Bridgeline Digital (BLIN) 21 Dec 222022 Q4 Earnings call transcript

Thank you for standing by, and welcome to the Bridgeline Digital, Inc. Fourth Quarter 2022 Earnings Call. At this time all participants are in listen-only mode. After the speakers’ presentation, there will be a question and answer session. [Operator Instructions] As a reminder, today's conference is being recorded. the your turn Mr. now will conference host, to I Tom Windhausen, CFO. begin. may you Sir,

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

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

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

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

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

was for license quarter, ARR $X we over Subscription recurring license annual $XXX,XXX revenue to fourth year, revenue. revenue. and subscription revenue revenue year Tom. afternoon, million of million Bridgeline XX This license, top-line ARR In and sales by $XX.X $X.X in year. Thank to the increased and the booked to which $X.X delivered of Most from million growth, revenue with new in you, XX% XX% everyone. million. was revenue growth our of Good total a million quarter $XX.X XX% in total the fourth in increase with end in

ended customers EBITDA, capital to just net and adjustment earn-out consideration HawkSearch quarter a month our services. expanded payment. fiscal over to relating of Publishing working negotiated income of remains investments driven and XX%. year to XX in their XX% drove Bridgeline Bridgeline We by subscription in top prepayment with this our with $XXX,XXX won our with $X million X-Eleven which Our that existing cash of including XX of primarily and software after cross-sell strategy further the discount million revenue XXXX sales over gross and a We for early $X.X comprised adjusted six ended acquisition million commitment in the strong Bridgeline the to fourth on a Existing and license in license with margins $X.X Sage revenue, customers. fiscal newly being HP, customers, on quarter in total $XXX,XXX in

Our and innovation operations. additional cash for our and projected without revenue marketing sales investments and well capital to positions us continue in

in distributor XXX,XXX a to a to personalized with who catalog search and products. Bridgeline's XXX use HawkSearch appliance distributor of quarter top than use XX to site search selected Skechers and supplier fourth technology HawkSearch with has capabilities. data site to HawkSearch committed catalog recommendations multi-year to $X.XX products included to over recommendations HawkSearch's has locations, of to enhancement quality plumber more for XXX than market more each garden license month. in functionality committed brands leading This for the distribution power million supply recommendation. two HawkSearch its power for site X,XXX personalized for Bridgeline's for quality will and their A than pet committed locations, Bridgeline’s XX Footlocker. grow XX Asia Pacific XX distributor's was A with sales and TruePresence to for supplier search $XX,XXX millions Our and data inquiries This their will X million a license monthly power products search Bridgeline power power their HawkSearch brands capabilities. stores our and Reebok, leader of to enhancement power million more to and $XX,XXX New massive websites sites, search A online license ten queries. major supplier Converse, identified and including Balance, AI help retailer leading

Partners. with wins, we renewing renewals including and XXX had In Schlemmer also new subscription our to addition Caterpillar, Euro outstanding Hammacher AstraZeneca, customer customers, more than customer Coca-Cola Pacific

Optimizely Partners subscription renewals such and growth, on selling search XXX customers announced with and which including integrated BXB BXC platforms. both in first as percentage Optimizely’s and This for is with Bridgeline part non-native in XX our sales. customers largest a is countries HawkSearch services partnership focused implementing Electrolux. Heineken, are which partnership October an a their their Niteco, the agency, HawkSearch, Panasonic, site new As world's customer were driving especially important of XX%. revenue, of

the with and systems Thanx customers a XXX which and is customers. including Sales He the include such rate in BigCommerce the XX Handlebars platforms technology with expanded landing our Beauty. more marketing years Strategy. addition, integrator who Baker, MarTech demosite. on and as strategy win by for member search which their solution ownership. and to Thanx In a auto certified our sales of do total XXXX. the it directly Bandy This before Fortune serves rapid as framework is sector licenses HawkSearch a availability executive online to asPayPal, Ted called Mr. our continually after that industry revenue results page. build HawkSearch. that than leading turn can We store sales pages. was first in This website, FatWire, are for the of search users, improved to and speeds HawkSearch to the content scripts signing. it because and reduces Products partnered Bridgeline's generic within the framework demo experiences Optimizely management our their than expanded leader has and experience park, helps extend acquired company, Further, It front Bridgeline Media into experience month he such Java of quarter, Bridgeline. embeds HawkSearch This partnership search the and founding multi- Ulta sell strong Target, within release intelligent is components, and Oracle of connector both plan entire and team BigCommerce John Bridgeline in customers improves Bridgeline the my Media, with ratio. brands built prospects’ such experience the This recommendations UI of the joining we led has the full rather Murcott cost Murcott an extensive accelerates in HawkSearch. demo team company Bridgeline's framework brings Aerofit with BXB. released EVP complete the cycle, Bridgeline's its Group fourth for helped growth to and an in first additional has as market was time In including more website the also to HawkSearch

excited Windhausen. XXXX. away coming this fiscal our for us the Officer, to of time, Take over At I'd together All call Chief Financial to like Tom these really turn Tom. leaves

positive you the fiscal September quarter our to fourth of with I XXXX. results am ended XX, afternoon Ari. excited for Thanks, share which XXXX, this financial

total ended revenue XXXX the was to million $X.X year for million, compared as September X%, quarter XX, the in of Our $X.X period. an prior increase

component quarter XXXX ended revenue, X% comprised Looking revenue at is revenue, SaaS million. each to revenue of increased the license and our and XX, hosting which subscription license for September maintenance licenses, $X.X perpetual of

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

from the was $X.X XX, million XXXX, September year for revenue in the fourth services quarter the million quarter. prior $X.X slightly Our ended up

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

$X.X or compared period. $X.X million $X.X Our the for year decreased revenue prior cost to of in X% quarter, to the million million

the a result, margin for as $X.X As year period. Overall, to XX, the ended gross in our margin increased the compared prior September million profit XXXX, to to year – increased X% quarter compared profit million gross to $X.X prior $X the gross period. XX% million our September, or for our profit for quarter XX% ended

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

growth. to $X.X million for spending $X.X quarter our XXXX, we million operating prior our and marketing ended increased decreased Our from and supporting future expenses year the operating slightly in sales Within period. expenses September the current in

XX, Our prior million of net September to period. loss XXXX, in a was quarter compared $X.X loss the ended year as for million net the $X.X

as million was EBITDA Ari $X.X XXXX adjusted compared the for million, September to prior the quarter EBITDA, to $X.X Moving our period. ended for year mentioned,

and of us total at our to XXXX answers. innovation, $X.X XX, at receivable revenue accounts focus open this September had balance Thank and sheet, million. we $X.X were shareholder at to million and Moderator? Bridgeline our in our success on and $X.X customer forward questions assets September $XX.X million million the XXXX, call and liabilities to to and on were and cash call the joining product looks we you as we'd continued delivering value. fiscal our XX, of today success Moving beyond growth, like time, expanding continue total for

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

open. is line Your

Howard. is this Hi, Ari,

Howard. Hi,

Hi. Great year.

to Looking upcoming forward the year.

in what you about next the in, of traction do your kind What seeing years see are of remarks, from there? for kind product? of mentioned you you prepared couple guess, talked I TruePresence. You opportunities over And that

a Well, brand franchise one we TruPresence and version Clips on with are a market. created very market. – This the customers single every in TruPresence We've AlphaGraphics, we've traction that it. – got specifically is Sport our tight of focuses it great a is UPS, is our products like of and taken

now So increase conversion HawkSearch terms product from help TruPresence WooRank. with entry increase product. We our for can We our a forth. your traffic sure TruePresence becoming we of customer a increase in recommendations and so Bridgeline, your can point with value you order average can with

our continue of this they TruPresence think than to we a significantly growth is customers deals So to part grow and big be our larger each be as other and going to tend grow. they deal,

locations distributor opens proportionately for work the at that's fee distributor to XXX for that. have So with don't and and any that licenses do new instance, grows all XXX like and grows electrical essentially once selling we we won as an locations, license and

a it's model. our of very part So important

how in and of the back customer base and a and customer this then is about your in it selling your important okay, – customer growing terms And but base you – press your into offerings? release, talked base, more little

lot SaaS is a times major us, cost SaaS acquisition for XX of on customers’ to software months companies company, to Well, acquisition A impediment growth. cost. break a it even your take customer can for Right. like the just

into However, and customer are an sell lower. multiple substantially products can customer, those if you acquisition costs product you've a got existing

instance, For budget base. advertisement basically sell customer is your needed to there no existing to

your existing Your lower. can reps commissions sales to be much

less It's executive customer, to not new You partner, because with to to an sales reps sell existing you're to dancing don't level have sophisticated. so need high speak. a

to marketing more are a products into and for that the and acquisition internally, side. dollar addition to by basis grow XXXX, existing what throughout - the on important to new and as come winning new strategy our quickly we're well as both customers selling on going And acquiring that products So, and innovating that's to to customers, per releasing continue in sales is we where looking innovation and focus new play. acquisitions on

And growth are how partners important few your next over for years? now the

strategy. HawkSearch of for was in a game changer terms its Bridgeline go-to-market

on impact have came growth. the our partners didn't a partners making with really were Before we HawkSearch, that any Today, significant HawkSearch. thanks that to

XX% our We our new partners into deals. than classify groups. We of partners two more have attached to

on we same Agencies Software These in software are we do are like sold terms have agencies, box, and be with compatible our Optimizely, customers. also are that their And model compatible into can our their partners, customers the establish those We with are that systems ISVs have with generally huge solutions. that software we customers salesforce.com that a we because class Vendor partnerships customer and Independent in switch ISV making which the our our turn implementing call the selling partnership a cost just are around generally of existing of software of BigCommerce, our can typically of companies these so flip of integrators is have low-cost acquisition the that what partners with own once MarTech each platform us a partners. each and Sitefinity, of thousands of ISVs out second ISVs

So to Bridgeline press you're releases going from partnerships. to about see continue

You're partner can going I new being attend. a remain. to customer to did at And ration we see that our of that XX% us wins ISV that of expect we partners’ all attached conferences

that one where that on feedback you would And looking into? the are acquisitions, last customer products offerings are they one is looking just to portfolio within customer or – for acquisition about it an sell are when you could larger you see just potential for like has or Bridgeline getting maybe you base –

we've say, you consider “Hey, we company. explicitly product had that We should guys is you where We've that customers that here know had particular instances yes. a are Yes, love. acquisitive, buying

look to be customer and sell base is cross-sell new valuable as target acquisition well customer software both that the important and We got on of as We to haven't hugely of it's to at pulled any into to the able That's want however. our trigger software able our customer win base. those. its happened, and that's into course, We be customers. base,

their space app We you roll-ups base. and that's modeled we're MarTech that apps is companies are companies and are that and buying they are costs, we're buying end than different are and other the different stripping of can often in the other Bridgeline they conversion purely with see buying to doing on that app. dashboard will Those new those financially see and offers because average are the of strategy. base of of value be customer their so as them immediately top intelligent website grow their We're traffic and regard order products apps putting own customer that able revenue. that our the recommendations help to strength received the to an Bridgeline

an and dashboard So much base. reducing our strategic at perspective at customer looking that costs, we and just that inorganic doing growth a are strategy growth really instead accelerating leveraging from have more we looking our with but not cross-sells through and

happy a do with you think I you're pretty might million one. just $X.X quarter, have touch? level marketing do that increase about more it one expense, Sales quick a and or

to perspective. and But a slip think, little time feel right We're sales next really all marketing we're that. a sales yet, investing we are macroeconomic waters a for bit in you We by. increase and you've a our careful from we've marketing in our product about own have that sales features terms we're it, want We we has at. seen still got million our perilous slowdown calling and where when $X.X – in, not be of to year. don't people the is in that Well, to we're that approximately bottom-line to going spend XXXX. going although think the accelerate

front. sales So we're fast the moving on

great happy healthy look the Okay. have I and a year. forward XXXX up and to new Keep work.

Thank you. healthy to new Happy and you. year

moment One you. Thank please.

Our Carpio next Joseph from question of Leo comes Gunnar. the of line

open. line Your is

Hi, good afternoon, Ari. I actually questions. got two

Leo. Hi,

focused and the ask seeing hi, economy. the business right – headwind, Is economy's question product to as it is is first question impact as you're question tailwind your a right What's second And serving it regarding particular the or follow-up. The now? pipeline industry first any now? I'll on the

Okay.

in so excellent large stands that measurement much and we about have bit it's we're innovate but we're with think that we've are change our we're horrible double-digits felt these treat a products they and growing. real new to really cognizant fact, at we're little us that and I'm release to for great. and guys. our that's economy right teams so own we that in could that R&D a great even team have on conquest. Facebook challenge of our market making forward very And careful the but out and rang for the by headlines in even that is we press to today. relative looking with still a not that them is sales of it any bell our terms now, the is growing us, any headwinds earlier yet. industry and as winning and sure that right everybody great hiring a overall they're deals Okay, The market in team job to in of still left because Things a of these is we is on it of coming and and fortunate tell see latest thing layoffs next room one MarTech And challenges focused forth, and we

question regarding follow-up the then M&A. And Thanks. is

they the of So terms update in more are stability? wait of – us companies related but talked being you you or and you past an condition it in still how be may you're conditions give how interested the of XXXX what weighing criteria just more acquire, in market like market sidelines of till You to a has your terms choppy acquisitions? are just in as that about want having for

still started we be think three important the and ended multiple part last in think The an interested year. are held us. bit for year and we fiscal that terms them little strong or XXXX or to opportunity or to private public relative there the of acquisitions. year in is that revenue targets very we – for have times to, last cheaper revenue that, revenue, markets We who markets for looking next of as spoke the at We four a times five year two still a that's pretty three of

terms companies partners directly means bit that at or earn-out. So we're Salesforce, that payment between right for an that two less are Sitefinity, market And It’s that for critical challenge on million our with $X and and help two typically revenue of revenue companies earn-out first two that cap ISV times are think a our Optimizely, are BigCommerce, Those active focused sense. because us, the CloudCraze. retained most being of revenue apps in XX% are pick revenue times. grow is up makes the earn-out, in and initial we to can XX% that with $X we and million little looking to for over the revenue the a payment proportional we years terms not

going couple we we XXXX. targets deals the So to reasons is last one not come the done like deal right have and companies we we’ve to which in really seeing that the to structure still find month of of to sure quarters. the a us feel are every But accretive are make in I right that it’s

Well, and the quarter. right. congrats thanks, All Ari, for

Thank Happy you, Leo. holidays.

this questions further back management no for showing am I closing over the any time. Instructions] I'd to [Operator turn you. like at remarks. Thank to call

the as partners. support as us everybody, today. customers all appreciate well Well, our of our from you, really for thank shareholders from Great. our you, We joining and

on we our about for to Stay FY quarter prospects well, speaking forward holidays. of you and healthy February. 'XX first in ongoing excited growth again our business, happy are to call look conference We and the XXXX

conference. Thank you. today's Ladies and gentlemen, this does conclude

You may great a all Have day. disconnect.