• Total Revenue: $3.9 million for the quarter ended September 30, 2024, compared to $3.8 million in the prior year period.
• Subscription License Revenue: $3.0 million for the quarter, compared to $3.1 million in the prior year period.
• Services Revenue: $800,000 for the quarter, up from $700,000 in the prior year fourth quarter.
• Cost of Revenue: $1.2 million, consistent with the prior year period.
• Gross Profit: $2.7 million for the quarter, compared to $2.6 million in the prior year period.
• Overall Gross Margin: 69% for the quarter, compared to 68% in the prior year period.
• Operating Expenses: $3.1 million for the quarter, compared to $10.8 million in the prior year period (including a $7.5 million goodwill impairment charge).
• GAAP Net Loss: $0.4 million for the fiscal year ended September 30, 2024, compared to a net loss of $8.1 million in the prior year period.
• Adjusted EBITDA: $5,000 for the quarter, compared to negative $192,000 in the prior year comparable period.
• Cash: $1.4 million as of September 30, 2024, a $200,000 increase from June 30, 2024.
• Accounts Receivable: $1.3 million as of September 30, 2024.
• Total Debt Outstanding: Approximately $526,000 as of September 30, 2024.
• Total Assets: $15.6 million as of September 30, 2024.
• Total Liabilities: $5.6 million as of September 30, 2024.
• Outstanding Shares: 10.4 million as of September 30, 2024.

• Warning! GuruFocus has detected 6 Warning Signs with BLIN.

Release Date: December 23, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• HawkSearch has become the majority of Bridgeline Digital Inc (NASDAQ:BLIN)'s business, powering over 1,000 websites and recognized by Gartner as a leading B2B product discovery platform.
• Net revenue retention for HawkSearch is 103%, indicating strong customer retention and expansion.
• Fiscal year 2024 sales contracts nearly doubled in annual contract value compared to FY23, totaling $2.1 million in ARR.
• Bridgeline Digital Inc (NASDAQ:BLIN) released five new AI-powered products for HawkSearch, enhancing product discovery and customer engagement.
• The company has a strong partnership network, including BigCommerce and Optimizely, which promotes HawkSearch and contributes to sales growth.

Negative Points

• Total revenue for the quarter was relatively flat at $3.9 million compared to $3.8 million in the prior year period.
• Subscription and licenses gross margins slightly decreased from 73% to 72% year-over-year.
• The company faces challenges in increasing its sales and marketing budget to further drive lead generation.
• Bridgeline Digital Inc (NASDAQ:BLIN) has a limited cash reserve of $1.4 million, which may constrain future growth initiatives.
• The company's stock price and market valuation do not reflect its operational performance, potentially due to historical financial challenges and structural issues.

Q & A Highlights

Q: With all the partnerships in place, where do you see HawkSearch on its growth runway? Are you just beginning to tap into a potentially huge customer base? A: HawkSearch is a significant part of our revenue, driven largely by partnerships, especially in the B2B sector. We expect continued growth due to our investments in AI and recognition from analysts and partners. Our sales volume nearly doubled year-over-year, and we aim to increase our sales and marketing budget to further capitalize on this growth.

Q: Are customers seeing increased satisfaction with HawkSearch, and is there a measurable benefit for them? A: Yes, customers are seeing significant improvements, such as doubling their conversion rates and increasing average order values. Our focus is on driving customer revenue, which leads to faster sales cycles. Our strong performance in the B2B space, particularly in manufacturing and distribution, is supported by endorsements from Gartner.

Q: Is WooRank still an important tool for Bridgeline, and how does it integrate with HawkSearch? A: WooRank is tightly integrated with HawkSearch, often powering interfaces and landing pages. It is part of the HawkSearch suite, allowing us to upsell additional features like Smart Search and Smart Response. This integration helps reduce our sales cycle and marketing spend.

Q: Have customers used HawkSearch's AI capabilities internally to enhance their own productivity? A: While not our primary focus, some customers use HawkSearch internally, such as a pharmaceutical company managing drug review documents and a hospital searching patient information. However, our main target is impacting top-line revenue for customers.

Q: Can you provide an update on the cash on hand and its sufficiency for future operations? A: As of September 30, we had $1.4 million in cash, a $200,000 increase from June 30. We are comfortable that this will support us in the foreseeable future.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.