Release Date: May 14, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- HawkSearch sales continue to excel, with nearly 50 licenses sold this fiscal year, totaling over $4 million in contract value.
- Bridgeline Digital Inc (BLIN, Financial) has launched innovative AI capabilities in HawkSearch, including concept search and image search, enhancing customer interaction and increasing engagement.
- The company has strong partnerships with major platforms like Big Commerce and Optimizely, which boost lead generation and market credibility.
- Recognition by top analysts and inclusion in prestigious lists, such as the top 20 eCommerce solution providers by ICON Outlook tech magazine, enhances Bridgeline's industry standing.
- Operational efficiency improvements noted with a decrease in operating expenses by $500,000 compared to the prior year period.
Negative Points
- Total revenue and subscription license revenue have both decreased compared to the prior year period, with total revenue down from $4.1 million to $3.8 million.
- Gross profit margin has decreased from 69% to 66% year-over-year, indicating lower profitability per dollar of revenue.
- Net loss increased from $511,000 in the prior year period to $602,000, showing increased financial strain.
- Services revenue declined both in absolute terms and as a percentage of total revenue, suggesting potential challenges in this segment.
- Despite operational efficiencies, the company reported a negative adjusted EBITDA of $83,000, though it is an improvement from the previous year.
Q & A Highlights
Q: When will revenue from HawkSearch begin to show the real revenue growth of the company?
A: (Ari Kahn - President, Chief Executive Officer) HawkSearch is approaching 60% of subscription revenue. We expect FY '24 to have subscription revenue dominated by HawkSearch, which will drive past all other products combined.
Q: Does your AI Smart Search technology have applications beyond your customer base? How are your customers embracing this new offering?
A: (Ari Kahn - President, Chief Executive Officer) Our focus has largely been on eCommerce, and this will continue to be our primary business driver in both B2B and B2C. Smart Search is expanding our presence in content websites and intranets, where its generative AI can summarize and combine multiple articles to provide tailored search results.
Q: Provide some color on the company's thinking on product mix on a go-forward basis. How does the company view maintaining a diverse product base while HawkSearch is scaling up?
A: (Ari Kahn - President, Chief Executive Officer) HawkSearch's strong sales trajectory is dominating our focus. We're expanding HawkSearch with AI capabilities and focusing sales on partnerships. HawkSearch is fully integrated with Unbound and WooRank, and Celebros is merging with HawkSearch.
Q: Can you provide a rough breakdown on revenue and margin sources?
A: (Thomas Windhausen - Chief Financial Officer, Treasurer, Company Secretary) Our largest contributors to revenue and margin are Unbound and Search. Both deliver similar gross margins of 40% to 45% for services and 70% to 75% for subscription.
Q: Can you provide some insight into cash burn and projected cash position to the end of the year, going into next year?
A: (Thomas Windhausen - Chief Financial Officer, Treasurer, Company Secretary) We manage our financials to generate cash and can adjust marketing spend to control cash flow. We expect our low marked to cash to be around $1 million, and we do not intend to deal with stockholders to generate cash.
Q: How are your customers embracing the new AI Smart Search technology?
A: (Ari Kahn - President, Chief Executive Officer) Customers are embracing AI Smart Search positively, especially in eCommerce. It's expanding our presence in content websites and intranets, providing tailored search results and enhancing user engagement.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
