Bridgeline Digital (BLIN) Q2 2026 earnings summary

Executive summary

• Achieved record new logo and customer sales, tripling last quarter's sales and closing $2.8 million in total contract value with $1.2 million in annual recurring revenue.

• Expanded sales to existing customers, especially for HawkSearch, reflecting strong demand for AI-powered products and core product revenue growth of 14% year-over-year.

• Core products, led by HawkSearch's AI suite, now represent 65% of subscription revenue and 61% of total revenue, both up year-over-year.

• Net revenue retention for core products reached 107%, reflecting strong customer satisfaction and license expansions.

• Major customer wins included global gas providers, large B2B distributors, and home décor brands, with HawkSearch recognized as a leader in B2B capabilities.

Financial highlights

• Total revenue for Q2 2026 was $3.9 million, flat compared to the prior year period; $7.8 million for the first six months, up 2%.

• Subscription revenue was $3.1 million, representing 80% of total revenue, with services revenue at $799,000.

• Gross profit was $2.5 million, with an overall gross margin of 64%; subscription gross margin was 69%, services 47%.

• Operating expenses decreased to $2.9 million from $3.4 million year-over-year; for the first six months, $5.7 million, down from $6.4 million.

• Net loss narrowed to $0.4 million from $0.7 million, and adjusted EBITDA improved to -$43,000 from -$239,000.

Outlook and guidance

• Pipeline grew by 82% year-over-year, with over 500 qualified leads and $5.5 million in ARR potential.

• Management expects new AI-powered product launches to drive further customer acquisition and recurring revenue.

• Sales cycle remains 120-150 days, with a 20% close rate on qualified leads, supporting continued momentum.

• Continued focus on revenue growth, product innovation, and customer success for 2026 and beyond.

• Tight control over discretionary spending continues for fiscal 2026.