AI in Company it top 'XX XX new Smart in to than for with further fiscal we total have distributors sales our FY center adding leader HawkSearch that by sold XXXX, websites XXX for for HawkSearch contracts electric features multiplier, powered every 'XX, Gartner discovery. Today, months. top more $X Smart for Thank AI million like contract In But our BXC X results, XX licensing and XXX%, recognized for per Bridgeline's like HawkSearch HawkSearch advances stage we're HawkSearch. In expand solutions growth BXB by hour a years site is and retention and quarter, our to XX than majority retaining AI nearly not several totaling this and in online contract brands processing contract new which undisputed the we year, HawkSearch to more Diamond in compared for products websites, BXB of highlighting powers are Black platform, We product Bridgeline this that and the customer Bridgeline

Instant in Screws large language with platform. [ hardware, its Electric users content Parts, also, NSI search Some products for distributor Commerce tailored that and the new fastener Advanced materials improve bar. HawkSearch and Autocomplete industry, product e-commerce discovery aftermarket Engage supplier features a The the incorporating year AI-powered distributor selected e-commerce product display enhance their features Tacoma ], customer discovery like search Raney's advanced site. customers relevant countries merchandising content to find truck Configured by languages. Colonial experiences. product (sic) in HawkSearch and interact to model will XX Tacoma leading license leader reseller, their site. And the as chose the experience. wholesale enhance Industries, Screw Optimizely as selected implemented with sales optimize its search HawkSearch automotive distribution include Smart in AI-powered Bridgeline's The XX construction soon to discovery in HawkSearch's Truck a who an industry-trained equipment prominent HawkSearch product supplier on site Industries. Similarly, quickly discovery to and selected need to NSI testing across Search enhances leverage they BXB will parts help Optimizely another for personalized Supply solution and for

drive through product its enterprise-level search Packard usability is for buyers optimize meet not enhanced a eXXX Hewlett large fast, high-performance Bridgeline's to that order licensed It's HawkSearch's product. This with those and one to single visitors search those separately central buyers. for Finally, platforms. HawkSearch hosting a needs visitors on-site capabilities. HawkSearch strategy to with a that catalog products relevant value convert is highlights partnership and huge delivering our chose results scalability, average customer the our sites, suite increase of each into

find our HawkSearch component and agents, UI behavioral learn meet drive of to brand seamlessly match for integrates responses of tone, customer launch in months AI The XX to Response revenue enabling large empowering language people XXXX, help that customers we and needs. content products buy, agents for GenAI our people XXX%. In specific base, CAC to with within search opportunities the allows trends the fine-tune a want to less highly upselling Framework that days, Rapid payback a enables to customers. sales customer than engine sales to to net of creates merchandisers HawkSearch models over to into generate also our retention HawkSearch use websites products suite, a X AI that just efficient customization Smart As rate discover released period a interfaces. It featuring

management language launched more natural Search, NLP further to organizations Multi-Site us scenarios while to MSM AI. strong with competitive language for tailor MSM. oversee merchandising sites, questions Additionally, with of Conversational so to Management, can to deliver networks. Conversational results searches accurate those conversational that to intent content local ask brand by manage is to to transform we local meaningful this customers generative to the for advantages refine ideal understand powered find chains products interactions. search only HawkSearch local a campaigns. and global discovery results the and the used which markets. sites with Natural multiple HawkSearch MSM capability want flexibility Search platform providing both is providing allows into capabilities phrasing is MSM processing, gives leverages numerous where their teams that clarifying with efficient and and they the and quickly then and multiple franchises, product unveiled year, is websites streamlined buy. This ordinary centrally

using from other This specific questions repositories then of tools results. of Smart We answers pages extraction features generative on PDF the Facets, for important feature file AI within language which also PDF summaries content to PDF new model uses search categorization. set to and thumbnails Response and extracting that search ask filter analyzes a e-commerce helpful metadata, to announced to AI including such a automatically large names user content-rich create each introduced as includes We content delivers Smart questions. and allow large and of and detailed site PDFs, to and innovation generative users facets

page that we the Salesforce.com's be HawkSearch's more innovation unified which intelligent into we of Finally, its an Keyword Search customer platform engagement. Two part with continue drive and and for natural is processing of combines Search enhancement language bar, a and Concept advanced of agents. a thousands emphasizes by customers Commerce important capabilities month. results as Unified install Opticon Optimizely search relevant customers AgentForce of project precise partners will and was top app Texas AI to to -- This HawkSearch HawkSearch's with already recognized is app Optimizely showcased uniquely XXXX for all store. tens Configured BigCommerce are upgrade other site providers San of in providing search technology. on ability app as one-click first positioned HawkSearch promoting several is in last licenses. is of Optimizely improve a Optimizely now HawkSearch initiative, to collaboration with with new ahead announced than to the customers Search. expect purchasing their offers and HawkSearch BigCommerce. Search integrating Agentic-AI AI & more of improve faster HawkSearch integration the just store, Keywords Unified X,XXX seamless paid Search, Bridgeline's known integration Antonio, delivering search intelligent BigCommerce the automation to for experiences to generate at and Concept its

HawkSearch system integrator of and discovery allows Optimizely will stronger leading enhances Xngage from the integration connector, expert named retention. supplies an to personalized This to the we capabilities. which and the the market Moblico's HawkSearch a real-time even increased a fasteners a This and engagement power to Xngage capabilities use announced the position. customer product for We mobile increasing Optimizely experience, have Moblico distributors, industrial distributor, for selected Partner platform. Furthermore, customer quarter, more the their revenue collaboration also their XConnect with partner AI leads of In HawkSearch optimizing Optimizely the sales. was partnered on-site first for Year. leading on shopping and to our lead that Xngage, HawkSearch's of provide experiences enhance to distributor distributors connector

especially a and Genius with fastener with Commerce of product AI-powered Element, those enhance We access platform drive in HawkSearch Magento, search. include the technology with with will patented a and BXC BigCommerce will to partnered in its to catalogs, we partnership Human industry, HawkSearch leading and provide complex offerings search, experience search users for partner merchants engagement has display the sales Shopify expand industry. Bridgeline and easy services agency, search solutions leading technology AI-powered Adobe simplifying commerce who HawkSearch where to and Product gives partnered fastener and customer to BXB innovative partner the provider by decades sort of the also of Technology, with previously

this XXXX. At in I'd leadership time, our turn Our great AI to in a Officer, and sales Tom? given for record pipeline resulted Financial over call Chief Tom has like us Windhausen. to a the

Thomas Windhausen

Thanks, September Ari. financial XXXX, compared ended of quarter fiscal quarter in ended update year to for $X.X revenue the I'll results prior XXXX. Total XX, provide for the our million million the XX, an September was $X.X XXXX, fourth period. of which

revenue, licenses, which subscription component for our the ended million license hosting and $X.X Going of compared period. each XX, in revenue, year revenue was of maintenance comprised XXXX, $X.X into the September prior SaaS is million to quarter

for As XX, fourth quarter from subscription was ended the ended was license year in quarter. $XXX,XXX September total $XXX,XXX XXXX. Services increase the an total XXXX, September a the percentage of XX, revenue of revenue, XX% revenue prior revenue for quarter

September revenue total of ended percentage revenue, for for a of total revenue the XXXX. quarter As accounted XX% XX, services

XX, Our with compared our cost the $X.X the $X.X to And year million remaining for million XX, million in year for $X.X prior quarter quarter XXXX, $X.X of the period. profit the September XXXX, consistent as result, prior in gross was September revenue ended was period. as ended a million

XX% overall for compared in gross period. the XX% ended margin XX, quarter prior September Our was to year XXXX, the

the gross XX, for XX, license XX% for quarter to ended XXXX, in prior same September subscription period services Our were to the ended XX% gross XXXX, margins compared the XX% XX% quarter compared September margins and in our year period, XXXX. were the for

expenses. to operating Moving

ended quarter year prior $XX.X September period goodwill the operating period. were The XXXX, impairment million charge. a $X.X compared million million to expenses prior year $X.X included XX, Our the expenses operating for in

ended liability of noncash to below period. And loss in a classified Moving $X,XXX XX, compared ended our our $X.X the year was of -- OpEx, in in net value the was XXXX, quarter gain quarter XXXX, prior goodwill the period. GAAP for period, year for which September included in the prior the warrants of loss for EBITDA the a to noncash a compared XX, compared September change year million $X.X impact year loss our to adjusted for million the resulted the $XXX,XXX million $X.X impairment. of a negative of of prior EBITDA net $X,XXX fiscal $XXX,XXX fair comparable

of June September Moving September At And million, XXXX, XXXX, receivable to $X.X balance $X.X XX, $XXX,XXX our sheet. cash at XXXX. our a had XX, was we XX, accounts increase from million.

Our XXX,XXX. The was total XXXX, September principal XXX,XXX X.X% approximately weighted rate was average through approximately EUR interest XXXX. of XX, outstanding as debt USD due or payments with

other of our And total previous as $X.X no have We total XX, our and acquisitions. debt from remaining were XXXX, $XX.X any earn-outs assets September million. were million liabilities or

exercise with of consist nearly At a to which customer revenue and looks an cap warrants XX, $X.XX success and like fiscal outstanding call growth warrants exercise the call preferred open price, time, XXXX, Series C expire whose table and shares XXX,XXX Operator? beyond give growth, $X and our million And XXX,XXX exercise on in XXXX. Bridgeline to XXX,XXX our which to today. innovation, a shares, expire September this XXXX continue in our Finally, and update XXXX May primarily for warrants $X.XX In to I'd warrants included success November answers. a September XXXX, in joining the The was cap questions price price, and focus shareholder from product value. Thank table. with us delivering as on options. on continued warrants expired. X.X XXX,XXX stock, we forward XX,XXX you XX.X remaining XXX,XXX at million

Operator

from of Brothers. comes Howard Halpern line Taglich question of first Our Instructions] [Operator the

Howard Halpern

into to of HawkSearch? finishing and note with If guess huge in customer strong partnerships runway potentially tap place, quarter could on some give the the now that agencies the a would are Congratulations couple for where next years. Is for base? really and for the beginning over it on you're different just on color a such, I you up you year. the imagine all you

Roger Kahn

Yes. Right.

that is Most HawkSearch revenue. we a we our hewlettpackard.com A So the I that partner-driven. of differentiate of think -- half on strongly of is BXC are And side. sales enterprise. lot the although have BXB example of HawkSearch most great -- well the BXB, over is is revenue I

Gartner BigCommerce and We area, growth we Optimizely seeing nearly to volume contracts recognition leadership size a made revenue. continued and like of partners there. like the the acceleration doubled year-over-year to going in from we're to recurring contract analysts to So nearly continue of of of the big growth. see that our is well in of sales AI that going doubled in each start the we've all investments lot the in The happen thing in because annual expect terms intelligence terms of as value that's monthly and like and artificial and our

in dollars ways growth is less So marketing than overall months that's more into lead and we the XX seeing return We going on and continue. The because is payback. sales with we're investment biggest that to marketing have challenge generation on budget. to need that CAC find put side the more to outstanding

we're that's into ability really our more dollars world-class, that limited primarily just and funnel. I to by think inject

Howard Halpern

that HawkSearch customers? you're the some big are let me being customers' I and for by correctly try there are this customers sort measurable to that your seeing HawkSearch? you are And seeing increased when customers' of one benefits phrase your there that Okay. Is websites satisfaction leaders, of they go out guess, powered to, your with, --

Roger Kahn

we We are, are.

all revenue. our strategy they carefully So and meaningful monitoring specifically a is the that focus big is part part It's our of cycle are than the of better one for are strategy own and driving we metric their them. very are rates on our to That's most customers' can it seeing when improvement. their fastest conversion significantly. that we demonstrate because doubling are also value in customers order And also average increasing sales results

They're make been about in requiring telephonic us fax, really are at us online things manufacturing. that is One right value. demonstrate in great space of they a especially of investment, next that now of That technical the a the products hard willing in a space space look all us lot embracing has BXB to turnover purchases that And still because they're to opposed platforms. laggard. search BXB They're that the or generation which for as happens competitors. now is the and that terms taking to realizing with comparing there's world,

So subscribers are and report, we're to increasing promoting and winning we're significantly. particular, revenue our return on a that the reading And lot the seeing us of manufacturers is that Gartner, in distributors and Gartner investment. the

Howard Halpern

it and a it's big is Okay. your out it. as release I still and know important but on not release tool And press there just had WooRank one the one I HawkSearch, because future? to you see did press last as in beneficial

Roger Kahn

is with Well, very now. WooRank tightly integrated HawkSearch

actually an that you HawkSearch the and the a is able WooRank HawkSearch, powering consolidated HawkSearch make the is when we to interface becomes to for automatically add-on where sales, sale. WooRank So HawkSearch see pages and license generate powering landing is

but often they sale to item were if of that as the actually WooRank, to item So technologies HawkSearch of than the we're about license inside deals, have is were WooRank all line HawkSearch. that, you talking you inside that line certainly, significantly itself. It's if smaller other are part

However, allowing Facets single into as products allows a and opposed suite Smart a being we a of carte Conversational model is WooRank, broken get with product, us Response, forth. This reduce la into Smart cycle. way so and Smart with to us strategically them customers our sales HawkSearch really upsell with that to along Search, to have quickly the Search,

sales the CAC payback closing deal. now in receive winning and is from through XXX lower. a much an cycle losing And e-mail first and we stage which whole or Our point is cycle and marketing the the sales the days then

our is own and spend. reduces marketing strategy, part our selling overall customer So base of it into our

Howard Halpern

just And productivity, AI very sales for own customers, last force try the or your Okay. search part their have but own your of I internally to capabilities? because it's customers, know to it you seen their Are AI you is help their -- powered one one them you important. and use seen it search have

Roger Kahn

but not That's Yes. case, our have do we primary use that.

manage review company when PDF as drugs order a in file. is using a even within information through internal HawkSearch have, deeply pharmaceutical going about find example, different embedded to documents that an processes it's and are We scanned that

is that that hospital a searched HawkSearch. information patient have We has through

So our a is on have direct impact a from we we target have line top do marketing perspective where But those. revenue.

search So that's focused. although not we're our can that, where do

Operator

Our [Operator Per Instructions] of Jacobson from [ line next question comes the ].

Unknown Analyst

sorry? this cut that, terrific. line Well, cash repeat me? A on giving couple thank has Is Tom, I'm out as was of number. The you. usual, Can Tom when please? questions. you This been the hand

Thomas Windhausen

absolutely. and $X.X that At on September from cash $XXX,XXX of was we XX, XX, approximately June Yes, at hand million, $X.X increase million. so that had

Unknown Analyst

that, will to comfortable take us foreseeable are And future, we that the right?

Thomas Windhausen

Correct.

Unknown Analyst

Can I And on out Okay. some foreseeable does over the backlog? to that mean, period? it the we how play color get what like? is look going

Roger Kahn

You're contracts? those the referring contracts revenue of forward-going in from signed terms to backlog and

Unknown Analyst

about backlog, Actually, I was What I opportunity guess. No. talking [indiscernible]. we have Yes.

Roger Kahn

regularly value. us. qualified So 'XX. that with opportunity the that nearly shared prospective That's more has pipeline sales on They started forth they've that are ended backlog, budget, leads, than sales And FY back the opportunities we includes XXX so annual $X.X we what million fiscal double needs. in 'XX and communicating shared with contract which customer means are the from

that kicking those BXB or and manufacturing of how kind And customers X, million They're we're of are distribution. customers can in total contract customers. in value. prospective year by off. Most multiply $XX approximately you the So that's

the a in ours pretty is space currently before. -- than of and electrical fact, XX in customers, some are pipeline all pretty top We big larger are customers X strong thought distribution the extremely space. would and of And referenceable distributors, are distributors in in I which names electrical that has have plumbing is electrical

dominate So continue that we're space. expecting to to

Unknown Analyst

XXX that measure that, the qualified of that, or over expect that leads you will whatever do sort be go up you Do time? that dip will going the number Or or forward? expect

Roger Kahn

up. go It Right. will

or marketing. lose at coming leads come faster call in focused them, of rate. pipeline, we leads of funnel very as And new on top we out because our much have either win So we're what them a we

investments So first to ICP have allow right of and some seeing in more because create stages just We're terms few close a we're a us now automated ideal automated able making people. good profile, that rate. will targeted outreach the being touch this customer nurturing to to more for

get touches. want So we few after to involved just we'll the expand our then that and first humans

So that ARR the of our Optimizely, in we'll that we're $XXX even if platforms, not BigCommerce, sales. has total has in result market, X sales, look partners, Those million and you partners. in just of have that's $XX $XX X surface. at million million terms addressable ARR. And million really ARR which grow continue in And the to scratching pipeline. But overall X in would $XXX plus their those we biggest XX% which could and in

we Of Salesforce, with selling how leads increase generate part we're and Magento. our at ecosystems low with for our expenses of close build to a inside Adobe of a references and of funnel, top of those course, lots rate. And selling the keep marketing reputation help own the we're staying is lot

Unknown Analyst

right? what engage this them is So sort we almost at prospects, of that when when situation, I is and win a rate all engage, competitive with point? these of we assume And our

Roger Kahn

Right.

qualified budget, XX%, call our mentality a from So to want and so that's more speak. into from X-X pushing having that we're feel too there what want and so at-bats, itself And leads need sales seeing that inquiries deal, on leads high. almost have they've every that's because a a I close single to really win like in is where we're had customer rate but lots of close inbound have the driving to lots actually I we mean, many I funnel I and multiple and those. rate we lead, of stated

every ton the we into we've money, the lead So a very money. don't close got does have a of the and more strong top funnel. And need is cost of reality We leads rate.

to to and without more find to to invest partner generate low-hanging more other more be don't have. buy funnel that those to also to able work ways money need generate ecosystems feed but to we having money leads, we through leads, that good So fruit

Unknown Analyst

That's sales sense And are now terrific. direct -- and sort of sort can a are a you many that. general don't by some of breakdown the many how what's floating coming just partnership? direction there? measure, appreciate I the What's give the I of the how really of through know, of sort

Roger Kahn

Yes.

of itself, So from the actually partner providing in terms the XX%. with us partner flowing the contact, about that's

X/X us. at last providing So or our conference result directly deals we the that or a to of San them are in Opticon a us conference like maybe October of customer being actually was were it month Antonio it at

The have our of as part a website But from that from attached XX% them one other of -- them partner partners' XX% our their of our is to platforms itself customers always happening through because hawksearch.com. all a of need website. lot come

seeing create, also is we're things we're lists really come investing, that. and case to name we're of including videos invites leads data and as So just PDFs we brand there. that like in where buying webinars, a Hawk outreach, through YouTube And studies and having

Unknown Analyst

think like really into here. And it's HawkSearch looks great I it's the XX I XX experiment think months are Look, to -- we it AI going well.

perspective? have ideas the the capital, any that look I relative from not and it if results it's is at what about do bit of a market's you company mean, you Because the market, healthy to just it's valuation the liked mystery. a right? the -- of equals course, company is So potential,

Roger Kahn

dilutive had right thing Yes. think with the be the course. has But If if different Of stock a exactly. a not history capital stock be the to price, I would -- that injecting today's Yes, have hesitating do. sales to stock. our stock price, funnel. to not I promote feed would And and poor we we

is and our and that, overall may our also XXXX created only revenue. We're a probably other for warrants bunch in and capital But structural challenge things size that stock a -- a raise overall million that as think $XX shorting well, have I produced has company. that problems. a of just back

in been we've doing a leader AI of and ton long for innovation. the are We've We search. a product added time, AI

multiple, it's rectify have a confident more I'm because We there company word lot trading where this a and out to it's that but at is that worth get today. great than the buy

Unknown Analyst

Yes. I agree. I mean, obviously,

Roger Kahn

you're in. too. Me Yes, So.

Unknown Analyst

Or can me, what you those? Tom, strike the the expiry thing? of is remaining what's warrants, on tell that dates price of the

Thomas Windhausen

Yes.

XXX,XXX May remaining, of 'XX XXX,XXX XXX,XXX, $X.XX in $X.XX a exercise those expiring expiring have there's So price and 'XX. November

So $X.XX, those between November between 'XX XXX,XXX of and and May and $X.XX 'XX.

Unknown Analyst

Okay.

So to these realistically -- I are going trickle for sure. mean,

Okay. really year. the have they happy I want appreciate what really everybody it. thank I for to has it. I And over All right. last done again, impressive It appreciate been to watch. holidays.

Roger Kahn

[ Happy support. holidays. appreciate you, Really Thank your Per ].

Operator

turn to conference Thank now like you. for I to would back the management closing remarks.

Roger Kahn

Great.

time. tangible AI. value it's for happy things customers, course, well, have a We very about we're fiscal XXXX. our that you everything this of I We're doing and again most really my Okay. the our happy for for I we're holidays. be are I've and conference 'XX Perfect. business, look of of life and our our exciting custom-built excited support adding February to AI. Well, this, of then, stuff. our with customers today. partners on We appreciate with speaking real, continued I'm be us it call, all of living mean first everybody, holidays. getting quarter Thank in Until of which in and will forward been joining you with for shareholders. PhD

Operator

you call. conference today's for concludes participating. This Thank

disconnect. now may You

Bridgeline Digital (BLIN) 23 Dec 242024 Q4 Earnings call transcript