BLIN - Earnings call transcript Q1 2025 | Bridgeline Digital, Inc.

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Operator

Good day, everyone, and welcome to the Bridgeline Digital First Quarter 2025 Earnings Call. [Operator Instructions].

It is now my pleasure to turn the floor over to your host, Thomas Windhausen, Sir, the floor is yours.

Thomas Windhausen

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

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

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

time on about information to review business, please filed Bridgeline impact Securities and reports our these risks Digital detailed Commission. an Exchange from the more and factors time documents by with may the other have that and For

a afternoon, this to non-GAAP non-GAAP on commenting GAAP please company's measures the when the Also, we of call on measures earnings financial provide some financials will that release. note reconciliation We our discuss our performance. in these financial

copy can our visiting You of release a by website. the earnings obtain

to now over and to President Ari? CEO. Kahn, the Ari Bridgeline's like I'd call turn

Roger Kahn

Tom. QX Bridgeline XX licensed In of in Good in value. afternoon, million you, contract adding contracts Thank $X.X everyone. 'XX, and signed FY sales, new annual $XXX,XXX

time is only XX% now cycle is The win world-class days leads, market sales. in outperform sales an competition. our qualified hot, Our it's rate our with to XXX numbers. This on invest means products

that it away, customers. released year, in paid support are products competition invested R&D, AI-based value analyst blowing has garnering key Last the we off. our X strong delivering and and We to

leader the AI-powered search. in are e-commerce We

by marketing competition. not growth budget, Our customer is our only market not by by demand, not size, limited by

it's reallocate resources time marketing, and the Now R&D to to is to go on from time all in sales growth.

than are can HawkSearch growth, into of million broken including revenue from all new better X Core XX its This $X.X product be groups. net core comes broadly with embedding, XXX months. XXX%, cash products our Our and [indiscernible]. is Essentially, products. of double-digit retention e-commerce revenue payback sales revenue revenue our

whose expert, network expand additional go opportunities. and to business a These way minimal more expertise core. Our changes With we've into of to Bridgeline care helped sales all and the Board AI will most made and strong and the in and including into veteran include leading services, adopt of market these the noncore represent in they products, professional margins gross growth in of products marketing bold our products shifting [indiscernible], seize Michael company-wide position health changes level, to these markets. the development fund that our AI balance with generate expenses our invest revenue, momentum the addition operating and help sales, and industry

I recently growth the our my on mindset have That's exactly out acronym, fear driving missing strategy. mind. of FOMO, the

market the shifting the moment expand we're seizing With base. to fast, our customer

Our I'm investing to in to new we Board wins that stay customer ahead. growth and committed ensure full in mode, team and are

take a second XX company's at quarter Let's the adding for sold look million best QX total licenses sales ARR. We contract value, history. sales, the in $X.X in in $XXX,XXX

leading major janitorial and integrated customers. of HawkSearch restoration Here's a is to deliver our industry and experience. search has and functionality product improve site more few a HawkSearch navigation. leveraging provider seamless new its optimized supplier a [indiscernible], in BXB to AI digital also enhance discovery e-commerce [indiscernible],

of that to leading that SmartSearch search enhance search their discovery experience power will experience. shows features it's using HawkSearch Alliance users. product Parts chosen has more plumbing its search across supplier HawkSearch, industry for power The Leading visual experience to concept catalog. Aftermarket [indiscernible] to and -- to search drive efficient product intuitive stream is extensive health Auto plumbing HawkSearch smart growth. Health leverage and supplier System and customer

Another successfully health for expand sales not search solutions revenue positions care, drive major as and the engagement. providing in us for in XXXX HawkSearch of momentum HawkSearch. this who Fortune consumer million customer mention subscription continued in online XXX we all customer, our electronic reach This powering BXB its hour e-commerce that cutting-edge an in supplier is search, industry to $X a online launched power growth expanded plumbing to over enhance and AI

in need have AI-powered whose investments customers opened door the partners e-commerce XXXX the to tools. latest R&D Our

just commerce will and thanks us cost suite. line The online customers We Catalyst stores give will tool seamlessly to issued week. soon. bring be HawkSearch customers, lead sides. joint product per events partners our Catalysts marketing connector release our e-commerce for to both drag-and-drop their the upgrade lowering announcement expanded this Our to a our press released big

of been our to to catalyst the expect upgrade for has easier release even their E-commerce it one HawkSearch. we strongest make and partners our customers

of HawkSearch HawkSearch. listed Many close app [indiscernible] our of manufacturing on customers also oral the joined commerce has AI-driven engagement optimized this the mobile to earned and on Partner in manufacturers with quarter, leading to to Moblico's and continues commerce, and tool quickly for store. this us BXB be distributors. sales bring Optimizely HawkSearch large Award Year distributor [indiscernible] partners a and who platform BXB Bridgeline leading forces is bring search for ecosystem. the that In advanced merchandising are distributors.

instantly in the commerce. improvement partnership from product for now launched see Importantly, access in deploy BXB AI-powered with customers HawkSearch HawkSearch e-commerce the has the performance. also Salesforce can immediate HawkSearch Salesforce, discovery directly engine connector and AppExchange, Salesforce

an the in we're important conferences part and be attending industry, won budget. we by expanding and on but our strategy year, Vegas. greatly this specific the Expo verticals years several industry will associations. Fair also Partnerships Franchise In focusing We've conferences marketing our International of and [indiscernible] joining notable sales in by like recent go-to-market faster customers generated

sales. BXB online electronics shift BXB Chicago distribution and generating such plumbing as modern distributors have strong with and management been conferences

We targeting events and we'll more generate have year. leads expanded and markets convert our even this new budget, hosting customers including more into verticals, BXB in-person be vertical advertising to and and

call a marketing innovation suite competitive that reallocated we is This was us Windhausen. This and over strong transformative year our on in launched. it. from our can that market growth be X so Tom? turn Thomas our products in to AI capitalize has sales R&D being budget with to position time, year Last and with efforts going placed the the to CFO, demand our on with transformative product I'll year

Thomas Windhausen

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

Going was X% into of revenue, the $X.X $X our for million, down December each revenue from year of million is hosting maintenance in XXXX, subscription license comprised licenses, revenue, and ended prior period. XX, sales quarter the component which

quarter of a of for license As ended revenue revenue XX% was subscription December revenue, XXXX. and percentage total XX, the total

revenue the XXXX, from ended first prior quarter rounded $XXX,XXX was as Services $XXX,XXX quarter. the for up year XX% December in of XX,

XX% services December for Cost And of the a ended ended million $X.X the percentage XXXX, a total revenue revenue in XXXX. was million year revenue total accounted from for for XX, $X.X increase a prior to prior compared year profit rounded period. XX% for quarter quarter Overall, of the December of an XX, million As as the gross XX% for was prior XXXX, the million from December XX, margin in ended in period. period. December result, $X.X down year XXXX, was profit the XX, quarter ended X% $X.X the gross revenue, quarter

the for in the quarter period, same margins the X%. quarter was gross to in Services license an XXXX, compared prior XXXX, ended compared to ended XX% of increase And December December gross XX% margin XX, XX% period. were XX% subscription for year XX, the

the down period. prior quarter the ended were to expenses Operating million $X.X in December X% XXXX, compared $X.X million XX, for year

noncash Going a resulted the fair classified period. our loss compared of prior below in noncash to $XXX,XXX, $XX,XXX liability of in a the OpEx, warrants gain year change value of in

the to prior compared in XXXX, line, year comparable to prior period. December bottom quarter Adjusted million loss for XX, was was a our net negative $XXX,XXX the quarter $X.X XXXX, for in $XXX,XXX to the loss December $X.X the ended of period. year ended million negative the Moving net compared EBITDA XX,

company Moving on receivable XX, to million At balance had and sheet. of cash XXXX, the million. of our December $X.X $X.X accounts

have year And were we X.X% any The earnouts interest and as $XX.X approximately our XX, debt rate that remaining previous XXX,XXX total December average outstanding assets million of our other of is ] were XX, through acquisitions. and at And million. approximately December XXXX, of under liabilities payments with due the XXXX. debt total no $X total was or debt Our [ XXX,XXX. EUR from USD weighted 'XX,

as C XXXX, on our Finally, warrants [indiscernible] stock on cap basis, outstanding options. I'll XX, update an included XXX,XXX of as-converted and of December X.X XX.X shares, million Series million which an table, preferred give

at of and exercise in warrants of nearly primarily warrants November remaining As The $X price September XXXX. in consist a with expiring exercise in XXX,XXX XXX,XXX 'XX exercise expired. warrants May expiring warrants price reminder, 'XX, price $X.XX an $X.XX XXX,XXX or XXX,XXX

growth, success beyond success Bridgeline shareholder value. on and continued fiscal in growth continue delivering looks innovation, XXXX and customer to as focus our forward and revenue product

joining on for Moderator? open call you time, today. I'd Thank this to to like the at us call and questions And answers. the

Operator

is Capital. Ryan [Operator coming Instructions] first from Westpark from Casey question Your

Casey Ryan

the sounds success HawkSearch. It the point hitting an what in with we're quarter. you're with Nice and inflection seeing market like

around questions of couple that. a have I So

I all, of think then plus called the kind from and HawkSearch what product core of calling was you're $XXX,XXX. were million $X.X services the about quarter, out [indiscernible] in First you

and Or is higher? hold to be going services long we that continue sort consistent would if the be million what that [indiscernible] that looks $X.X Is sort it or core is. sale are sort will that that like software taking that X/X of a So ratio services of like is core of out so was sales of not higher, HawkSearch term? revenue to

Roger Kahn

different bring It bit adds going it to for you. down up actually have a little Tom that. than I'm

Thomas Windhausen

right, The services services, quarter. we all I for core. think those of comments, $XXX,XXX Ari's are had in not And the

said. you I in So mentioned think what that you

Roger Kahn

$X.X we're like subscription and payback whatever we bit That's -- is out and subscription. the our when growing retention That's the is revenue better subscription And more detail, that, of So north for million that revenue got XX% both $XXX revenue That's than what of company, the noncore. of of is go math is XX% rest to services and got declaring, -- revenue in lines. months. core by for XX that's into a core core our product revenue [indiscernible] Then comes right the little About and services, be. the double so net XX% I services digit. is

Casey Ryan

it. Got

Okay.

Roger Kahn

is clarity everybody kind year, double-digit from This better core. growth been we're on the declining core. of the see knocking has declining coming we're noncore to in in that for historically growth so growth And seeing that providing FY out that can the we 'XX, that the reality and breakthrough

Casey Ryan

From core. Right.

Okay.

of is of frame way This helpful sort Good. a sort to Okay. it.

or me so see strong. sounds guess, what rate a core [indiscernible], maybe -- bit or sort of sort me like rate about talk in I the very revenues like, rate about faster products, a the about the maybe But sales. pipeline? at little So a of qualitatively from the you the how for tell run you that's tell It like is -- than expanding see it's what possible seen talk we if had XX% faster if about

Roger Kahn

me right Perfect. thing excited now. got that's Yes, that's the super

represented to to we've so -- that are than very are. a the like plumbing technology per coming as verticals from before efficient, our very the had going got conferences, like to strong a narrow are coming conferences verticals -- at customer we basis, costs conferences by face-to-face higher rate -- so payback, we've fasteners these and [indiscernible] leads industry dollar customers that things ever qualitatively, where and acquisition on that's we've and a got So in are CAC

we're the on those, We're to tells And that an a wind leave that sales very what immediately in be rate us meaning qualified a what that is just then us goes not advantage we've in qualified for we far, a not I a contacted going And them products, lead that's is right is, that the with us. indication form forever. make an It's e-mail of or that me who it. Xx has XX% the market, of here given but high out just conversion That's budget lead, of they're who goes person And filling all that decision. seeing us Go call e-mail, is, and that we us. which landing a on person and sending right out of indication sending will far got because [indiscernible], someone page, go, measurement, calling comment. go go has a kind not their marketing and win bar, take of to what that, my an FOMO objective need down. an the and ultimate us an and us to that is

Casey Ryan

I win that sense makes that it considering sort of perspective. lead low right, XX% that of rate. like bar yes, qualified Yes. Well, that to And perfect we listen, expand as the possible, should as measuring rapidly especially took notice

So exciting. very that's

HawkSearch self-service own? is, thing way? Or pipeline, about touch sort lead is there's I maybe through It can to And some some where possible of it people can people do that guess, the enable customer from always one you sounds on them go in there entirely. -- functionality like of have their so sort to

Roger Kahn

AppExchange directly digital the commerce Connector conversations. Well, involved Salesforce go works. connector, the broader people And typically a is that on big their catalyst it own. we a have There's or connectors, that's their the integrator systems so that's how with our could But reality and have not managing who's salespeople agency do website.

So time cycle from lead, average. their system before first buying either is from all sales way that or X to the hit the but very our or us, qualified way way [indiscernible] they XXX buying the the other, closing on not days

executives, initial are are working call that development BDRs, team reps, BDEs, currently to contact development the sales deal, the is our X who what plus sales running our And we salespeople business are those inside making outside plus actually the business manager. That's team.

sales many team have all also success customers so yet. our We customer them because we've products, our own released of

have team our that selling is existing to we X-person So also customers. a

sales the that's org. So

side, graphics and marketing then coordinator Marketing, working [indiscernible] a an got of the half a event On an VP time. we've consultant person,

to right the marketing. first So team now that by doing the is itself for to place us That not expand.

run night more to guys Our go because with just on first every us stay we'll going they're people all after is everybody night, and up their into them we and of then that still place we're choking keep to them, commissions. make many so working team, adding on more those for are that conferences [indiscernible] that expand more deals

Casey Ryan

quarter, in -- Right. sort Got I guess, Got you formal offer comfort saying you guidance your it. days, have of it. looking a of around XXX of didn't -- right, sort sort so is gotten at around and guys pipeline, revenue, which a any but Well it's roughly.

feel [indiscernible] come that understand So we confidence, have ? you If things revenues out if built even sort model have you some say of you where where in. the continue internal okay, numbers will say, are a guys you you

Roger Kahn

on we've But have why core renewal doing customers. which of our We've our one pretty X noncore, side, halves. a good into broken volatility on not It's so we we're and -- noncore. our there's that's the reasons guidance. is we the Yes, of our and company confidence do revenue got got existing

know of as forecastable. we into and not. that whether noncore sell well, that's are them products So know all we to core pretty highly forecast we redoing or those but they're because do also easy group And

part new logos, it's but quarter. core you the On of that's as left winning that's very X days, mentioned, is that's forecastable, XXX the long, not which side

like that So X deals that's sell minute. used than to more model when these in to selling good the visibility. last I Well, old find I that the really days quarter out

do missing we financial the something have that's have internally room of that. So sense and for a a And side. on run good shoestring we for lot budget, important don't because on a we

Casey Ryan

Right.

Okay.

look, And it excited moving a we to like it go as to shift real and positive. see I very Well, in Okay. we're get it's Terrific. where think tone yes, sounds 'XX. we here,

the time for thanks great So again. quarter a and

Operator

next Brothers. coming from Your . is Taglich Instructions] question from Howard [Operator Halpern

Howard Halpern

on Congratulations going. wins. customer Keep the the quarter it and

in incremental and and from research overall only operating So terms marketing of to increase we're going expenses? the overall shift development see to expenses, and sales operating an maybe in

Roger Kahn

That's right.

So or -- that now tight ship so job, we're really But G&A a running personnel lot going people investing did stuff, time it operating we're year, X hold less consultants be of pretty released to X where marketing it's and they're at. so the a instead, shifting side already we'll build. to killed in altogether. it a just they on with more forth more what sell is and and And last and R&D great expenses

Howard Halpern

Okay.

or partnership verticals? Can talk within you about the sectors new potentially opportunities Okay. verticals and maybe opportunity new new

Roger Kahn

Yes. Yes.

So for new sales on and that's us. channel partnership relatively side, the an important

buy seamlessly to We've e-commerce these Optimizely, allow what typically they include and and partners. will we types call and we already ISVs, that with because have customers and them, platforms. partners You management built They integrate lot takes connectors e-commerce, us have we and platforms, Magento, content money have takes slows got Salesforce, X of these which are their a us. from a time and for our their their They're can software and have of put deals website, important marketplaces down. customers lot can where of us

now it's matter whatever website search. their default with HawkSearch a with So of capabilities search enhancing our just AI-powered were their

systems category digital The is also the of integrator. the partner called second agency,

site. online teams are the launched the but in that have actually that relationship selection continually site, the do update that are and these initial an an -- site, to So e-commerce they the then end influential they with ongoing implement very are of their implementation technologies on of store

American local integrators/digital will they like system that of with. HawkSearch a So market partner and agencies we XX-person companies [indiscernible] lot recommend there's Gorilla they're Eagle, like

So half that's channel. of the

And systems integrators deal. and are every But half channel, have their we a customer invite progress progress are basically then conferences. ISVs but with of the partner seeing and direct marketing. own the this in of a well. finding involved then is them where is human our other vertical physical as customers we And have conference, lot where We're we bring

cross-sales then of with the leads. bases. and virtual lot So becomes a X bring that with we, a customer online across AdWords joint conference do in of lot a Google conferences it marketing course, customer and of And even webinars

Howard Halpern

Okay.

the current the and add be mix? the verticals and then them then on just that migrate you're in new So emphasis to potential really, slowly going to is of vertical sort into

Roger Kahn

to to When they another in someone day-to-day and might the familiarity because technology and specific live type in we're our working site a basis their and critical analogous when with implemented is the see we how world, The one exactly the for of analogies return we one. needs meaning Bridgeline, who between see plumbing what necessarily implement have we can in have an a great vertical with a world on on might what reality generalize expert software be don't is mass that and hospital we are. right, how investment create customers. That's Howard, referenceable a we, although narrow reach

We've So mass. difference references make after of a really then customers, plumbing we we world. the in got specific websites won the all couple example, customer hit the specific the critical and that

Howard Halpern

days that's verticals? those start coming actually core -- that the feel you why down some could Okay. in XXX And of

Roger Kahn

we example core to because the we case the partners on partner accelerated sales to customer the In the working right. closely and That's thanks due cycle, relationship studies, our XXX relationship. are faster an comes joint gets websites. with verticals, those references down just conferences, Also, when see instance, for the the

Howard Halpern

great Keep guys. Okay. up the work

Operator

now no hand for closing go further queue. There will management the the remarks. questions are to conference in I back Please ahead.

Roger Kahn

today. to Until our XXXX. about We in We're us the shareholders. joining our the excited the with quarter then, in for forward growth appreciate speaking be again partners, our It XXXX our fiscal will be you customers, obviously support call. you thank conference We continued prospects. of Everybody, second well. ongoing business May very and look

Operator

everyone. Thank concludes you, today's This event.

your You and time, may participation. Thank disconnect wonderful day. at you a this for have

Bridgeline Digital (BLIN) 13 Feb 252025 Q1 Earnings call transcript