Bridgeline Digital (BLIN) Q3 2024 earnings summary

Executive summary

• Net revenue for Q3 2024 was $3.9 million, flat year-over-year, with a narrowed net loss of $0.3 million from $0.8 million; nine-month revenue was $11.5 million, down from $12.1 million, and net loss was $1.5 million, up from $1.4 million.

• HawkSearch accounted for 60% of subscription revenue, with 23 licenses sold this quarter and 70 year-to-date, nearly doubling average sale size year-over-year.

• Gross profit margin for Q3 2024 was 69%, up from 68% prior year; adjusted EBITDA was $3,000, compared to $(163,000) in Q3 2023.

• Strategic partnerships with Optimizely and BigCommerce, and analyst recognition from Gartner and Info-Tech, are expanding HawkSearch's reach.

• Notable customer wins include Colonial Electric Supply, Grizzly Industrial, Sailrite, Schaedler Yesco, and Voltus GmbH, reflecting strong traction in B2B and B2C markets.

Financial highlights

• Subscription and perpetual license revenue for Q3 2024 was $3.0 million (77% of total), down from $3.2 million; digital engagement services revenue rose to $0.9 million (23% of total), up from $0.7 million.

• Cost of revenue for Q3 2024 was $1.2 million, down from $1.3 million; operating expenses decreased to $3.1 million from $3.3 million.

• Cash and cash equivalents at June 30, 2024 were $1.2 million, down from $2.4 million at September 30, 2023.

• Deferred revenue at June 30, 2024 was $2.2 million, up from $2.1 million at March 31, 2024.

• Net cash used in operating activities for the nine months ended June 30, 2024 was $1.0 million, compared to $0.3 million provided in the prior year.

Outlook and guidance

• Management expects HawkSearch's growth to outpace declines in other revenue streams within a few quarters, with subscription revenue mix and gross margins expected to rise.

• Increased investment in sales and marketing is anticipated to drive proportional sales growth, given the large market opportunity.

• Management continues to control discretionary spending and believes future revenues and cash flows will support working capital and revenue growth.

• The company may offer up to $50 million in debt or equity securities under an effective shelf registration, but no active offerings are in place.