Group 1: Company Performance - 1-800-FLOWERS.COM (FLWS) is a leading e-commerce provider of floral products and gifts, with a significant customer base and revenue. The Zacks Consensus Estimate for its current year earnings has been revised downward by almost 87.9% over the last 60 days [1] - Bridgeline Digital (BLIN) is a digital engagement company that offers a platform integrating Web Content Management, e-commerce, e-marketing, Social Media management, and Web Analytics. The Zacks Consensus Estimate for its current year earnings has been revised downward by almost 12% over the last 60 days [2] - Avita Medical (RCEL) is a regenerative medicine company focused on developing and commercializing a technology platform for point-of-care autologous skin restoration. The Zacks Consensus Estimate for its current year earnings has been revised downward by 6.5% over the last 60 days [3] Group 2: Market Sentiment - All three companies have been added to the Zacks Rank 5 (Strong Sell) List, indicating a negative market sentiment towards their current performance and future earnings potential [1][2][3]

Core Insights - Bridgeline Digital, Inc. has announced that its HawkSearch platform has been selected by a leading plastics and industrial supplier to pilot advanced AI-powered search capabilities [1] Group 1: Product Features - HawkSearch Unified Search integrates Concept, Image, and Keyword search to enhance product discovery through natural language and visual queries [1] - The suite of advanced capabilities includes Unified Search, Smart Response, and Conversational Search [1]

Core Insights - Bridgeline Digital, Inc. has announced that its product HawkSearch will enhance product discovery for a major architectural décor provider [1] Company Overview - Bridgeline Digital, Inc. is recognized as a leader in AI-powered marketing technology [1] Product Features - HawkSearch was selected due to its advanced capabilities, particularly its Visual Search functionality [1] - The Visual Search feature enables shoppers to find products based on visual attributes not typically captured in traditional data fields [1]

Core Insights - Bridgeline Digital, Inc. (NASDAQ:BLIN) provides digital engagement solutions aimed at optimizing online presence and enhancing customer engagement in a competitive landscape [1] Financial Performance - Bridgeline Digital's Return on Invested Capital (ROIC) is -21.51%, which is significantly lower than its Weighted Average Cost of Capital (WACC) of 7.83%, indicating insufficient returns to cover capital costs [2][6] - The ROIC to WACC ratio for Bridgeline Digital is -2.75, reflecting poor capital efficiency [2] Peer Comparison - Compared to peers, Bridgeline Digital performs better than Marin Software and Verb Technology, which have ROIC to WACC ratios of -12.84 and -7.51, respectively, suggesting better capital management [3][6] - Carver Bancorp, Inc. has the highest ROIC to WACC ratio of -0.05 among the group, despite a negative ROIC of -1.81%, indicating it is closer to breaking even in capital efficiency [4] - NeuroMetrix, Inc. faces significant challenges with a ROIC of -61.36% and a WACC of 12.56%, resulting in a ROIC to WACC ratio of -4.89, further emphasizing the difficulties in generating returns above capital costs [5][6]

Core Insights - HawkSearch has been integrated into Unilog's tech partner ecosystem, enhancing the CX1 eCommerce platform with advanced search capabilities [1] Company Summary - Bridgeline Digital, Inc. (NASDAQ:BLIN) is recognized as a leader in AI-powered marketing technology [1] - The HawkSearch platform offers advanced search, personalization, and product recommendations as an add-on solution [1] Industry Context - The integration of HawkSearch into Unilog's ecosystem signifies a growing trend in eCommerce towards utilizing advanced search and personalization technologies to improve customer experience [1]

Core Insights - Bridgeline Digital, Inc. has announced that its HawkSearch platform will be utilized by a global electrical distribution systems provider to enhance their careers portal [1] Group 1: Company Overview - Bridgeline Digital, Inc. is recognized as a leader in AI-powered marketing technology [1] - The HawkSearch platform is designed to deliver advanced search and filtering capabilities [1] Group 2: Industry Impact - The implementation of HawkSearch will facilitate job seekers in discovering opportunities across 10 countries [1] - The platform aims to provide an intuitive and streamlined search experience within the careers portal [1]

[Financial and Operational Highlights](index=1&type=section&id=Financial%20and%20Operational%20Highlights) [Q3 FY2025 Financial Highlights](index=1&type=section&id=Q3%20FY2025%20Financial%20Highlights) Q3 FY2025 total revenue slightly decreased to $3.8 million, while subscription and licenses revenue grew 4% to $3.1 million, with core products showing 114% NRR and over 10% CAGR Q3 FY2025 Revenue Performance (vs. Q3 FY2024) | Metric | Q3 FY2025 | Q3 FY2024 | Change | | :--- | :--- | :--- | :--- | | Total Revenue | $3.8M | $3.9M | -2.6% | | Subscription & Licenses Revenue | $3.1M | $3.0M | +4.0% | | Services Revenue | $0.7M | $0.9M | -22.2% | - Revenue from Core products, including both subscription and services, grew by over **10% CAGR**[7](index=7&type=chunk) - Core product Net Revenue Retention (NRR) was **114%** for the quarter, indicating strong customer expansion and retention[7](index=7&type=chunk) [First 9 Months FY2025 Financial Highlights](index=1&type=section&id=First%209%20Months%20FY2025%20Financial%20Highlights) For the first nine months of FY2025, total revenue remained stable at $11.5 million, with subscription and licenses revenue increasing to $9.2 million First 9 Months FY2025 Revenue Performance (vs. First 9 Months FY2024) | Metric | 9M FY2025 | 9M FY2024 | Change | | :--- | :--- | :--- | :--- | | Total Revenue | $11.5M | $11.5M | 0% | | Subscription & Licenses Revenue | $9.2M | $9.1M | +1.1% | | Services Revenue | $2.3M | $2.4M | -4.2% | [Business Highlights](index=1&type=section&id=Business%20Highlights) Bridgeline accelerates customer acquisition through sales and marketing investments, securing new contracts, expanding customer relationships, enhancing AI products, and strengthening partner engagement [Sales Highlights](index=1&type=section&id=Sales%20Highlights) - The company is focusing resources from a recent capital raise on sales and marketing to accelerate new customer acquisitions[7](index=7&type=chunk) - In Q3, Bridgeline sold **16 new subscription contracts** with a total contract value of **$1.7 million**, adding over **$600,000 in Annual Recurring Revenue (ARR)**[7](index=7&type=chunk) - New contracts were signed with notable clients such as Venue Marketplace, Adentra, and Crest Fasteners[7](index=7&type=chunk) [Product Highlights](index=1&type=section&id=Product%20Highlights) - HawkSearch was ranked **1** in the 2025 Gartner® Critical Capabilities Report for the B2B Search Use Case, now accounting for over **60% of Bridgeline's revenue**[2](index=2&type=chunk)[7](index=7&type=chunk) - Introduced HawkSearch MCP (Model Context Protocol), enabling AI Agents to manage search through natural language prompts[7](index=7&type=chunk) - Launched AI Workbench and Advanced Analytics, allowing merchandisers to customize AI prompts without developer support and gain deeper visibility into search performance[7](index=7&type=chunk) [Partner Highlights](index=1&type=section&id=Partner%20Highlights) - Hosted the inaugural HawkSearch Virtual Summit, 'Insight25', which attracted **400 registrants** and featured guest speakers from BigCommerce, HP, and others[6](index=6&type=chunk)[8](index=8&type=chunk) - Co-hosted an exclusive partner event at B2B Online in Chicago with key ecosystem partners like Pimberly, BigCommerce, and Xngage[10](index=10&type=chunk) [Customer Highlights](index=2&type=section&id=Customer%20Highlights) - A Fortune 100 tech company signed a strategic retainer agreement to optimize global ecommerce search[9](index=9&type=chunk) - One of the nation's largest electrical distributors selected HawkSearch to power AI search across more than **seventy storefronts**[13](index=13&type=chunk) - A top five U.S. electrical distributor expanded its HawkSearch license to power **hundreds of ecommerce portals**[13](index=13&type=chunk) [Detailed Financial Results](index=3&type=section&id=Detailed%20Financial%20Results) [Financial Results – Third Quarter of Fiscal Year 2025](index=3&type=section&id=Financial%20Results%20%E2%80%93%20Third%20Quarter%20of%20Fiscal%20Year%202025) Q3 FY2025 total revenue slightly decreased to $3.8 million, gross margin contracted to 66%, and increased operating expenses resulted in a wider operating loss of $0.7 million and a net loss of $0.8 million Q3 FY2025 Income Statement Summary (vs. Q3 FY2024) | Metric | Q3 FY2025 | Q3 FY2024 | | :--- | :--- | :--- | | Total Revenue | $3.8M | $3.9M | | Gross Profit | $2.5M | $2.7M | | Gross Margin | 66% | 69% | | Operating Expenses | $3.2M | $3.1M | | Operating Loss | ($0.7M) | ($0.4M) | | Net Loss | ($0.8M) | ($0.3M) | - Subscription and licenses revenue constituted **81% of total revenue** for the quarter, up from 77% in the prior year period, indicating a continuing shift towards a subscription-based model[13](index=13&type=chunk) [Financial Results – First 9 Months of Fiscal Year 2025](index=3&type=section&id=Financial%20Results%20%E2%80%93%20First%209%20Months%20of%20Fiscal%20Year%202025) For the first nine months of FY2025, total revenue was flat at $11.5 million, gross margin declined to 67%, and increased operating expenses led to a wider operating loss of $1.9 million and a net loss of $2.2 million First 9 Months FY2025 Income Statement Summary (vs. First 9 Months FY2024) | Metric | 9M FY2025 | 9M FY2024 | | :--- | :--- | :--- | | Total Revenue | $11.5M | $11.5M | | Gross Profit | $7.7M | $7.8M | | Gross Margin | 67% | 68% | | Operating Expenses | $9.6M | $9.3M | | Operating Loss | ($1.9M) | ($1.5M) | | Net Loss | ($2.2M) | ($1.5M) | - Subscription and licenses revenue represented **80% of total revenue** for the nine-month period, compared to 79% in the same period last year[13](index=13&type=chunk) [Financial Statements and Reconciliations](index=7&type=section&id=Financial%20Statements%20and%20Reconciliations) [Consolidated Balance Sheets](index=7&type=section&id=Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets were $16.1 million, total liabilities $6.2 million, cash improved to $2.1 million, and total stockholders' equity was $9.9 million Key Balance Sheet Items (in thousands) | Account | June 30, 2025 | Sept 30, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $2,103 | $1,390 | | Total current assets | $4,085 | $2,947 | | Total assets | $16,148 | $15,602 | | Total current liabilities | $5,285 | $4,728 | | Total liabilities | $6,199 | $5,596 | | Total stockholders' equity | $9,949 | $10,006 | [Consolidated Statements of Operations](index=8&type=section&id=Consolidated%20Statements%20of%20Operations) Consolidated statements show a net loss of $789,000 for Q3 2025 and $2,153,000 for the first nine months, resulting in basic and diluted EPS losses of $0.07 and $0.23 respectively Net Loss and EPS | Period | Net Loss | Basic & Diluted EPS | | :--- | :--- | :--- | | **Three Months Ended June 30, 2025** | ($789k) | ($0.07) | | Three Months Ended June 30, 2024 | ($305k) | ($0.03) | | **Nine Months Ended June 30, 2025** | ($2,153k) | ($0.23) | | Nine Months Ended June 30, 2024 | ($1,529k) | ($0.15) | [Reconciliation of GAAP to Non-GAAP Results](index=9&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Results) Non-GAAP Adjusted EBITDA was a loss of $330,000 for Q3 2025 and $762,000 for the nine-month period, with reconciliation adjusting for stock-based compensation, amortization, and restructuring charges Adjusted EBITDA Reconciliation Summary (in thousands) | Period | GAAP Net Loss | Adjusted EBITDA | | :--- | :--- | :--- | | **Three Months Ended June 30, 2025** | ($789) | ($330) | | Three Months Ended June 30, 2024 | ($305) | $3 | | **Nine Months Ended June 30, 2025** | ($2,153) | ($762) | | Nine Months Ended June 30, 2024 | ($1,529) | ($197) | [Other Information](index=4&type=section&id=Other%20Information) [Conference Call](index=4&type=section&id=Conference%20Call) Bridgeline Digital will host a conference call on August 14, 2025, at 4:30 p.m. ET to discuss Q3 FY2025 results, led by the CEO and CFO - A conference call to discuss Q3 2025 results is scheduled for **August 14, 2025, at 4:30 p.m. ET**[14](index=14&type=chunk) [Non-GAAP Financial Measures and Other Terms](index=5&type=section&id=Non-GAAP%20Financial%20Measures%20and%20Other%20Terms) This section defines Non-GAAP Adjusted EBITDA as a supplemental performance metric and clarifies key terms like 'Core Product revenue' and 'Net Revenue Retention (NRR)' for investor context - Adjusted EBITDA is defined as earnings before interest, taxes, depreciation, amortization, stock-based compensation, and other specified non-cash or non-recurring items[17](index=17&type=chunk) - Core Product revenue includes all subscription license and services revenue from HawkSearch, specific WooRank licenses, and AccessiBe[20](index=20&type=chunk) - Net Revenue Retention (NRR) is defined as the current period's trailing twelve months Monthly Recurring Revenue (MRR), including cross-sales and net renewals, divided by the previous period's trailing twelve months MRR[20](index=20&type=chunk) [Safe Harbor for Forward-Looking Statements](index=5&type=section&id=Safe%20Harbor%20for%20Forward-Looking%20Statements) The report contains forward-looking statements based on current expectations, subject to risks and uncertainties as detailed under the Private Securities Litigation Reform Act of 1995 - The report contains forward-looking statements that are based on current expectations and are subject to risks, uncertainties, and assumptions that could cause actual results to differ materially[21](index=21&type=chunk)

Core Viewpoint - Bridgeline Digital, Inc. reported a quarterly loss of $0.07 per share, which was worse than the Zacks Consensus Estimate of a loss of $0.05, marking a significant earnings surprise of -40.00% [1] Financial Performance - The company posted revenues of $3.85 million for the quarter ended June 2025, missing the Zacks Consensus Estimate by 1.64% and down from $3.94 million a year ago [2] - Over the last four quarters, Bridgeline Digital has surpassed consensus EPS estimates only once [2] Stock Performance - Since the beginning of the year, Bridgeline Digital shares have lost approximately 2.5%, contrasting with the S&P 500's gain of 10% [3] - The current Zacks Rank for the stock is 3 (Hold), indicating expected performance in line with the market in the near future [6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is -$0.05 on revenues of $3.94 million, and for the current fiscal year, it is -$0.25 on revenues of $15.51 million [7] - The trend of estimate revisions for Bridgeline Digital was mixed ahead of the earnings release, which could change following the recent report [6] Industry Context - The Internet - Services industry, to which Bridgeline Digital belongs, is currently ranked in the top 40% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8]

Financial Data and Key Metrics Changes - Total revenue for Q3 2025 was $3.8 million, a decrease from $3.9 million in the prior year period [17] - Subscription license revenue was $3.1 million, up from $3.0 million in the prior year, accounting for 81% of total revenue [17][18] - Services revenue decreased to $700,000 from $900,000 in the prior year, representing 19% of total revenue [18] - Gross profit was $2.5 million with a gross profit margin of 66%, down from 72% in the prior year [18] - Net loss for the quarter was $800,000 compared to a net loss of $300,000 in the prior year [19] - Adjusted EBITDA was negative $330,000 compared to positive $3,000 in the prior year [19] Business Line Data and Key Metrics Changes - Core products now account for over 60% of total revenue, with double-digit growth from Hawk Search [6][15] - Hawk Search has a net revenue retention rate of 114%, indicating strong customer satisfaction and expansion [7][15] - Average initial contract for Hawk Search customers is $25,000 ARR, with additional features bringing total to $75,000 ARR [8] Market Data and Key Metrics Changes - Hawk Search was ranked as the number one B2B search software provider by Gartner [8] - The company added over 20 new customers and sold more than 30 licenses to existing customers [6] Company Strategy and Development Direction - The company is focusing on revenue growth, product innovation, and customer success [20] - Increased marketing budget from $250,000 to $500,000 per quarter to enhance lead generation [10][11] - The strategy includes leveraging partnerships and co-hosted events to generate leads more effectively [12] Management's Comments on Operating Environment and Future Outlook - Management expects Hawk Search to continue growing and positively impacting overall company growth by 2026 [15][55] - The company is in a favorable position within the B2B market and is capitalizing on advancements in AI technology [55] Other Important Information - As of June 30, 2025, the company had cash of over $2.1 million and total assets of $16.1 million [19][20] - Total liabilities were $6.2 million, with no significant debt obligations [20] Q&A Session Summary Question: How has your customer acquisition strategy evolved? - The company has shifted to investing two-thirds of its budget in known lead sources, focusing on campaigns that generate the best leads [25] Question: Where does your pipeline stand in regards to reaching new customers or expanding within existing customers? - Approximately 60% of sales have been to existing customers, indicating strong product value and customer retention [27] Question: Are you getting any customer feedback about the new technology enhancements? - Most product releases were driven by customer feedback, leading to innovations that meet customer needs [29] Question: Should we expect sales and marketing expenses to continue at the current level? - The company plans to maintain the increased marketing spend of $500,000 per quarter, as it is producing positive results [35] Question: What are competitors doing in response to Hawk Search's success? - Competitors are offering free professional services to compete, but this approach is not sustainable long-term [38][39] Question: Is there significant customer concentration within Hawk Search? - No single customer contributes 5% of revenues, indicating a diversified customer base [49]

PART I—FINANCIAL INFORMATION [Item 1. Condensed Consolidated Financial Statements](index=5&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements) Bridgeline Digital, Inc.'s unaudited condensed consolidated financial statements and notes for periods ended June 30, 2025, and September 30, 2024 [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Condensed Consolidated Balance Sheet Highlights (in thousands) | Metric (in thousands) | June 30, 2025 | September 30, 2024 | Change | % Change | | :-------------------- | :------------ | :----------------- | :----- | :------- | | Total Assets | $16,148 | $15,602 | $546 | 3.5% | | Total Liabilities | $6,199 | $5,596 | $603 | 10.8% | | Total Stockholders' Equity | $9,949 | $10,006 | $(57) | -0.6% | - Cash and cash equivalents increased by **$713 thousand** from **$1,390 thousand** as of September 30, 2024, to **$2,103 thousand** as of June 30, 2025[14](index=14&type=chunk) - Accounts receivable, net, increased by **$113 thousand** from **$1,288 thousand** as of September 30, 2024, to **$1,401 thousand** as of June 30, 2025[14](index=14&type=chunk) [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Condensed Consolidated Statements of Operations (Three Months Ended June 30, 2025 and 2024, in thousands) | Metric (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change | % Change | | :-------------------- | :--------------------------- | :--------------------------- | :----- | :------- | | Total Net Revenue | $3,846 | $3,936 | $(90) | -2.3% | | Gross Profit | $2,548 | $2,706 | $(158) | -5.8% | | Loss from Operations | $(689) | $(383) | $(306) | 79.9% | | Net Loss | $(789) | $(305) | $(484) | 158.7% | | Basic Net Loss Per Share | $(0.07) | $(0.03) | $(0.04)| 133.3% | Condensed Consolidated Statements of Operations (Nine Months Ended June 30, 2025 and 2024, in thousands) | Metric (in thousands) | 9 Months Ended June 30, 2025 | 9 Months Ended June 30, 2024 | Change | % Change | | :-------------------- | :--------------------------- | :--------------------------- | :----- | :------- |\ | Total Net Revenue | $11,512 | $11,495 | $17 | 0.1% | | Gross Profit | $7,699 | $7,782 | $(83) | -1.1% | | Loss from Operations | $(1,945) | $(1,537) | $(408) | 26.5% | | Net Loss | $(2,153) | $(1,529) | $(624) | 40.8% | | Basic Net Loss Per Share | $(0.23) | $(0.15) | $(0.08)| 53.3% | [Condensed Consolidated Statements of Comprehensive Loss](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Loss) Condensed Consolidated Statements of Comprehensive Loss (Three Months Ended June 30, 2025 and 2024, in thousands) | Metric (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change | % Change | | :-------------------- | :--------------------------- | :--------------------------- | :----- | :------- | | Net Loss | $(789) | $(305) | $(484) | 158.7% | | Net change in foreign currency translation adjustment | $(40) | $11 | $(51) | -463.6% | | Comprehensive Loss | $(829) | $(294) | $(535) | 182.0% | Condensed Consolidated Statements of Comprehensive Loss (Nine Months Ended June 30, 2025 and 2024, in thousands) | Metric (in thousands) | 9 Months Ended June 30, 2025 | 9 Months Ended June 30, 2024 | Change | % Change | | :-------------------- | :--------------------------- | :--------------------------- | :----- | :------- | | Net Loss | $(2,153) | $(1,529) | $(624) | 40.8% | | Net change in foreign currency translation adjustment | $22 | $(14) | $36 | -257.1% | | Comprehensive Loss | $(2,131) | $(1,543) | $(588) | 38.1% | [Condensed Consolidated Statements of Stockholders' Equity](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) Condensed Consolidated Statements of Stockholders' Equity Highlights (in thousands) | Metric (in thousands) | As of Oct 1, 2024 | As of June 30, 2025 | Change | % Change | | :-------------------- | :---------------- | :------------------ | :----- | :------- | | Total Stockholders' Equity | $10,006 | $9,949 | $(57) | -0.6% | | Common Stock Shares Outstanding | 10,417,609 | 12,112,068 | 1,694,459 | 16.3% | | Accumulated Deficit | $(91,538) | $(93,691) | $(2,153)| 2.4% | - The company redeemed all **350 shares** of Series C Convertible Preferred Stock on March 5, 2025, for **$331 thousand**, which was recognized as a reduction in additional paid-in capital[60](index=60&type=chunk)[61](index=61&type=chunk) - Issuance of common stock, net of offering costs, contributed **$1,983 thousand** to additional paid-in capital during the nine months ended June 30, 2025[23](index=23&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Condensed Consolidated Statements of Cash Flows (Nine Months Ended June 30, 2025 and 2024, in thousands) | Metric (in thousands) | 9 Months Ended June 30, 2025 | 9 Months Ended June 30, 2024 | Change | % Change | | :-------------------- | :--------------------------- | :--------------------------- | :----- | :------- | | Net Cash Used in Operating Activities | $(759) | $(982) | $223 | -22.7% | | Net Cash Used in Investing Activities | $(12) | $(24) | $12 | -50.0% | | Net Cash Provided by (Used in) Financing Activities | $1,475 | $(189) | $1,664 | -880.4% | | Net Increase (Decrease) in Cash and Cash Equivalents | $713 | $(1,177) | $1,890 | -160.6% | | Cash and Cash Equivalents at End of Period | $2,103 | $1,200 | $903 | 75.3% | - Cash provided by financing activities significantly increased due to **$1.983 million** from common stock issuance, partially offset by Series C Preferred Stock redemption and long-term debt payments[27](index=27&type=chunk)[153](index=153&type=chunk) [Notes to Unaudited Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) [1. Description of Business](index=11&type=section&id=1.%20Description%20of%20Business) - Bridgeline Digital is an AI-powered marketing technology company offering cloud-based SaaS and perpetual licensing software products like HawkSearch, Celebros Search, Woorank, Unbound, TruPresence, and OrchestraCMS[29](index=29&type=chunk)[30](index=30&type=chunk)[31](index=31&type=chunk) - The company has historically incurred operating losses and relies on cash on hand and financing activities to fund operations and product development, maintaining tight control over discretionary spending for fiscal year 2025[34](index=34&type=chunk) - The company completed a registered direct offering in March 2025, issuing **1,000,000 shares** of common stock for gross proceeds of approximately **$1.5 million** (**$1.3 million** net), and a private placement of **473,979 unregistered shares** for gross proceeds of approximately **$720 thousand** (**$700 thousand** net)[36](index=36&type=chunk)[37](index=37&type=chunk)[38](index=38&type=chunk) [2. Summary of Significant Accounting Policies](index=13&type=section&id=2.%20Summary%20of%20Significant%20Accounting%20Policies) - The condensed consolidated financial statements are prepared in accordance with U.S. GAAP and include all adjustments necessary for fair presentation, with operating results for the interim periods not necessarily indicative of the full fiscal year[40](index=40&type=chunk) - The company is evaluating the impact of recently issued ASUs on Segment Reporting (ASU 2023-07), Income Taxes (ASU 2023-09), and Expense Disaggregation Disclosures (ASU 2024-03), expecting enhanced disclosures[41](index=41&type=chunk)[42](index=42&type=chunk)[43](index=43&type=chunk) [3. Accounts Receivable](index=14&type=section&id=3.%20Accounts%20Receivable) Accounts Receivable, Net (in thousands) | Metric (in thousands) | As of June 30, 2025 | As of September 30, 2024 | Change | % Change | | :-------------------- | :------------------ | :----------------------- | :----- | :------- | | Accounts receivable | $1,710 | $1,551 | $159 | 10.3% | | Allowance for credit losses | $(309) | $(263) | $(46) | 17.5% | | Accounts receivable, net | $1,401 | $1,288 | $113 | 8.8% | Allowance for Credit Losses Activity (in thousands) | Allowance for Credit Losses Activity (in thousands) | :----- | | :------------------------------------ | :----- | | Balance as of October 1, 2024 | $263 | | Credit loss expense (recovery) | $135 | | Write-off/adjustments | $(89) | | Balance as of June 30, 2025 | $309 | [4. Fair Value Measurement and Fair Value of Financial Instruments](index=14&type=section&id=4.%20Fair%20Value%20Measurement%20and%20Fair%20Value%20of%20Financial%20Instruments) - The company's warrant liabilities are measured at fair value using Level 3 inputs and a Monte Carlo option-pricing model, considering volatilities of comparable public companies and company-specific volatility[51](index=51&type=chunk) Warrant Liabilities (in thousands) | Warrant Liabilities (in thousands) | As of June 30, 2025 | As of September 30, 2024 | Change | % Change | | :--------------------------------- | :------------------ | :----------------------- | :----- | :------- | | Montage | $4 | $10 | $(6) | -60.0% | | Series D | $150 | $88 | $62 | 70.5% | | Total Warrant Liabilities | $154 | $98 | $56 | 57.1% | Change in Fair Value of Warrant Liabilities (in thousands) | Change in Fair Value of Warrant Liabilities (in thousands) | :----- | | :------------------------------------------------- | :----- | | 3 Months Ended June 30, 2025 Gain | $31 | | 3 Months Ended June 30, 2024 Gain | $88 | | 9 Months Ended June 30, 2025 Loss | $(58) | | 9 Months Ended June 30, 2024 Gain | $81 | [5. Intangible Assets](index=16&type=section&id=5.%20Intangible%20Assets) Intangible Assets, Net (in thousands) | Intangible Assets, Net (in thousands) | As of June 30, 2025 | As of September 30, 2024 | Change | % Change | | :------------------------------------ | :------------------ | :----------------------- | :----- | :------- | | Domain and trade names | $532 | $572 | $(40) | -7.0% | | Customer related | $2,669 | $3,048 | $(379) | -12.4% | | Technology | $158 | $288 | $(130) | -45.1% | | Balance at end of period | $3,359 | $3,908 | $(549) | -14.1% | - Total amortization expense for intangible assets was **$549 thousand** for the nine months ended June 30, 2025, a decrease from **$796 thousand** in the prior year, primarily due to certain intangible assets becoming fully amortized[54](index=54&type=chunk)[139](index=139&type=chunk) [6. Accrued Liabilities](index=17&type=section&id=6.%20Accrued%20Liabilities) Accrued Liabilities (in thousands) | Accrued Liabilities (in thousands) | As of June 30, 2025 | As of September 30, 2024 | Change | % Change | | :--------------------------------- | :------------------ | :----------------------- | :----- | :------- | | Compensation and benefits | $712 | $405 | $307 | 75.8% | | Professional fees | $247 | $268 | $(21) | -7.8% | | Insurance | $34 | $- | $34 | N/A | | Other | $197 | $315 | $(118) | -37.5% | | Balance at end of period | $1,190 | $988 | $202 | 20.4% | [7. Long-term Debt](index=18&type=section&id=7.%20Long-term%20Debt) Long-term Debt (in thousands) | Long-term Debt (in thousands) | As of June 30, 2025 | As of September 30, 2024 | Change | % Change | | :---------------------------- | :------------------ | :----------------------- | :----- | :------- | | Term loan payable | $277 | $325 | $(48) | -14.8% | | Seller's note payable | $71 | $201 | $(130) | -64.7% | | Total debt | $348 | $526 | $(178) | -33.8% | | Less: current portion | $(156) | $(282) | $126 | -44.7% | | Long-term debt, net of current portion | $192 | $244 | $(52) | -21.3% | Future Maturities of Long-term Debt (in thousands) | Future Maturities of Long-term Debt (in thousands) | :----- | | :-------------------- | :----- | | Fiscal year 2025 (remaining) | $93 | | Fiscal year 2026 | $85 | | Fiscal year 2027 | $85 | | Fiscal year 2028 | $85 | | Total long-term debt | $348 | [8. Stockholders' Equity](index=18&type=section&id=8.%20Stockholders'%20Equity) - On March 5, 2025, the company redeemed all **350 shares** of Series C Preferred Stock, along with placement agent warrants and stock options, for an aggregate purchase price of **$332.5 thousand**, resulting in no Series C Preferred Stock outstanding as of June 30, 2025[60](index=60&type=chunk)[61](index=61&type=chunk) Stock-based Compensation Expense (in thousands) | Stock-based Compensation Expense (in thousands) | :----- | | :-------------------------------- | :----- | | 3 Months Ended June 30, 2025 | $274 | | 3 Months Ended June 30, 2024 | $127 | | 9 Months Ended June 30, 2025 | $488 | | 9 Months Ended June 30, 2024 | $421 | - As of June 30, 2025, there were **1,799,477 stock options** outstanding and **861,533 stock warrants** outstanding, with **208 thousand shares** available for future issuance under the 2016 Stock Incentive Plan[62](index=62&type=chunk)[75](index=75&type=chunk) [9. Net Loss Per Share Attributable to Common Shareholders](index=23&type=section&id=9.%20Net%20Loss%20Per%20Share%20Attributable%20to%20Common%20Shareholders) Net Loss Per Share Attributable to Common Shareholders (Three Months Ended June 30, 2025 and 2024, in thousands, except per share data) | Metric (in thousands, except per share data) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change | % Change | | :------------------------------------------- | :--------------------------- | :--------------------------- | :----- | :------- | | Net loss applicable to common shareholders | $(789) | $(305) | $(484) | 158.7% | | Basic net loss per share | $(0.07) | $(0.03) | $(0.04)| 133.3% | | Diluted net loss per share | $(0.07) | $(0.03) | $(0.04)| 133.3% | Net Loss Per Share Attributable to Common Shareholders (Nine Months Ended June 30, 2025 and 2024, in thousands, except per share data) | Metric (in thousands, except per share data) | 9 Months Ended June 30, 2025 | 9 Months Ended June 30, 2024 | Change | % Change | | :------------------------------------------- | :--------------------------- | :--------------------------- | :----- | :------- | | Net loss applicable to common shareholders | $(2,484) | $(1,529) | $(955) | 62.5% | | Basic net loss per share | $(0.23) | $(0.15) | $(0.08)| 53.3% | | Diluted net loss per share | $(0.23) | $(0.15) | $(0.08)| 53.3% | - Potential common stock equivalents, including stock options and warrants, were excluded from diluted net loss per share computation for both periods as their inclusion would have been anti-dilutive[76](index=76&type=chunk)[77](index=77&type=chunk) [10. Revenues and Other Related Items](index=23&type=section&id=10.%20Revenues%20and%20Other%20Related%20Items) Revenue by Geography (Three Months Ended June 30, 2025 and 2024, in thousands) | Revenue by Geography (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change | % Change | | :---------------------------------- | :--------------------------- | :--------------------------- | :----- | :------- | | United States | $3,221 | $3,236 | $(15) | -0.5% | | International | $625 | $701 | $(76) | -10.8% | | Total | $3,846 | $3,936 | $(90) | -2.3% | Revenue by Type (Three Months Ended June 30, 2025 and 2024, in thousands) | Revenue by Type (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change | % Change | | :----------------------------- | :--------------------------- | :--------------------------- | :----- | :------- | | Subscription | $2,573 | $2,666 | $(93) | -3.5% | | Maintenance | $104 | $105 | $(1) | -1.0% | | Hosting | $445 | $242 | $203 | 83.9% | | Digital engagement services | $724 | $923 | $(199) | -21.6% | | Total | $3,846 | $3,936 | $(90) | -2.3% | - Deferred revenue (current portion) decreased from **$2,189 thousand** as of October 1, 2024, to **$2,176 thousand** as of June 30, 2025[83](index=83&type=chunk) [11. Income Taxes](index=25&type=section&id=11.%20Income%20Taxes) - The provision for income taxes remained consistent at **$5 thousand** for the three months ended June 30, 2025 and 2024, and **$15 thousand** for the nine months ended June 30, 2025 and 2024[84](index=84&type=chunk) - The company maintains a valuation allowance against its net deferred tax assets, as net operating loss carryforwards are estimated to offset potential taxable income[84](index=84&type=chunk)[145](index=145&type=chunk) [12. Leases](index=25&type=section&id=12.%20Leases) Net Lease Costs (Three Months Ended June 30, 2025 and 2024, in thousands) | Net Lease Costs (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change | % Change | | :----------------------------- | :--------------------------- | :--------------------------- | :----- | :------- | | Operating lease cost | $45 | $50 | $(5) | -10.0% | | Variable lease cost | $17 | $16 | $1 | 6.3% | | Sublease income, net | $(18) | $(18) | $0 | 0.0% | | Total | $44 | $48 | $(4) | -8.3% | - Cash paid for lease liabilities was **$113 thousand** for the nine months ended June 30, 2025, compared to **$140 thousand** in the prior year[88](index=88&type=chunk) - As of June 30, 2025, the weighted average remaining lease term was **2.2 years** with a weighted average discount rate of **10.9%**[88](index=88&type=chunk) [13. Commitments and Contingencies](index=27&type=section&id=13.%20Commitments%20and%20Contingencies) - The company provides warranties for its technology solutions, but its estimate of exposure to warranty-related claims is immaterial as of June 30, 2025, and September 30, 2024[91](index=91&type=chunk)[92](index=92&type=chunk) - The company's agreements generally include indemnification clauses for third-party intellectual property infringement and product liability, but no significant claims or losses have been experienced[93](index=93&type=chunk) - As of June 30, 2025, the company was not involved in any material legal proceedings beyond those previously disclosed[94](index=94&type=chunk)[183](index=183&type=chunk) [14. Related Party Transactions](index=28&type=section&id=14.%20Related%20Party%20Transactions) - Brandon Ross, a Class III Director and Head of Placements at WestPark Capital, Inc., was designated warrants to purchase **28,000 shares** of common stock in March 2025[95](index=95&type=chunk)[96](index=96&type=chunk) - Michael Ketslakh, a Class II Director, participated in a private placement and purchased **394,736 unregistered shares**[98](index=98&type=chunk)[99](index=99&type=chunk) - Michael Taglich resigned from the Board of Directors on February 10, 2025, preceding the redemption of Series C Preferred Stock[97](index=97&type=chunk) [15. Subsequent Events](index=28&type=section&id=15.%20Subsequent%20Events) - The company evaluated subsequent events through the filing date and found no material events requiring adjustment or disclosure in the interim condensed consolidated financial statements[100](index=100&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=29&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial condition, results of operations, liquidity, and capital resources for the three and nine months ended June 30, 2025 [Overview](index=29&type=section&id=Overview) - Bridgeline Digital is an AI-powered marketing technology company offering SaaS and perpetual license software products designed to increase online revenue for businesses[103](index=103&type=chunk)[104](index=104&type=chunk) - The company's product suite includes HawkSearch, Celebros Search, Woorank, Unbound, TruPresence, and OrchestraCMS, catering to various digital engagement needs[104](index=104&type=chunk) - Bridgeline operates globally with its corporate office in Woburn, Massachusetts, and subsidiaries in India, Canada, and Belgium[105](index=105&type=chunk)[106](index=106&type=chunk) [Customer Information](index=30&type=section&id=Customer%20Information) - The company currently serves over **2,000 active customers**[107](index=107&type=chunk) - No single customer accounted for more than **10% of total revenue** for the three and nine months ended June 30, 2025 and 2024[107](index=107&type=chunk) [Results of Operations for the Three and Nine Months Ended June 30, 2025 compared to the Three and Nine Months Ended June 30, 2024](index=31&type=section&id=Results%20of%20Operations%20for%20the%20Three%20and%20Nine%20Months%20Ended%20June%2030%2C%202025%20compared%20to%20the%20Three%20and%20Nine%20Months%20Ended%20June%2030%2C%202024) [Revenue](index=32&type=section&id=Revenue) Revenue by Source (Three Months Ended June 30, 2025 and 2024, in thousands) | Revenue Source (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change | % Change | | :---------------------------- | :--------------------------- | :--------------------------- | :----- | :------- | | Subscription and perpetual licenses | $3,122 | $3,013 | $109 | 3.6% | | Digital engagement services | $724 | $923 | $(199) | -21.6% | | Total Net Revenue | $3,846 | $3,936 | $(90) | -2.3% | Revenue by Source (Nine Months Ended June 30, 2025 and 2024, in thousands) | Revenue Source (in thousands) | 9 Months Ended June 30, 2025 | 9 Months Ended June 30, 2024 | Change | % Change | | :---------------------------- | :--------------------------- | :--------------------------- | :----- | :------- | | Subscription and perpetual licenses | $9,222 | $9,109 | $113 | 1.2% | | Digital engagement services | $2,290 | $2,386 | $(96) | -4.0% | | Total Net Revenue | $11,512 | $11,495 | $17 | 0.1% | - Digital engagement services revenue decreased for the three months ended June 30, 2025, primarily due to additional services volumes, including a large customer project, in the prior year period[116](index=116&type=chunk) [Cost of Revenue](index=32&type=section&id=Cost%20of%20Revenue) Cost of Revenue by Source (Three Months Ended June 30, 2025 and 2024, in thousands) | Cost of Revenue (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change | % Change | | :----------------------------- | :--------------------------- | :--------------------------- | :----- | :------- | | Subscription and perpetual licenses | $934 | $846 | $88 | 10.4% | | Digital engagement services | $364 | $384 | $(20) | -5.2% | | Total Cost of Revenue | $1,298 | $1,230 | $68 | 5.5% | Cost of Revenue by Source (Nine Months Ended June 30, 2025 and 2024, in thousands) | Cost of Revenue (in thousands) | 9 Months Ended June 30, 2025 | 9 Months Ended June 30, 2024 | Change | % Change | | :----------------------------- | :--------------------------- | :--------------------------- | :----- | :------- | | Subscription and perpetual licenses | $2,694 | $2,533 | $161 | 6.4% | | Digital engagement services | $1,119 | $1,180 | $(61) | -5.2% | | Total Cost of Revenue | $3,813 | $3,713 | $100 | 2.7% | - The increase in cost of subscription and perpetual licenses is primarily due to higher server costs, while the decrease in cost of digital engagement services is mainly due to lower personnel costs[120](index=120&type=chunk)[124](index=124&type=chunk) [Gross Profit](index=34&type=section&id=Gross%20Profit) Gross Profit (Three Months Ended June 30, 2025 and 2024, in thousands) | Gross Profit (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change | % Change | | :-------------------------- | :--------------------------- | :--------------------------- | :----- | :------- | | Gross Profit | $2,548 | $2,706 | $(158) | -5.8% | | Gross Profit Margin | 66% | 69% | -3% | -4.3% | Gross Profit (Nine Months Ended June 30, 2025 and 2024, in thousands) | Gross Profit (in thousands) | 9 Months Ended June 30, 2025 | 9 Months Ended June 30, 2024 | Change | % Change | | :-------------------------- | :--------------------------- | :--------------------------- | :----- | :------- | | Gross Profit | $7,699 | $7,782 | $(83) | -1.1% | | Gross Profit Margin | 67% | 68% | -1% | -1.5% | [Operating Expenses](index=34&type=section&id=Operating%20Expenses) Operating Expenses (Three Months Ended June 30, 2025 and 2024, in thousands) | Operating Expense (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change | % Change | | :------------------------------- | :--------------------------- | :--------------------------- | :----- | :------- | | Sales and marketing | $1,297 | $949 | $348 | 36.7% | | General and administrative | $774 | $878 | $(104) | -11.8% | | Research and development | $961 | $1,008 | $(47) | -4.7% | | Depreciation and amortization | $195 | $201 | $(6) | -3.0% | | Restructuring and acquisition related expenses | $10 | $53 | $(43) | -81.1% | | Total Operating Expenses | $3,237 | $3,089 | $148 | 4.8% | Operating Expenses (Nine Months Ended June 30, 2025 and 2024, in thousands) | Operating Expense (in thousands) | 9 Months Ended June 30, 2025 | 9 Months Ended June 30, 2024 | Change | % Change | | :------------------------------- | :--------------------------- | :--------------------------- | :----- | :------- | | Sales and marketing | $3,355 | $2,803 | $552 | 19.7% | | General and administrative | $2,343 | $2,425 | $(82) | -3.4% | | Research and development | $3,144 | $3,138 | $6 | 0.2% | | Depreciation and amortization | $585 | $885 | $(300) | -33.9% | | Restructuring and acquisition related expenses | $217 | $68 | $149 | 219.1% | | Total Operating Expenses | $9,644 | $9,319 | $325 | 3.5% | - Sales and marketing expenses increased due to higher marketing spend on leads and conferences, and higher personnel costs for the nine-month period[129](index=129&type=chunk)[130](index=130&type=chunk) - Depreciation and amortization decreased for the nine-month period primarily because certain intangible assets became fully amortized[139](index=139&type=chunk) [Loss from Operations](index=36&type=section&id=Loss%20from%20Operations) Loss from Operations (Three Months Ended June 30, 2025 and 2024, in thousands) | Loss from Operations (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change | % Change | | :---------------------------------- | :--------------------------- | :--------------------------- | :----- | :------- | | Loss from Operations | $(689) | $(383) | $(306) | 79.9% | Loss from Operations (Nine Months Ended June 30, 2025 and 2024, in thousands) | Loss from Operations (in thousands) | 9 Months Ended June 30, 2025 | 9 Months Ended June 30, 2024 | Change | % Change | | :---------------------------------- | :--------------------------- | :--------------------------- | :----- | :------- | | Loss from Operations | $(1,945) | $(1,537) | $(408) | 26.5% | [Interest expense and other, net](index=36&type=section&id=Interest%20expense%20and%20other%2C%20net) Interest Expense and Other, Net (Three Months Ended June 30, 2025 and 2024, in thousands) | Interest Expense and Other, Net (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change | % Change | | :--------------------------------------------- | :--------------------------- | :--------------------------- | :----- | :------- | | Interest expense and other, net | $(126) | $(5) | $(121) | 2420.0% | Interest Expense and Other, Net (Nine Months Ended June 30, 2025 and 2024, in thousands) | Interest Expense and Other, Net (in thousands) | 9 Months Ended June 30, 2025 | 9 Months Ended June 30, 2024 | Change | % Change | | :--------------------------------------------- | :--------------------------- | :--------------------------- | :----- | :------- | | Interest expense and other, net | $(135) | $(58) | $(77) | 132.8% | - The increase in interest expense and other, net, is primarily due to stock-based compensation from restricted stock issued to board members in the three months ended June 30, 2025[143](index=143&type=chunk) [Change in fair value of warrant liabilities](index=36&type=section&id=Change%20in%20fair%20value%20of%20warrant%20liabilities) Change in Fair Value of Warrant Liabilities (in thousands) | Change in Fair Value of Warrant Liabilities (in thousands) | :----- | | :------------------------------------------------- | :----- | | 3 Months Ended June 30, 2025 Gain | $31 | | 3 Months Ended June 30, 2024 Gain | $88 | | 9 Months Ended June 30, 2025 Loss | $(58) | | 9 Months Ended June 30, 2024 Gain | $81 | [Provision for Income Taxes](index=36&type=section&id=Provision%20for%20Income%20Taxes) - The provision for income taxes remained constant at **$5 thousand** for the three months and **$15 thousand** for the nine months ended June 30, 2025 and 2024, respectively[110](index=110&type=chunk)[145](index=145&type=chunk) - The company maintains a valuation allowance against its net deferred tax assets due to sufficient net operating loss carryforwards to offset potential taxable income[145](index=145&type=chunk) [Adjusted EBITDA](index=36&type=section&id=Adjusted%20EBITDA) Adjusted EBITDA (Three Months Ended June 30, 2025 and 2024, in thousands) | Adjusted EBITDA (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change | % Change | | :----------------------------- | :--------------------------- | :--------------------------- | :----- | :------- | | Adjusted EBITDA | $(330) | $3 | $(333) | -11100.0%| | Net Loss | $(789) | $(305) | $(484) | 158.7% | Adjusted EBITDA (Nine Months Ended June 30, 2025 and 2024, in thousands) | Adjusted EBITDA (in thousands) | 9 Months Ended June 30, 2025 | 9 Months Ended June 30, 2024 | Change | % Change | | :----------------------------- | :--------------------------- | :--------------------------- | :----- | :------- | | Adjusted EBITDA | $(762) | $(197) | $(565) | 286.8% | | Net Loss | $(2,153) | $(1,529) | $(624) | 40.8% | - Adjusted EBITDA is a non-GAAP measure used by management and investors to evaluate operating performance, excluding items like interest, taxes, depreciation, amortization, and stock-based compensation[146](index=146&type=chunk)[147](index=147&type=chunk)[148](index=148&type=chunk) [Liquidity and Capital Resources](index=38&type=section&id=Liquidity%20and%20Capital%20Resources) Cash Flows (Nine Months Ended June 30, 2025 and 2024, in thousands) | Cash Flows (in thousands) | 9 Months Ended June 30, 2025 | 9 Months Ended June 30, 2024 | Change | % Change | | :------------------------ | :--------------------------- | :--------------------------- | :----- | :------- | | Operating Activities | $(759) | $(982) | $223 | -22.7% | | Investing Activities | $(12) | $(24) | $12 | -50.0% | | Financing Activities | $1,475 | $(189) | $1,664 | -880.4% | - Cash provided by financing activities significantly increased due to **$2.0 million** from common stock issuance, partially offset by Series C Preferred Stock redemption and long-term debt payments[153](index=153&type=chunk) - The company maintains tight control over discretionary spending and believes future revenues and cash flows will support working capital and revenue growth, despite historical operating losses[154](index=154&type=chunk) - The company has an effective shelf registration statement to offer up to **$50 million** in debt or equity securities, but there are no active offerings as of the filing date[155](index=155&type=chunk) [Critical Accounting Policies](index=39&type=section&id=Critical%20Accounting%20Policies) - Key accounting policies requiring significant judgment include revenue recognition, accounts receivable valuation, goodwill and intangible asset accounting, business combinations, common stock purchase warrants, and stock-based compensation[161](index=161&type=chunk)[165](index=165&type=chunk) - Revenue is recognized using a five-step model when control of services is transferred to customers, with estimates for variable consideration[163](index=163&type=chunk)[166](index=166&type=chunk) - Stock-based compensation expense is recognized over the vesting period using the Black-Scholes-Merton option valuation model, with subjective estimates for stock price volatility, expected life, and forfeiture rates[172](index=172&type=chunk)[173](index=173&type=chunk)[174](index=174&type=chunk)[175](index=175&type=chunk) [Item 3. Qualitative and Quantitative Disclosures About Market Risk](index=42&type=section&id=Item%203.%20Qualitative%20and%20Quantitative%20Disclosures%20About%20Market%20Risk) No qualitative and quantitative disclosures about market risk are required for this quarterly report - No qualitative and quantitative disclosures about market risk are required for this report[177](index=177&type=chunk) [Item 4. Controls and Procedures](index=42&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of June 30, 2025[178](index=178&type=chunk) - There were no material changes to the internal control over financial reporting during the most recent fiscal quarter[179](index=179&type=chunk) - Management acknowledges that any control system provides reasonable, but not absolute, assurance of achieving objectives and cannot guarantee prevention or detection of all misstatements[180](index=180&type=chunk) PART II – OTHER INFORMATION [Item 1. Legal Proceedings](index=43&type=section&id=Item%201.%20Legal%20Proceedings) No material legal proceedings are currently active beyond those disclosed in the Annual Report on Form 10-K - The company is not currently involved in any material legal proceedings beyond those previously disclosed in its Annual Report on Form 10-K for the fiscal year ended September 30, 2024[183](index=183&type=chunk) [Item 1A. Risk Factors](index=43&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors previously described in the Annual Report on Form 10-K have occurred - No material changes to the risk factors described in the Annual Report on Form 10-K for the fiscal year ended September 30, 2024, have occurred[184](index=184&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=43&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales of equity securities or use of proceeds are reported for the period - There were no unregistered sales of equity securities and use of proceeds to report[185](index=185&type=chunk) [Item 3. Defaults Upon Senior Securities](index=43&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) No defaults upon senior securities are reported for the period - There were no defaults upon senior securities[187](index=187&type=chunk) [Item 4. Mine Safety Disclosures](index=43&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Mine safety disclosures are not applicable to the company's operations - Mine safety disclosures are not applicable[188](index=188&type=chunk) [Item 5. Other Information](index=43&type=section&id=Item%205.%20Other%20Information) No other information is reported for the period - There is no other information to report[190](index=190&type=chunk) [Item 6. Exhibits](index=44&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including corporate governance documents, certifications, and XBRL data - Exhibits include Amended and Restated Certificate of Incorporation, By-laws, Certificates of Designations for Series A and B Convertible Preferred Stock, and CEO/CFO certifications[192](index=192&type=chunk) - XBRL (Extensible Business Reporting Language) information is furnished but not filed for purposes of certain sections of the Securities Act of 1933 and Securities Exchange Act of 1934[193](index=193&type=chunk) [Signatures](index=45&type=section&id=Signatures) The report is signed by Bridgeline Digital, Inc.'s President and CEO, Roger Kahn, and CFO, Thomas R. Windhausen, on August 14, 2025 - The report is signed by Roger Kahn, President and Chief Executive Officer, and Thomas R. Windhausen, Chief Financial Officer, on August 14, 2025[196](index=196&type=chunk)