Bridgeline Digital(BLIN) - 2022 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Company reported a 22% revenue growth in Q3 2022, totaling $4.2 million compared to $3.4 million in the same quarter last year [7][18] - Subscription and license revenue increased by 29% to $3.4 million, now representing over 80% of total revenue [7][19] - Gross profit rose by 30% to $2.9 million, with gross margin percentage increasing to 70% from 65% in the prior year [7][22] - Net income was positive at $0.4 million, a significant improvement from a net loss of $3.6 million in the prior year [24] Business Line Data and Key Metrics Changes - Subscription and license revenue accounted for 81% of total revenue, up from 76% in the prior year [19] - Services revenue remained flat at $0.8 million, constituting 19% of total revenue [21] - Subscription license gross margins improved to 75% from 72% in the prior year [22] Market Data and Key Metrics Changes - Growth observed in finance, automotive, retail, and manufacturing sectors [10] - New customer acquisitions included notable names such as Bristol-Myers Squibb, 7-Eleven, Shell Oil, and Triumph Motorcycles [12] Company Strategy and Development Direction - Company focuses on revenue growth, product innovation, and expanding customer success [26] - Strategic acquisitions are being evaluated, with a focus on opportunities that can be financed accretively [16][17] - The eCommerce360 strategy aims to enhance growth by winning new customers and selling new products to existing customers [9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued success and growth prospects for the final quarter of fiscal '22 and beyond [26] - The company is adapting its sales structure to improve customer acquisition costs through partnerships [32] Other Important Information - Company ended the quarter with $3.9 million in cash after financing activities related to acquisitions [9][25] - Adjusted EBITDA for the quarter was $0.1 million, down from $0.3 million in the prior year [25] Q&A Session Summary Question: What kind of deployment timeline are we looking for with the new TruPresence customer? - Management indicated that the new customer can use the product immediately with no services required, representing a 100% software sale [27] Question: Is there a pipeline developing for other potential customer wins for TruPresence? - Management confirmed a strong pipeline for TruPresence, particularly with the DataBravo product, which addresses SEO weaknesses across franchisee websites [28] Question: How are customer acquisition costs trending? - Management reported improving customer acquisition costs, currently in the 2.9 range of lifetime value to CAC, with expectations for further improvement [30] Question: Are you still seeing the same kind of traffic rent that generates customer leads from WooRank? - Management noted that traffic generation remains consistent and is expanding partnerships to enhance distribution [31] Question: What does the deferred partnership mean for the company in the long term? - Management explained that the new structure of the sales team, with direct salespeople managing partnerships, is expected to lower CAC and enhance product sales [32]