Bridgeline Digital, Inc. (NASDAQ: BLIN), a provider of marketing
software, today announced financial results for its fiscal first
quarter ended December 31, 2023.
“Our recent release of Smart Search and Rapid UI
for HawkSearch drove the highest new license bookings for any
quarter since I came to Bridgeline,” said Ari Kahn, Bridgeline’s
President and Chief Executive Officer. “Smart Search increases our
customer’s revenue by allowing their site visitors to find products
using photos from their smart phone and natural language to engage
with the site as they would with a sales advisor. Rapid UI
increases our total addressable market to include mid-sized
companies who need the same search capabilities of enterprise
customers without investing months and thousands of dollars in
customizing their implementation.”
Financial Highlights – First Quarter of
Fiscal Year 2024
- Total revenue was
$3.8 million, compared to $4.1 million in the prior year
period.
- Subscription and
licenses revenue was $3.1 million, compared to $3.2 million in the
prior year period.
- Gross profit was
$2.6 million, compared to $2.8 million in the prior year
period.
- Gross margin was
68%, compared to 69% in the prior year period.
Business Highlights
Sales
- In the quarter,
Bridgeline signed more than $2.5 million in new customer contracts
with 28 license sales adding over $750 thousand in annual recurring
revenue. Search drove most sales and now represents
over 50% of Bridgeline’s revenue.
- Bridgeline’s Net
Revenue Retention for the quarter was over 90% with search over
95%. Overall Net Revenue Retention was impacted by a large legacy
product customer who began winding its subscription down in 2022,
which has now concluded.
- New customers in
the first quarter include several electrical distributors, which
furthers Bridgeline’s dominance in this market. Bridgeline also had
multiple sales in the broader building materials market as well as
the insurance, education, and agriculture markets.
- Several sales of Bridgeline’s Smart
Search product were made to existing customers in the first
quarter, and Bridgeline has strong demand for Smart Search in its
over 500 HawkSearch customers supporting future sales.
Product
Smart Search
Bridgeline released Smart Search in its first
quarter which drove several new sales for the company, expanded its
pipeline for future sales into its existing customer base, and
increased its competitive value proposition to win new
customers.
Smart Search grows online revenue by allowing
site visitors to search for products with photos or by conversing
with the search bar using questions or descriptions similar to how
you would interact with a sales advisor. In addition to
HawkSearch’s product search that allows customers to find products
using keywords, Smart Search allows them to describe a problem they
are trying to solve and discover products they may not have
realized they need. For example, a camper planning a trip can ask,
“what should I bring on a two-week camping trip for cooking?” The
Smart Search response would include expected products such as a
cooking stove and propane tank, but also include Meal, Ready-to-Eat
(MRE) food pouches the camper may not have thought about. The
camper may then see a person on the street with cool hiking boots
they like. They could quickly snap a picture with their camera,
return to the website on their phone, and immediately find those
boots to purchase. These experiences would not be possible without
Smart Search.
All of Bridgeline’s more than 500 HawkSearch
customers, who generate nearly $7 million in subscription revenue,
can benefit from Smart Search. Customers can upgrade for an
additional fee to their current subscription. This gives Bridgeline
an opportunity to increase its subscription revenue by more than $2
million, from our existing customer relationships alone.
In addition to revenue generated from upgrades to
existing customers, many of Bridgeline’s latest sales were won
because new customers recognized the unique value that Smart Search
offers over the competition.
Rapid UI
Bridgeline also continues to improve Rapid UI
which allows new HawkSearch customers to add HawkSearch, including
Smart Search, to their online store without the need for any
professional services. Nearly half of Bridgeline’s first quarter
HawkSearch sales included Rapid UI. Rapid UI expands HawkSearch’s
total addressable market to include smaller companies who need to
launch HawkSearch quickly and preserve implementation budget for
larger subscriptions or future customizations.
Partners
HawkSearch released the Xngage Connector for
Optimizely Configured Commerce which was recently announced at
OptiCon. The Xngage Connector accelerates Bridgeline’s sales to
Optimizely customers because it is out-of-the-box, meaning no
implementation effort. The Connector automatically allows
HawkSearch to discover the Optimizely-powered website’s products,
adds HawkSearch to their site, and allows marketers to manage
HawkSearch directly from within the Optimizely administrative
interface.
HawkSearch has the only BigCommerce connector for search that
supports multi storefront. Multi storefront gives HawkSearch an
advantage in the franchise and chain store market and led to a new
furniture store customer in Europe. The implementation includes
HawkSearch Rapid UI and also a user experience where users can see
different furniture colors in the autocomplete dropdown from the
search bar. Bridgeline will showcase its connector at the B2B
Online Chicago event with BigCommerce in May 2024.
Financial Results –
First Fiscal Quarter of Fiscal Year 2024
- Total revenue,
which is comprised of Licenses and Services revenue, was $3.8
million for the quarter ended December 31, 2023, as compared to
$4.1 million for the same period in 2022.
- Subscription and
licenses revenue, which is comprised of SaaS licenses, maintenance
and hosting revenue and perpetual licenses revenue was $3.1 million
for the quarter ended December 31, 2023, compared to $3.2 million
for the same period in 2022. As a percentage of total revenue,
Subscription and licenses revenue was 82% of total revenue for the
quarter ended September 30, 2023, compared with 79% for the same
period in 2022.
- Services revenue
was $0.7 million for the quarter ended December 31, 2023, compared
to $0.9 million for the same period in 2022. As a percentage of
total revenue, Services revenue accounted for 18% of total revenue
for the quarter ended December 31, 2023, compared with 21% for the
same period in 2022.
- Cost of revenue
was $1.2 million for the quarter ended December 31, 2023, compared
to $1.3 million for the same period in 2022.
- Gross profit was
$2.6 million for the quarter ended December 31, 2023, as compared
to $2.8 million for the same period in 2022.
- Gross margin was
68% for the quarter ended December 31, 2023, compared to 69% for
the same period in 2022. Subscription and licenses gross margin
were 73% for the quarter ended December 31, 2023, consistent with
the 73% for the same period in 2022. Services gross margins were
44% for the quarter ended December 31, 2023, as compared to 51% for
the same period in 2022.
- Operating
expenses of $3.2 million for the quarter ended December 31, 2023,
consistent with $3.2 million for the same period in 2022.
- Operating loss
was $0.6 million for the quarter ended December 31, 2023, as
compared to a loss of $0.4 million for the same period in
2022.
- The warrant
liability revaluation resulted in a $18 thousand non-cash gain
attributable to the change in the fair value of the warrant
liabilities for the quarter ended December 31, 2023. This compares
to a $0.3M non-cash gain from revaluation for the same period in
2022.
- Net loss for the
quarter ended December 31, 2023, was $0.6 million, compared to net
income of $0.1 million for the same period in 2022.
Conference Call
Bridgeline Digital, Inc. will hold a conference
call today, February 14, 2024, at 4:30 p.m. Eastern Time to discuss
these results. The Company’s President and Chief Executive Officer,
Ari Kahn, and Chief Financial Officer, Thomas Windhausen, will host
the call, which will be followed by a question-and-answer
period.
The details of the conference call and replay are as
follows:
Bridgeline Digital First Quarter 2024 Earnings Call
Wednesday, February 14, 2024, at 4:30 p.m. ET
https://register.vevent.com/register/BIc9950cd93b6f4667bb57305753c3560b
Participants can register for the conference call using the
above URL above. Once registered, participants will receive dial-in
numbers and unique PIN number.
Replays of the conference call will be available through the
following link:
https://edge.media-server.com/mmc/p/drfgamsh
Non-GAAP Financial Measures
This press release contains the following
non-GAAP financial measures: Adjusted EBITDA, non-GAAP adjusted net
income (loss), and non-GAAP adjusted net earnings (loss) per
diluted share.
Adjusted EBITDA is defined as earnings before
interest, taxes, depreciation, amortization, stock-based
compensation expense, impairment of goodwill and intangible assets,
non-cash warrant related income/expense, changes in fair value of
contingent consideration, restructuring and acquisition-related
costs, amortization of debt discounts, preferred stock dividends
and any related tax effects. Bridgeline uses Adjusted EBITDA and
non-GAAP adjusted net income (loss) as supplemental measures of our
performance that are not required by, or presented in accordance
with, accounting principles generally accepted in the United States
("GAAP").
Non-GAAP adjusted net income (loss) and non-GAAP
adjusted net income (loss) per diluted share are calculated as net
income (loss) or net income (loss) per share on a diluted basis,
excluding, where applicable, amortization of intangible assets,
change in fair value of warrants, stock-based compensation,
restructuring and acquisition-related costs, goodwill impairment
charges, preferred stock dividends and any related tax effects.
Bridgeline's management does not consider these
non-GAAP measures in isolation or as an alternative to financial
measures determined in accordance with GAAP. The principal
limitation of these non-GAAP financial measures is that they
exclude significant expenses and income that are required by GAAP
to be recorded in the Company's financial statements. In addition,
they are subject to inherent limitations as they reflect the
exercise of judgments by management about which expenses and income
are excluded or included in determining these non-GAAP financial
measures. To compensate for these limitations, Bridgeline
management presents non-GAAP financial measures in connection with
GAAP results. Bridgeline urges investors to review the
reconciliation of its non-GAAP financial measures to the comparable
GAAP financial measures, which is included in this press release,
and not to rely on any single financial measure to evaluate
Bridgeline's financial performance.
Our definitions of Adjusted EBITDA and non-GAAP
adjusted net income (loss) may differ from, and therefore may not
be comparable with, similarly titled measures used by other
companies, thereby limiting their usefulness as comparative
measures. As a result of the limitations that Adjusted EBITDA and
non-GAAP adjusted net income (loss) have as an analytical tool,
investors should not consider them in isolation, or as a substitute
for analysis of our operating results as reported under GAAP.
Safe Harbor for Forward-Looking Statements
Statement under the Private Securities Litigation Reform
Act of 1995
All statements included in this press release,
other than statements or characterizations of historical fact, are
forward-looking statements. These “forward-looking statements”
within the meaning of the Private Securities Litigation Reform Act
of 1995, are based on our current expectations, estimates and
projections about our industry, management’s beliefs, and certain
assumptions made by us, all of which are subject to change.
Forward-looking statements can often be identified by words such as
“anticipates,” “expects,” “intends,” “plans,” “predicts,”
“believes,” “seeks,” “estimates,” “may,” “will,” “should,” “would,”
“could,” “potential,” “continue,” “ongoing,” similar expressions,
and variations or negatives of these words. These statements appear
in a number of places in this press release and include statements
regarding the intent, belief or current expectations of Bridgeline
Digital, Inc. These forward-looking statements are not guarantees
of future results and are subject to risks, uncertainties and
assumptions, including, but not limited to, business operations and
the business of our customers, suppliers and partners; our ability
to retain and upgrade current customers, increasing our recurring
revenue, our ability to attract new customers, our revenue growth
rate; our history of net loss and our ability to achieve or
maintain profitability, instability in the financial markets,
including the banking sector; our liability for any unauthorized
access to our data or our users’ content, including through privacy
and data security breaches; any decline in demand for our platform
or products; changes in the interoperability of our platform across
devices, operating systems, and third party applications that we do
not control; competition in our markets; our ability to respond to
rapid technological changes, extend our platform, develop new
features or products, or gain market acceptance for such new
features or products, particularly in light of potential
disruptions to the productivity of our employees resulting from
remote work; our ability to manage our growth or plan for future
growth, and our acquisition of other businesses and the potential
of such acquisitions to require significant management attention,
disrupt our business, or dilute stockholder value; the volatility
of the market price of our common stock, the ability to maintain
our listing on the NASDAQ Capital Market, or our ability to
maintain an effective system of internal controls, as well as other
risks described in our filings with the Securities and Exchange
Commission. Any of such risks could cause our actual results to
differ materially and adversely from those expressed in any
forward-looking statement. Bridgeline Digital, Inc. assumes no
obligation to, and does not currently intend to, update any such
forward-looking statements after the date of this release, except
as required by applicable law.
About Bridgeline Digital
Bridgeline is a marketing software solutions
provider that offers a suite of products that help companies grow
online revenue by driving more traffic to their websites,
converting more visitors to purchasers, and increasing average
order value.
To learn more, please visit www.bridgeline.com
or call (800) 603-9936.
Contact:
Bridgeline Digital, Inc.Thomas R. WindhausenChief Financial
Officertwindhausen@bridgeline.com
BRIDGELINE
DIGITAL, INC. |
CONSOLIDATED
STATEMENTS OF OPERATIONS |
(in thousands,
except share and per share data) |
(Unaudited) |
|
|
|
|
|
Three Months
Ended |
|
December 31, |
|
2023 |
|
2022 |
Revenue: |
|
|
|
Subscription and perpetual licenses |
$ |
3,086 |
|
|
$ |
3,229 |
|
Digital engagement services |
|
669 |
|
|
|
854 |
|
Total net revenue |
|
3,755 |
|
|
|
4,083 |
|
|
|
|
|
Cost of
revenue: |
|
|
|
Subscription and perpetual licenses |
|
827 |
|
|
|
861 |
|
Digital engagement services |
|
376 |
|
|
|
418 |
|
Total cost of revenue |
|
1,203 |
|
|
|
1,279 |
|
Gross profit |
|
2,552 |
|
|
|
2,804 |
|
|
|
|
|
Operating
expenses: |
|
|
|
Sales and marketing |
|
913 |
|
|
|
1,209 |
|
General and administrative |
|
781 |
|
|
|
832 |
|
Research and development |
|
1,093 |
|
|
|
747 |
|
Depreciation and amortization |
|
385 |
|
|
|
378 |
|
Restructuring and acquisition related expenses |
|
15 |
|
|
|
- |
|
Total operating expenses |
|
3,187 |
|
|
|
3,166 |
|
Loss from operations |
|
(635 |
) |
|
|
(362 |
) |
|
|
|
|
Change in fair value of contingent consideration, interest expense
and other, net |
|
- |
|
|
|
(9 |
) |
Change in fair value of warrant liabilities |
|
18 |
|
|
|
297 |
|
Income
(loss) before income taxes |
|
(617 |
) |
|
|
(74 |
) |
Provision for (benefit from) income taxes |
|
5 |
|
|
|
6 |
|
Net (loss)
income |
$ |
(622 |
) |
|
$ |
(80 |
) |
|
|
|
|
Net (loss)
income per share attributable to common shareholders: |
|
|
|
Basic net (loss) income per share |
$ |
(0.06 |
) |
|
$ |
(0.01 |
) |
Diluted net (loss) income per share |
$ |
(0.06 |
) |
|
$ |
(0.01 |
) |
Number of
weighted average shares outstanding: |
|
|
|
Basic |
|
10,417,609 |
|
|
|
10,417,609 |
|
Diluted |
|
10,417,609 |
|
|
|
10,430,822 |
|
|
|
|
|
BRIDGELINE
DIGITAL, INC. |
CONSOLIDATED
BALANCE SHEETS |
(in thousands,
except share and per share data) |
(Unaudited) |
|
|
|
|
ASSETS |
|
|
|
|
December
31, |
|
September
30, |
|
2023 |
|
2023 |
Current
assets: |
|
|
|
Cash and cash equivalents |
$ |
1,409 |
|
|
$ |
2,377 |
|
Accounts receivable, net |
|
1,251 |
|
|
|
1,004 |
|
Prepaid expenses and other current assets |
|
463 |
|
|
|
278 |
|
Total current assets |
|
3,123 |
|
|
|
3,659 |
|
Property and
equipment, net |
|
112 |
|
|
|
151 |
|
Operating
lease assets |
|
294 |
|
|
|
390 |
|
Intangible
assets, net |
|
4,544 |
|
|
|
4,890 |
|
Goodwill,
net |
|
8,468 |
|
|
|
8,468 |
|
Other
assets |
|
61 |
|
|
|
73 |
|
Total assets |
$ |
16,602 |
|
|
$ |
17,631 |
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
Current
liabilities: |
|
|
|
Current portion of long-term debt |
$ |
213 |
|
|
$ |
267 |
|
Current portion of operating lease liabilities |
|
172 |
|
|
|
148 |
|
Accounts payable |
|
1,126 |
|
|
|
1,255 |
|
Accrued liabilities |
|
1,207 |
|
|
|
995 |
|
Deferred revenue |
|
1,660 |
|
|
|
2,084 |
|
Total current liabilities |
|
4,378 |
|
|
|
4,749 |
|
Long-term
debt, net of current portion |
|
433 |
|
|
|
435 |
|
Operating
lease liabilities, net of current portion |
|
122 |
|
|
|
241 |
|
Warrant
liabilities |
|
156 |
|
|
|
174 |
|
Other
long-term liabilities |
|
582 |
|
|
|
572 |
|
Total liabilities |
|
5,671 |
|
|
|
6,171 |
|
|
|
|
|
Commitments
and contingencies |
|
|
|
|
|
|
|
Stockholders' equity: |
|
|
|
Preferred stock - $0.001 par value; 1,000,000
shares authorized; |
|
|
|
Series C Convertible Preferred stock: 11,000 shares authorized; 350
shares issued and outstanding at December 31, 2023 and September
30, 2023 |
|
- |
|
|
|
- |
|
Common stock - $0.001 par value; 50,000,000
shares authorized; |
|
|
|
10,417,609 shares issued and outstanding at December 31, 2023 and
September 30, 2023 |
|
10 |
|
|
|
10 |
|
Additional paid-in-capital |
|
101,387 |
|
|
|
101,275 |
|
Accumulated deficit |
|
(90,199 |
) |
|
|
(89,577 |
) |
Accumulated other comprehensive loss |
|
(267 |
) |
|
|
(248 |
) |
Total stockholders' equity |
|
10,931 |
|
|
|
11,460 |
|
Total liabilities and stockholders' equity |
$ |
16,602 |
|
|
$ |
17,631 |
|
|
|
|
|
BRIDGELINE
DIGITAL, INC. |
RECONCILIATION OF GAAP TO NON-GAAP RESULTS |
(in thousands,
except per share data) |
(Unaudited) |
|
|
|
|
|
Three Months
Ended |
|
Dec 31, |
|
2023 |
|
2022 |
Reconciliation of GAAP net income (loss) to Adjusted
EBITDA: |
|
|
|
GAAP net income (loss) |
$ |
(622 |
) |
|
$ |
(80 |
) |
Provision for income taxes |
|
5 |
|
|
|
6 |
|
Change in fair value of contingent consideration, interest expense
and other, net |
|
- |
|
|
|
9 |
|
Change in fair value of warrants |
|
(18 |
) |
|
|
(297 |
) |
Amortization of intangible assets |
|
346 |
|
|
|
342 |
|
Depreciation and other amortization |
|
45 |
|
|
|
42 |
|
Restructuring and acquisition related charges |
|
15 |
|
|
|
- |
|
Stock-based compensation |
|
112 |
|
|
|
93 |
|
Adjusted EBITDA |
$ |
(117 |
) |
|
$ |
115 |
|
|
|
|
|
Reconciliation of GAAP net income (loss) to
non-GAAP |
|
|
|
adjusted net income (loss): |
|
|
|
GAAP net income (loss) |
$ |
(622 |
) |
|
$ |
(80 |
) |
Change in fair value of warrants |
|
(18 |
) |
|
|
(297 |
) |
Amortization of intangible assets |
|
346 |
|
|
|
342 |
|
Restructuring and acquisition related charges |
|
15 |
|
|
|
- |
|
Stock-based compensation |
|
112 |
|
|
|
93 |
|
Non-GAAP adjusted net income (loss) |
$ |
(167 |
) |
|
$ |
58 |
|
|
|
|
|
Reconciliation of GAAP net earnings (loss) per diluted
share to |
|
|
|
non-GAAP adjusted net earnings (loss) per diluted
share: |
|
|
|
GAAP net income (loss) applicable to common shareholders |
$ |
(0.06 |
) |
|
$ |
(0.01 |
) |
Change in fair value of warrants |
|
(0.00 |
) |
|
|
(0.03 |
) |
Amortization of intangible assets |
|
0.03 |
|
|
|
0.03 |
|
Restructuring and acquisition related charges |
|
0.00 |
|
|
|
- |
|
Stock-based compensation |
|
0.01 |
|
|
|
0.01 |
|
Non-GAAP adjusted net income (loss) per diluted share |
$ |
(0.02 |
) |
|
$ |
0.01 |
|
|
|
|
|
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