Core Insights - Bridgeline Digital, Inc. has launched HawkSearch for a major Midwest-based wholesale distributor, enhancing its online product discovery and digital customer experience [1][2]. Group 1: Company Overview - Bridgeline Digital is a leader in AI-powered marketing technology, focusing on helping companies grow online revenue by increasing traffic, conversion rates, and average order value [4]. Group 2: Product Features - HawkSearch utilizes the Xngage Xconnect connector for Optimizely, enabling seamless data integration and an intuitive user experience [3]. - Key features of HawkSearch include Autocomplete, Measurement Conversion, and upcoming AI-powered Recommendations aimed at streamlining the buying process and enhancing customer engagement [3]. Group 3: Strategic Partnerships - The partnership with the distributor aims to reinforce Bridgeline's mission of making searches smarter and customer interactions more meaningful, ultimately driving stronger customer relationships and measurable growth [4].

Core Insights - Bridgeline Digital, Inc. has launched HawkSearch for a leading U.S.-based distributor of specialty lighting products and power solutions, enhancing their eCommerce platform [1] Group 1: Company Overview - Bridgeline Digital is a leader in AI-powered marketing technology, focusing on helping companies increase online revenue through improved traffic, conversion rates, and average order value [4] Group 2: Product Features - HawkSearch offers AI-driven search capabilities that manage complex, high-volume catalogs, providing relevant and intuitive search results [3] - The platform supports advanced filtering and precise product matching, streamlining the purchasing experience for customers [3] Group 3: Market Demand - There is a growing need for search technology that delivers speed, accuracy, and reliability for distributors with specialized catalogs [4] - The implementation of HawkSearch is expected to enhance customer satisfaction and support online growth for organizations [4]

Core Insights - Bridgeline Digital, Inc. (NASDAQ:BLIN) has been selected to enhance the on-site search experience for a national closeout retailer with over 170 locations and a growing eCommerce presence [1] Company Developments - HawkSearch, a product of Bridgeline Digital, will address the retailer's limitations in native search, which include rigid filtering and limited merchandising flexibility [1] - The partnership aims to improve the guidance of shoppers towards relevant and complementary products [1]

Revenue Performance - Total revenue for Q4 FY 2025 was $3.9 million, unchanged from Q4 FY 2024, with subscription revenue of $3.1 million, a 4% increase from $3.0 million in the prior year[6][10]. - For FY 2025, total revenue was $15.4 million, consistent with FY 2024, with subscription revenue increasing to $12.4 million from $12.1 million, representing 80% of total revenue[17]. - Bridgeline's Core products, led by HawkSearch, grew by 16% to $8.9 million in FY 2025, accounting for 58% of total revenue, up from 50% in FY 2024[6][2]. - The company sold 18 new subscription contracts in Q4 FY 2025, totaling $1.25 million in contract value, contributing over $350,000 in Annual Recurring Revenue[6]. - Subscription revenue for the twelve months ended September 30, 2025, reached $12,355,000, compared to $12,134,000 in 2024, reflecting a growth of 1.8%[28]. Profitability and Loss - Operating loss for Q4 FY 2025 was $0.5 million, consistent with the loss reported in Q4 FY 2024[10][11]. - Gross margin for Q4 FY 2025 was 66%, down from 69% in Q4 FY 2024, with subscription gross margin at 69% compared to 72% in the prior year[10]. - Gross profit for the three months ended September 30, 2025, was $2,542,000, down from $2,652,000 in 2024, indicating a decrease of 4.2%[28]. - The net loss for the three months ended September 30, 2025, was $365,000, an improvement from a net loss of $432,000 in the same period of 2024[28]. - Adjusted EBITDA for the three months ended September 30, 2025, was $(169,000), compared to $5,000 in 2024, indicating a decline in operational performance[30]. Operational Efficiency - The average subscription ARR per sale increased by 35% from $18,500 in FY 2024 to $25,000 in FY 2025[6]. - Net Revenue Retention for Core products was 117% for FY 2025, indicating strong customer satisfaction and demand[2]. - Bridgeline's sales cycle reduced from over 160 days in FY 2024 to 92 days in FY 2025, indicating improved sales efficiency[6]. Financial Position - Cash and cash equivalents as of September 30, 2025, increased to $1,626,000 from $1,390,000 in 2024, representing a growth of 16.9%[25]. - Total assets decreased to $15,326,000 as of September 30, 2025, from $15,602,000 in 2024, a decline of 1.8%[25]. - Total liabilities increased to $5,758,000 as of September 30, 2025, compared to $5,596,000 in 2024, reflecting an increase of 2.9%[26]. - The number of weighted average shares outstanding for the three months ended September 30, 2025, was 11,227,586, up from 10,417,609 in 2024, indicating an increase of 7.8%[28]. Product Development - The company launched new products including the Agentic AI product and Enhanced Multilingual Search, expanding its capabilities in AI-driven analytics and search[6].

Core Insights - Bridgeline Digital, Inc. has announced that HawkSearch has become an Allied Partner of the National Association of Electrical Distributors (NAED) [1] - This partnership aims to enhance HawkSearch's engagement with the electrical distribution community [1] - HawkSearch will provide advanced AI-driven search, product discovery, and digital experience solutions to support NAED members [1]

Core Insights - Bridgeline Digital, Inc. (NASDAQ:BLIN) is a significant player in the AI-powered marketing technology sector, focusing on innovative solutions like the HawkSearch suite to enhance product discovery through artificial intelligence [1] Financial Performance - On December 18, 2025, BLIN reported an earnings per share (EPS) of -$0.00791, surpassing the estimated EPS of -$0.05, marking a positive surprise of 50% compared to a previous quarter's negative surprise of 40% [2] - The company generated revenue of approximately $3.87 million, slightly below the estimated $3.95 million, with a 16% growth in its Core products driven by strong demand for its AI offerings [3][6] Valuation Metrics - BLIN's financial metrics show a negative price-to-earnings (P/E) ratio of -4.53 and a price-to-sales ratio of 0.77, indicating that the market values its sales at less than one times its revenue [4] - The enterprise value to sales ratio is 0.67, suggesting a relatively lower valuation when considering debt and cash [4] Financial Health - The company has a low debt-to-equity ratio of 0.052, indicating conservative debt usage, but faces potential liquidity challenges with a current ratio of 0.77 [5][6] - As BLIN enters fiscal 2026, it aims to leverage a 65% increase in its sales pipeline and maintain its top position in Gartner's Critical Capabilities Report for B2B Search Use Case [5]

Financial Performance - The company incurred a net loss of approximately $(2.5) million for the year ended September 30, 2025, with an accumulated deficit of approximately $(94) million as of the same date[49]. - The company has experienced significant fluctuations in quarterly operating results, which could adversely affect stock price and profitability[78]. Competition and Market Challenges - The company faces intense competition in a rapidly changing marketplace, which could lead to price reductions and loss of market share[64]. - The complexity of AI systems and evolving competition in the AI space introduces uncertainty regarding the successful integration and commercialization of AI technologies[58]. - A reduction in license renewal rates could adversely affect revenue, as customers are not obligated to renew their subscription licenses[52]. Operational Risks - The company relies on third-party vendors for AI solutions, which may lead to quality and compliance issues[59]. - Security breaches could expose the company to significant legal and financial liabilities, impacting customer trust and future sales[60]. - The company may face challenges in protecting its intellectual property, which could allow competitors to undermine its market position[70]. - Claims of infringement on proprietary rights could require the company to redesign products or pay significant royalties, impacting financial performance[73]. Management and Personnel - The company is dependent on its management team, and the loss of key personnel could materially affect business operations and future prospects[82]. - The company may face challenges in attracting and retaining qualified personnel due to intense competition, which could impact its growth plans[84]. Stock and Financing - The average daily trading volume of the company's common stock increased to approximately 99,000 shares in fiscal 2025, compared to 41,000 shares in fiscal 2024 and 56,000 shares in fiscal 2023[79]. - The closing price of the company's common stock fluctuated between $1.05 and $2.80 during fiscal 2025, with a requirement to maintain a minimum closing bid price of at least $1.00 per share to avoid delisting from Nasdaq[81]. - The company has never paid cash dividends on its common stock and does not anticipate paying any in the future, meaning investors would only realize income through potential increases in market price[87]. - The company has issued 264,000 shares of Series A Preferred stock and may issue additional preferred stock to consummate financing or other transactions, which could dilute existing stockholder value[86]. Growth and Infrastructure - The company must continue to develop new products and enhance existing ones to maintain competitive positioning, as failure to do so could adversely affect business performance[69]. - The company may need to expand its infrastructure to manage projected growth, and failure to do so could harm profitability and revenue[78]. - The company has acquired multiple businesses since its inception, including two in fiscal 2021, but integration challenges could disrupt operations and dilute stockholder value[85]. Regulatory Environment - The company is subject to evolving regulations, including the GDPR, which may negatively impact its business and revenue due to stricter operational requirements[77]. - The company may require additional financing to expand operations, which may not be available on acceptable terms[50].

Financial Performance - Bridgeline Digital reported a quarterly loss of $0.03 per share, better than the Zacks Consensus Estimate of a loss of $0.06, representing an earnings surprise of +50.00% [1] - The company posted revenues of $3.87 million for the quarter ended September 2025, missing the Zacks Consensus Estimate by 0.23%, and showing a slight increase from $3.86 million year-over-year [2] - Over the last four quarters, Bridgeline Digital has surpassed consensus EPS estimates only once [2] Stock Performance - Bridgeline Digital shares have declined approximately 39.9% since the beginning of the year, contrasting with the S&P 500's gain of 14.3% [3] - The current Zacks Rank for Bridgeline Digital is 3 (Hold), indicating that the shares are expected to perform 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 $4.08 million, and for the current fiscal year, it is -$0.16 on revenues of $17.25 million [7] - The estimate revisions trend for Bridgeline Digital was mixed ahead of the earnings release, which may change following the recent report [6] Industry Context - The Internet - Services industry, to which Bridgeline Digital belongs, is currently ranked in the top 37% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8]

Financial Data and Key Metrics Changes - Total revenue for Q4 Fiscal 2025 was $3.9 million, unchanged from the prior year [16] - Subscription revenue was $3.1 million, up from $3 million in the prior year, accounting for 81% of total revenue [16] - Services revenue decreased to $700,000 from $800,000, representing 19% of total revenue [16] - Gross profit was $2.5 million with a gross profit margin of 66%, while subscription gross margin was 69% [17] - Net loss remained at $400,000, with adjusted EBITDA at minus $169,000 compared to a positive $5,000 in the prior year [17] Business Line Data and Key Metrics Changes - HawkSearch Suite and its AI products contributed 58% of total revenue, amounting to $8.9 million, and over 60% of subscription revenue at $7.4 million [5] - Net revenue retention for HawkSearch was 117%, with a churn rate of less than 4% [8] - Average annual recurring revenue (ARR) per sale increased by 35% from $18,500 to $25,000 [5] - The company sold 83 licenses with a total contract value of $6.9 million, marking an 18% increase over Fiscal 2024 [6] Market Data and Key Metrics Changes - The sales pipeline grew by 65% compared to the beginning of Fiscal 2025, with a shorter sales cycle reduced from 160 days to 92 days [6][15] - The company added 28 new customers, contributing $2 million in total contract value and $700,000 in ARR [10] Company Strategy and Development Direction - The company aims to focus on core products, particularly HawkSearch, which is expected to dominate overall financials moving forward [27] - Marketing budget has been increased to $500,000 per quarter to enhance brand visibility and lead generation [12][45] - Partnerships with Unilog and Salesforce are expected to expand the total addressable market and accelerate sales cycles [13][41] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the stability and potential growth of the customer base, particularly in the B2B segment [33] - The company anticipates a reduction in the decline of legacy products by 2026, leading to stronger cumulative financials [15] - The focus will remain on product innovation, customer success, and delivering shareholder value [19] Other Important Information - The company launched six new AI-powered products in Fiscal 2025, enhancing its competitive position in the market [14] - The total assets as of September 30, 2025, were $15 million, with total liabilities of $5.8 million [18] Q&A Session Summary Question: Clarification on ARR number - The $8.9 million in ARR is specific to HawkSearch, with total cumulative revenue of $15.4 million including $12.4 million in ARR [25] Question: Future sharing of ARR metrics - The company intends to continue sharing ARR growth metrics quarterly as it becomes a significant part of overall financials [27] Question: Changes in contract length for HawkSearch - Average contract length remains consistent at around two to three years, with increased initial investments from customers [30][31] Question: Stability of non-HawkSearch revenue - Management expressed confidence in the stability of the remaining customer base, with a low churn rate [34] Question: Impact of Salesforce AppExchange on revenue - The partnership with Salesforce is expected to start impacting revenue in the upcoming quarters [39] Question: Comfort with sales and marketing spend - The current sales and marketing spend level of $1.1 million per quarter is deemed appropriate for 2026, with a focus on maximizing lead generation [44]

Financial Data and Key Metrics Changes - Total revenue for Q4 FY2025 was $3.9 million, unchanged from the prior year period [17] - Subscription revenue was $3.1 million, up from $3 million in the prior year, accounting for 81% of total revenue [17] - Gross profit was $2.5 million with a gross profit margin of 66%, while subscription gross margin was 69% [18] - Net loss remained at $400,000, with Adjusted EBITDA at minus $169,000 compared to a positive $5,000 in the prior year [18] Business Line Data and Key Metrics Changes - HawkSearch Suite and its AI products contributed 58% of total revenue, amounting to $8.9 million, and over 60% of subscription revenue at $7.4 million [5] - Net revenue retention for HawkSearch was 117%, with an 18% increase in sales over FY2024 [6][15] - Average annual recurring revenue (ARR) per sale increased by 35% from $18,500 to $25,000 [5] Market Data and Key Metrics Changes - The sales pipeline grew by 65% compared to the beginning of FY2025, with a reduction in the average sales cycle from 160 days to 92 days [6][15] - The company added 28 new customers, contributing $2 million in total contract value and $700,000 in ARR [9] Company Strategy and Development Direction - The company aims to focus on core products, particularly HawkSearch, and anticipates accelerated growth in FY2026 as the decline of legacy products is expected to end [6][15] - Marketing budget has been doubled to $500,000 per quarter to enhance brand visibility and sales lead generation [11][46] - Partnerships with Unilog and Salesforce are expected to expand the total addressable market and accelerate sales cycles [12][40] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the stability of the customer base, with less than 4% churn rate for HawkSearch customers [35] - The company is optimistic about the growth potential in FY2026, driven by product innovations and strong customer satisfaction [20][52] Other Important Information - The company injected $2 million into expanding its marketing budget, which has resulted in a more efficient sales cycle and larger average sales size [10] - Six new AI-powered products were launched, enhancing the company's competitive position in the market [12][14] Q&A Session Summary Question: Clarification on ARR number - The $8.9 million in ARR is specific to HawkSearch, part of the total cumulative revenue of $15.4 million [25] Question: Future sharing of ARR metrics - The company intends to continue sharing ARR growth quarterly as it is expected to dominate overall financials moving forward [27][28] Question: Changes in contract length for HawkSearch - Average contract length remains consistent at around two to three years, with increased initial investments from customers [30][31] Question: Stability of non-HawkSearch revenue - Management expressed confidence in the stability of the remaining non-HawkSearch revenue base for FY2026 [34] Question: Impact of Salesforce AppExchange on revenue - The partnership with Salesforce is expected to start generating revenue in the upcoming quarters, with significant growth anticipated [40] Question: Comfort with sales and marketing spend - The current sales and marketing spend level of $1.1 million per quarter is deemed appropriate for 2026, with a focus on maximizing lead generation [44][46]