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Bridgeline Digital (BLIN)

Participants
Ari Kahn President & CEO
Thomas Windhausen CFO & Treasurer
Howard Halpern Taglich Brothers
Walter Ramsley Walrus Partners
Call transcript
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Operator

Good day and thank you for standing by. Welcome to Bridgeline Digital Inc.

Second Quarter 2022 Earnings Call. At this time, all participants are in a listen-only mode. After the speakers presentation, there will be a question-and-answer session. Instructions]. [Operator like Mr. conference now speaker to hand today for to would over the your I Please ahead Windhausen, Thomas go sir.

Thomas Windhausen

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

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

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

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

to President to the like I Kahn, over would call Ari Ari? our turn Now, and CEO.

Ari Kahn

you, Tom. Good Thank great had afternoon, We sales. everyone.

Our for and us. XX license sales high time was all second quarter

Our sales out ratio licenses of software customer services more is contribute quickly increasingly revenue to new box, our which to our to the licensed grow. to becoming allows

these live strategy licensees strong than customers important As for the acquisition less our [NOI] we'll customer goes change typically in drive An our each new three months to network. of see partner is their business.

eagle.com vendors independent customers. partner and agency be win Agency continue to X-engage help agencies to business. dedicated have We American working been new a new win They ISV like to software team strong. us have particularly with partners and key

Optimizely for the purchase our BXB partnership including the tend BigCommerce investments grow to Bridgeline several partnered the momentum. Hawksearch Cleaner’s we've distributors online this the BXB of build together. on expand Electric. the Optimizely interface. BXB with Crescent Torrco With helped Optimizely, distributors Electric, Gerrie site On only BXB Optimizely customers can in and and Supply, several and sector We revenue administrative to Optimizely. search connector directly we and box side, from Optimizely ISV is the one out Customers

including Berlin BigCommerce Our new well customers automotive. with several and manufacturing in Techo-Bloc Together Bridgeline with as growth packaging, and manufacturers drive Waymaker. BigCommerce partnership with now continues to power

their Bridgeline with drives and than per sales incremental XX% more deliver to partner With more sales. from e-commerce sales another sales. our we continual addition expanding also to sales new set More our marketing customers less crossed In licensed dollar as can cross website efficient, of to of of licensed cross apps, important part is strategy and This tremendous value faster quarter expenses. our licensed this improvements cross sales, our sells. by provides and advertising require were for driven sales

and We to continues our acquire companies sales than as base customer of as cross new expect and continue growth deliver products XXXX to release to we more grow.

The across how view and new their e-commerce the online dashboard Bridgeline of sales value. makes to at the marketers to This of our quarter sales. basic and revenue generating down sales average their categories; challenges sift software three customer drive we conversion, to grow. opportunities them dashboard dashboard traffic, target This busy revenue through This recommendations focus online on organizes and performance to help site's related can as our base. the cross marketers provides aspects order helps glance launched E-XXX and a noise and

In products We customers addressed for is quarter. that [indiscernible] help requirements. this suit SEO several launched years. to location for TruPresence and also TruPresence manage customers its our our the unique TruPresence nearest franchise and we've specifically book the launched distributed challenges largest nearly find industry. with XXXXs second requirements locations websites our tuned TruPresence franchisee with complex allows brands of franchises appointments. quarter our franchise of XXXX Franchises to have pages locating one

Other and privately quarter search year. Radiators in this We BXB Hawksearch won a nation's another with this and goods selected improve X-XXX five is customers franchise, increase with keep continue is in to the signups want one selected X equipment MRR the for auto power The retailer sales Radiators. bank In powerful chose Asia search sporting chose store. its States, Kentico sporting going its and natural because its good wins in experience chose purchases online distributors, and general Hawksearch $X,XXX the website. over a language this also features. the platform. corporate selected quarter products sports inventories one partnership We distributor top largest power its more increase of specific its catalog. of recommendation owned BXB momentum. of support wholesaler Hawksearch online sector our e-commerce that than term investing a their quarter customer Hawksearch long of other product will large and on SEO from Europe, help for for include X-XXX services to catalog. top to its a with bank BXB In the online locations. It's fiscal references processing implemented customers to million was building sites. we're Celebros be largest We're site to strength Station, product first automotive was its site parts. BXB market in and electrical, important each with in Sports customers selected medical sales including distributors Magento features. industries. well DataBravo XXX chose in and find as [started] data BXB with new Hawksearch their this to the licensed leading WooRank recommendations contribute A to reputation parts throughout Hawksearch online several biotech and as Bridgeline Celebros This to Kentico software distributor their engine and industrial global United

cutting drive XXX to way. year a and cash across Last we can sales companies now. was stocks and evaluate opportunities. and right and revenue online X two XX be to are indeed languages technology Hawksearch's a nearly And the challenging believe acquisition products we're We be and over this environment customer e-commerce. products with to $X.X of we the deferred customers. customer globally sell paying strategic be we going in that continue ended with the for North with valuations companies drop and is opportunities through after acquisitions and attract acquisitions America that creative international Hawksearch million our could distributor continue to that landscaping chose our multi-language Hawksearch a acquisitions. in an to across that of customer million This we existing before for to We we only considering The stores made America evaluate catalog. and new their supports debt edge expanding and emphasis Techo-Bloc to year, Finally, targets quarter WooRank time. in Europe. patient look costs consider We for cross can North over $ to rank base have and course sold need intend opportunities and financed

sales this Financial time, innovation in balance Officer, continue I'll us operations. for our investments and any product to Tom call additional At hand without operations well and capital off our and Our the marketing Chief Tom? cash projected positions Windhausen. to requiring

Thomas Windhausen

ended which XXXX and is afternoon year. excited for Total our subscription the in XX, of revenue share XX, license results both I'm $X.X prior fiscal services $X.X March just of quarter to Ari. this was the 'XX, positive March ended which you for quarter the million and Thanks versus million XXXX. second revenue financial on with comprised

Now going component into each revenue. of

and $X comprised quarter to perpetual license license prior the licenses, revenue SaaS maintenance XX% subscription hosting which Our from increased period. revenue, for million is and revenue, the year of million $X.X in

of XX% subscription license which of impact acquisitions our year our quarter period. WooRank Hawksearch, prior of subscription the revenue to for in increase the and in has compared license to a total includes XX% revenue. percent subscription percentage high increased total a As This revenue revenue revenue, have prior of the of

services prior of period. for quarter rounded revenue was year Our the $X.X the compared as $X.X million in million

percentage of revenue accounted the of As quarter. for revenue total services revenue total a XX% for

to Our $X.X and XX, cost period. compared to ended of or million the XX% March million the revenue increased for year prior $X.X $X.X XXXX quarter million

prior $X.X million our million to As XX% period. for $X in be compared as or the profit increased gross million a quarter result, the $X.X to year

gross XX% prior for the period. XX% Our the year increased quarter, compared overall to in margin percentage to

our March three gross Our subscription prior the period. prior the XX% in compared as margins XX, compared in the XX% for license XX% were XX% ended months the as year and ended year to for XXXX months gross margin services three XXXX to March were

increased prior costs increase as period. operations to quarter in $X.X our for loss of acquired from a $X.X in quarter the year. million the prior the the in income operating of compared Our period. loss the to operating $XXX,XXX a in last resulted in from being businesses This operating year expenses $XXX,XXX includes from year expenses million This

in the of as change and ended million The in the loss XXXX. consideration expenses in expense compared was to fair quarter and on March other other slight to in contingent income period XXXX. a XX, value same income of $X.X Moving income

the classified For period. the $X.X our in in prior the in our to the net $X.X period. of in liability quarter Overall, a mentioned. adjustments ended quarter million the of March loss for non-cash fair resulted warrants impact The income million $X.X 'XX non-cash as change was in XX, change fair year the XX, compared compared includes income year loss $X.X the to as just ended million XXXX, million of income net I of net value prior value that March

to Moving EBITDA.

Our for the $X.X quarter adjusted EBITDA negative period. a million compared positive to the prior year million in $X.X was

innovation, on XXXX cash Bridgeline focus XX, total mentioned of and to and March to million. on looks the March of time like as shareholder cash and Thank receivable total joining accounts on $XX.X $XX.X had the continued of success our $X.X for balance to our ended receivable sheet, year you and $X.X forward this up our million. million fiscal beyond to product were and XX had of are call open to answers. call million Moderator? million questions assets million today. in second we'd to continue, quarter at In liabilities half we as Ari customer last revenue and we us success Moving growth, of the delivering for compared $X.X this value. looks continue accounts our expanding At we December where $X.X our

Operator

is Thank [Operator now open have floor the questions. you. from At Taglich Instructions] Brothers. We from this a for time Howard question Halpern line of the

line open. Please Your go is ahead.

Howard Halpern

Congratulations guys. Great quarter.

Ari Kahn

Thank you Howard.

Howard Halpern

customer development to going of of providing dashboard offerings? new describe the that satisfaction in driving sales both is and your how Just important

Ari Kahn

little of customer existing a itself base. our dashboard within the our than new got so XX%, sales happening we've more bit are that about Well,

inside So the broad we've expanding catalog that now. we're XX% pretty one that. our dashboard. of number of got generation software The actually customers own lead None a for product all us of tool is our and

our become allowing to and that aware the products have we making, it's recommendations. making different of So customers

us which speak on one when can for get like us understand products side of the customers and helping notifying to them them. don't from own they help values might other a So then product and with instance, us the for Hawksearch

and a increase helped value We've sales Notary amount for through catalog you complex a because the product, driven them bought recognizing National way recent a look that value to most different of our customers’ convert to them at its have. instance being They've average our of can product One Hawksearch, Association they've we quarter. revenue. by gone larger tremendous able see can got to that and customers great is dashboard order for online

catalog so a get going customers how widget, prime product grows, do can't site, into products to And buy there's much, we three And become and important. over simple. going that. are that's can we even inundated many companies they where categories; everything all more by release more everything, decision value dashboard of comes is the so options. with that and traffic The our buy Keep a hey, place customers simplifying saying, customer As dashboard our we to down how how that into buy and simplifies it should convert those basic because we where each them, more traffic acquisitions for make we're new the drive my your you cuts do buy do our this in to do it customers. for even to

what did they drive Just that from get and need revenue I the dashboard. tell me to

Howard Halpern

in future that for you larger easily and product base? and terms and dashboard for Okay. you acquisitions of that to all customer base exploit customer larger might a integrate And are I have questions looking guess, to in the that made other of how dashboard acquisitions have a potential

Ari Kahn

Right.

And inside of integration about integration risk for not organically acquired. like dashboard And just where the a this strategy and risk integration, all is compiler by just -- was And on makes all other the Bridgeline that's the dashboard. a grow simplify that dashboard combined. the about Bridgeline. product the dashboard, our databases product learn the It really it's part initial space, at put acquired of And we and Bridgeline. of new top both bringing level that gone So and integrating We lower the can that areas learn customers right, we very like so available. fast, information customers to in rest on integration, acquisitions its all product having about is add interface of route technically meaning huge that integration the new big inorganically together. acquisition best concepts products the that the our believe behind a just of to common on

things simplifies a bit. So quite it

add the M&A of fallen it's take tricky acquisition valuations. advantage bit do able a because of mean, On just roof an front, little be right that cash the through now, I huge amount just did the low to market and a to has

with we're expectations watching. we'll these will we We ourselves can levels But if market patient acquisitions. raise and companies it and private do have we're deluding not doing seen the a come But one, at the do for happens way that decrease in back. a that capital only depressed

Howard Halpern

the with marketing going of reported you expense for Are that forward this one. happy SGLR And final you quarter? just level and one sales

Ari Kahn

Yes.

healthy that's dollar we acquisition of about X is We're side on sales that's to to and bit customer And should and a be And investing in $X.X it's time even great. cost And and deals. new X.XX and in sales million rent at about to and close sales little to million that going sales the quarter and we're actually we think looking it X a continue reported be. about and win increase marketing. to forward value going right marketing. more our So customer lifetime the where to to appropriate

Howard Halpern

keep and great work. up Thanks the Okay.

Ari Kahn

Thank you.

Operator

Walter from Partners. Walrus is that question next of the you Ramsley from The line have

ahead. line is open. go Your Please

Walter Ramsley

I you have of Excellent there? go questions and quarter, few to have adjusted kind Can Congratulations. got that say. mind. to what that a explain if payment The item you. a and kind just happened of contingent you don't the I through was profit. detail with was Thank mentioned that

Ari Kahn

Tom. for one that's think I Walter,

Thomas Windhausen

Sure.

balance fair from sheet our two warrants, contingent period, each the we adjust you the hear things to consideration, prior probably earnouts the then more acquisitions. have So that the and value of that a

ultimate to an had our we as period, adjustment will the in be. what So expected payout

reduce the the that sheet through in comes income the change and So balance statement. liability

Walter Ramsley

get giving says that. value you it securities that went or was Not down.? changed, the thought as I they're No, that it them good not what as the just of doing -- you're

Thomas Windhausen

it's mechanics Some revenue operating all for not all, not it's all results working and driven. some in adjustments. other there There's and capital mechanics

-- So

Walter Ramsley

All Okay. right.

Thomas Windhausen

payment. final --

Walter Ramsley

And operating thing.

you again us what far that. at And many us that. of as mentioned I how Can expire for review warrants, tell you warrants then and when Okay, outstanding get the are price? and they just kind as

Thomas Windhausen

expire in outstanding forward change from full XXXX. no all we'll our the with exercise, that in expiration dates, on an do tonight the warrants There file May are a our in the quarter. is which Sure. those really much with X.X handful but prices not XX-Q table But a of there $X. and past around million going here we'll change average have in price QX but

Walter Ramsley

Okay, anything it, and are you if lockdowns any don't to helping or get there know macro that? war, I weighing it the that into the inflation, chain like either the factors name supply really economic are want you China, the in on but business,

Ari Kahn

so in some say I'd got on. our Right? is lot Not So States There's Israel, and -- a Canada. the Belgium United team some impacting the in us going and we've people rest much. in in

prices to a watch, macro as company We'll So fine. not we we and wait. main doing limits a the stock that just and see with war down that that's ability our economically, acquire stock, the affected by thing that our

companies public macroeconomic think But private valuation we for lag buying continuing in buy. companies expectations. doesn't their I impact us this a and that other supply stuff And the cheaper in for chain are us every terms it's either. are sector our customers of all typically to getting we're while think day will

So we in seen reduce investments that technology. haven't their

Walter Ramsley

well, that but be the saying congratulations. that, you're only Okay, to seems in like company the world

Ari Kahn

[indiscernible].

Walter Ramsley

All thanks right, again.

Ari Kahn

Thank you Walter.

Operator

[Operator Instructions] call this time. at to for would There further no remarks. any our presenters turn like the back are questions I to closing

Ari Kahn

are for better today. mean, you. We excited of continued business. well. shareholders Everybody And joining prospects us Thanks our about Thank growth going We're and appreciate are the things ever. our the I partners. than support customers, our our really

soon. you you forward look Stay Thank well. we And we'll and QX again fiscal speaking to with all healthy on So call. our you. see

Operator

This all joining. concludes today's for call. conference you Thank

now may disconnect. You