Bridgeline Digital, Inc. Q1 FY2025 earnings call

• In Q1 FY2025, Bridgeline signed 28 license sales, adding $2.7 million in new contracts and $800,000 in annual contract value, with a 105-day sales cycle and 18% win rate on qualified leads.
• Launched 8 AI-based products last year, leading in AI-powered eCommerce search. Growth limited by marketing budget, so reallocating resources from R&D to sales and marketing.
• New customers include Grady Plus, John Dodge, Aftermarket Auto Parts Alliance, Mount of Your Health System, and a plumbing supplier. Partnerships with BigCommerce, Optimizely, Salesforce, OroCommerce, etc., to expand reach.
• Expanded marketing budget, targeting new B2B verticals with in-person events to generate leads and convert to customers.

Total revenue for the quarter ended December 31, 2024 was $3.8 million. Subscription license revenue was $3 million (80% of total revenue), down 1% from the prior year period. Services revenue was $700,000 (20% of total revenue), up 11% from the prior year period. Core revenue from Hawk Search products and eCommerce 360 embedding (including WooRank) was $2.1 million, with double-digit growth, net revenue retention of 107%, and CAC payback better than 20 months. Non-core products represent the balance of revenue, including most professional services, generating strong gross margins with minimal operating expenses.

• No formal revenue guidance provided. Confidence in growth from core product sales with a 105-day sales cycle, and reallocation of resources to sales and marketing to capitalize on market demand.

Q: Casey Ryan asked about the ratio of core revenue to services revenue and the sales pipeline.

A: Thomas Winhausen broke down that core revenue is $2.1 million with double-digit growth, and services are $700,000. Ari Kahn discussed the strong lead generation with 18% win rate on qualified leads and 105-day sales cycle.

Q: Howard Halpern inquired about operating expenses shift and partnership opportunities.

A: Ari Kahn said they'll hold operating expenses roughly where they are and invest more in marketing. On partnerships, mentioned ISVs, digital agencies, and joint customer conferences as key sales channels.