Bridgeline Digital Inc (BLIN) 2023 Q2 法說會逐字稿

Good day, and thank you for standing by. Welcome to the Bridgeline Digital Second Quarter 2023 Earnings Conference Call. (Operator Instructions) Please be advised that today's conference is being recorded. And I would now like to hand the conference over to your speaker today, Mr. Thomas Windhausen. Mr. Windhausen, please go ahead.

美好的一天，感謝您的支持。歡迎參加 Bridgeline Digital 2023 年第二季度收益電話會議。 （操作員指示）請注意，今天的會議正在錄製中。現在我想將會議交給今天的發言者托馬斯·溫德豪森先生。溫德豪森先生，請繼續。

Thank you, and good afternoon, everyone. Thank you for joining us today. My name is Tom Windhausen. I'm the Chief Financial officer of Bridgeline. I'm pleased to welcome you to our fiscal 2023 second quarter conference call. On the call with us this afternoon is Ari Kahn, Bridgeline's President and CEO, will begin the call with a discussion of our business highlights.

謝謝大家，大家下午好。感謝您今天加入我們。我叫湯姆·溫德豪森。我是 Bridgeline 的首席財務官。我很高興歡迎您參加我們的 2023 財年第二季度電話會議。今天下午與我們通話的是 Bridgeline 總裁兼首席執行官 Ari Kahn，他將在通話開始時討論我們的業務亮點。

I will then update you on our financial results for the quarter, and we will conclude by taking questions. Before we begin, I'd like to remind listeners that during this conference call, comments that we make regarding Bridgeline that are not historic facts, are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and session 21E of the Securities Act of 1934 and are subject to risks and uncertainties that could cause such statements to differ materially from actual future events or results.

然後，我將向您介紹本季度的財務業績最新情況，最後我們將回答問題。在我們開始之前，我想提醒聽眾，在本次電話會議中，我們對 Bridgeline 所做的評論並非歷史事實，而是 1933 年《證券法》第 27A 條和《1933 年證券法》第 21E 節含義內的前瞻性陳述。 1934 年證券法，並受到風險和不確定性的影響，可能導致此類陳述與實際的未來事件或結果存在重大差異。

These statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The internal projections and beliefs upon which we base our expectations today may change over time, and we expressly disclaim and assume no obligation to inform you if they do. The results we report today should not be considered as an indication of future performance.

這些聲明是根據 1995 年《私人證券訴訟改革法案》的安全港條款作出的。我們今天的預期所依據的內部預測和信念可能會隨著時間的推移而發生變化，如果這些預測和信念發生變化，我們明確否認也不承擔通知您的義務。做。我們今天報告的結果不應被視為未來業績的指標。

Changes in economic, business, competitive, technological, regulatory and other factors, such as the impact of public health measures could cause Bridgeline's actual results to differ materially from those expressed or implied by the projections or forward-looking statements made today. For more detailed information about these factors and other risks that may impact our business, please review the reports and documents filed from time to time by Bridgeline Digital with the Securities and Exchange Commission.

經濟、商業、競爭、技術、監管和其他因素的變化，例如公共衛生措施的影響，可能導致 Bridgeline 的實際結果與今天做出的預測或前瞻性陳述所明示或暗示的結果存在重大差異。有關這些因素以及可能影響我們業務的其他風險的更多詳細信息，請查看 Bridgeline Digital 不時向美國證券交易委員會提交的報告和文件。

Also, please note that on the call this afternoon, we will discuss some non-GAAP financial measures when commenting on the company's financial performance. We provide a reconciliation of our GAAP financials to these non-GAAP measures in our earnings release. You can obtain a copy of our earnings release by visiting our website.

另請注意，在今天下午的電話會議上，我們將在評論公司的財務業績時討論一些非公認會計原則的財務指標。我們在收益報告中提供了 GAAP 財務數據與這些非 GAAP 指標的調節表。您可以訪問我們的網站獲取我們的收益發布副本。

I would now like to turn the call over to Ari Kahn, Bridgeline's President and CEO.

我現在想將電話轉給 Bridgeline 總裁兼首席執行官 Ari Kahn。

Thank you, Tom, and good afternoon everyone.

謝謝你，湯姆，大家下午好。

In the second quarter, we signed $1.4 million in new sales including $600,000 of licenses and over $800,000 in services. HawkSearch continues to be our best selling product. In most HawkSearch contracts have a 3 year initial term creating a strong backlog for future revenues.

第二季度，我們簽署了 140 萬美元的新銷售額，其中包括 60 萬美元的許可證和超過 80 萬美元的服務。 HawkSearch 仍然是我們最暢銷的產品。大多數 HawkSearch 合同的初始期限為 3 年，為未來的收入創造了強勁的積壓。

HawkSearch has organic growth in the high teens and renewal rates of over 95%. This product line represents more over 40% of our revenue. HawkSearch sales are often sourced from partners, which lowers marketing expenses. Three platform partners include Optimizely, BigCommerce, Sitefinity, and Salesforce.

HawkSearch 的有機增長高達十幾歲，續訂率超過 95%。該產品線占我們收入的 40% 以上。 HawkSearch 的銷售通常來自合作夥伴，這降低了營銷費用。三個平台合作夥伴包括 Optimizely、BigCommerce、Sitefinity 和 Salesforce。

Agency and system integrators also drive new sales with several important partners, including [X-Engage] and Americaneagle.com. Important HawkSearch sales in our second quarter including the expansion of our relationship with UPS through the addition of HawkSearch to their Bridgeline product suite. Growth in the footwear market, including Crocs, Foot Locker and New Balance in Asia and growth in the B2B industrial distributor market with Black Crocs. Industrial supply and (inaudible) scientific.

代理機構和系統集成商還與幾個重要合作夥伴（包括 [X-Engage] 和 Americaneagle.com）一起推動新的銷售。我們第二季度的重要 HawkSearch 銷售包括通過將 HawkSearch 添加到 UPS 的 Bridgeline 產品套件來擴展我們與 UPS 的關係。鞋類市場的增長，包括亞洲的 Crocs、Foot Locker 和 New Balance，以及 B2B 工業分銷商市場的增長，包括 Black Crocs。工業供應和（聽不清）科學。

Our go-to-market strategy concentrates on verticals where we have strong case studies which have dominated in the everywhere campaign. These core sectors include B2B electrical supply, footwear, franchise and plumbing distribution. WooRank is another important product for Bridgeline, and we've augmented our direct WooRank strategy with partner-driven sales.

我們的市場進入策略集中於垂直領域，我們擁有強有力的案例研究，這些案例研究在各地的營銷活動中佔據主導地位。這些核心行業包括 B2B 電力供應、鞋類、特許經營和管道分銷。 WooRank 是 Bridgeline 的另一個重要產品，我們通過合作夥伴驅動的銷售增強了直接 WooRank 戰略。

Last quarter, we announced our partnership with Duda to sell WooRank and Duda's app store. This partnership has already sold over 500 WooRank licenses to the Duda customer base. WooRank allows Duda users to increase traffic to their sites by improving their rank on search engines such as Google. Through this partnership, more than 450,000 businesses, can now add WooRank to their site with a clickable button.

上季度，我們宣布與 Duda 合作銷售 WooRank 和 Duda 的應用商店。此次合作已向 Duda 客戶群出售了 500 多個 WooRank 許可證。 WooRank 允許 Duda 用戶通過提高在 Google 等搜索引擎上的排名來增加其網站的流量。通過這種合作關係，超過 450,000 家企業現在可以通過可點擊的按鈕將 WooRank 添加到其網站。

Also Duda partners with 20,000 digital agencies who can now make bulk purchases of WooRank to their customer base. We not only grow sales to new product development acquisition, but we're also able to leverage our customer bases for cross sales of third-party products.

Duda 還與 20,000 家數字機構合作，這些機構現在可以向其客戶群批量購買 WooRank。我們不僅通過新產品開發收購來增加銷售額，而且還能夠利用我們的客戶群進行第三方產品的交叉銷售。

Last week, we announced the partnership with accessiBe, a market leader in web accessibility. AccessBe is trusted by over 180,000 customers including PlayStation, Johnson & Johnson and NBC to identify and fix website compliance issues with the American Disability Act and similar legislation in Canada and Europe. With accessBe technology is not only increases our customer's total accessible market to include those with disabilities, but also reduce our customers' legal risk associated with compliance violations.

上週，我們宣布與網絡無障礙市場領導者 accessiBe 建立合作夥伴關係。 AccessBe 受到 PlayStation、Johnson & Johnson 和 NBC 等超過 180,000 家客戶的信賴，可以識別和解決網站與美國殘疾人法案以及加拿大和歐洲類似立法的合規問題。 accessBe 技術不僅增加了客戶的總體無障礙市場，將殘疾人納入其中，而且還降低了客戶與合規違規相關的法律風險。

Bridgeline has delivered several important innovations in our product line this year.

Bridgeline 今年在我們的產品線中實現了多項重要創新。

Most recently, we announced our Bronco release for HawkSearch, which helps boost revenue for our customers while reducing their implementation costs. (inaudible) improved coordination across our products and (inaudible) HawkSearch our website for their industry while providing more out-of-the-box capabilities to accelerate time to market.

最近，我們發布了 HawkSearch 的 Bronco 版本，這有助於增加客戶的收入，同時降低他們的實施成本。 （聽不清）改進了我們產品之間的協調，（聽不清）HawkSearch 為他們的行業提供了我們的網站，同時提供了更多開箱即用的功能，以加快上市時間。

Bronco directly embeds WooRank and e-commerce 360 into the HawkSearch dashboard with WooRank customers alerted to SEO opportunity and e-commerce 360 providing advanced analytics and recommendations for Bridgeline products and partner products like accessiBe.

Bronco 直接將 WooRank 和電子商務 360 嵌入到 HawkSearch 儀表板中，WooRank 客戶會收到有關 SEO 機會的提醒，電子商務 360 會為 Bridgeline 產品和 accessiBe 等合作夥伴產品提供高級分析和建議。

Bronco's Rapid UI Framework provides point-and-click site configuration that enables customers to build and modify their site quickly. It also allows our sales team to easily demonstrate the power of HawkSearch to prospective customers in the context of their own website.

Bronco 的快速 UI 框架提供點擊式站點配置，使客戶能夠快速構建和修改其站點。它還使我們的銷售團隊能夠在潛在客戶自己的網站上輕鬆地向他們展示 HawkSearch 的強大功能。

Bronco introduced HawkSearch industry accelerators, which are an important part of our vertical go-to-market strategy. Industry accelerators package domain-specific intelligence that Hawk search has learned while powering other sites within that industry. When a new site is launched, rather than having to learn the behavior of its customers, it can use machine learning and human intelligence accumulated from similar sites in its industry to inject months of optimization on day 1.

Bronco 推出了 HawkSearch 行業加速器，這是我們垂直市場進入戰略的重要組成部分。行業加速器打包了 Hawk search 在為該行業內的其他網站提供支持時學到的特定領域的情報。當一個新網站推出時，它不必學習客戶的行為，而是可以使用從行業內類似網站積累的機器學習和人類智能，在第一天就注入數月的優化。

For example, our machine learning on the B2B large distributor side may discover that days light switches sell better than orange ones and therefore pushes base to the top of the web page and orange towards the bottom. Human configuration may further tune the site to tell us that [cotton and Dover] synonymous color name and customer searches.

例如，我們在 B2B 大型分銷商方面的機器學習可能會發現天燈開關比橙色開關賣得更好，因此將底座推到網頁頂部，將橙色推到底部。人性配置可能會進一步調整網站，告訴我們[棉花和多佛]同義的顏色名稱和客戶搜索。

Bridgeline's industry accelerators package this kind of intelligence from dozens of sites into a single package so that when a new customer within an industry launches a new site, they can immediately incorporate optimizations learn for months or even years of customer behavior across similar sites on day 1.

Bridgeline 的行業加速器將來自數十個站點的此類情報打包到一個包中，以便當行業內的新客戶啟動新站點時，他們可以立即將優化學習融入到類似站點中數月甚至數年的客戶行為中。 。

In the second quarter, Bridgeline delivered $4.1 million in revenue, including $3.3 million of subscription and license and $800,000 in services. Subscription revenue was influenced this quarter by the full quarter reduction of the large customer we mentioned last quarter, who has renewed for their ninth consecutive year on a legacy Bridgeline product restructured their website and this reduced subscription significantly for that account.

第二季度，Bridgeline 實現了 410 萬美元的收入，其中包括 330 萬美元的訂閱和許可以及 80 萬美元的服務。本季度訂閱收入受到我們上季度提到的大客戶整個季度減少的影響，該客戶已連續第九年續訂舊版 Bridgeline 產品，並重組了其網站，該帳戶的訂閱量大幅減少。

Regardless of the full 3-month impact of this reduction, subscription revenue for the second quarter grew from the first quarter, thanks to strong sales and renewals. This quarter, over 200 of Bridgeline's existing customers representing more than 90% of customers and of recurring revenue that was contracted for renewal during this quarter renewed for a total contract value of $4 million with several customers increasing the size of their license.

無論此次削減對整個三個月的影響如何，由於強勁的銷售和續訂，第二季度的訂閱收入較第一季度有所增長。本季度，Bridgeline 的 200 多家現有客戶（佔本季度續簽合同的客戶和經常性收入的 90% 以上）續簽了總合同價值 400 萬美元的合同，其中一些客戶擴大了許可證規模。

Renewals included Global 500 enterprises such as AstraZeneca, Toyota and UPS. Our subscription and license revenue was 80% of total revenue for the quarter, with new contracts typically signing for 3-year initial term and generally renewing for multiple subsequent years. At this time, I'd like to turn the call over to our Chief Financial Officer, Tom Windhausen. Tom?

續籤的包括阿斯利康、豐田、UPS等世界500強企業。我們的訂閱和許可收入佔本季度總收入的 80%，新合同通常簽訂為期 3 年的初始期限，並通常在隨後的多個年份續簽。現在，我想將電話轉給我們的首席財務官 Tom Windhausen。湯姆？

Thanks, Ari. I'll provide a further update on our financial results for the second quarter of fiscal 2023, which ended March 31, 2023. Total revenue for the quarter ended March 31, 2023, was $4.1 million compared to $4.1 million in the prior year period. Now going into each component of revenue, our subscription and license revenue that is comprised of SaaS comprised of SaaS licenses, maintenance and hosting revenue and perpetual license revenue for the quarter was $3.3 million, which was consistent with the prior year period amount. As a percent of total revenue, subscription licenses was 80% of total revenue for the quarter ended March 31, 2023.

謝謝，阿里。我將提供有關截至 2023 年 3 月 31 日的 2023 財年第二季度財務業績的進一步更新。截至 2023 年 3 月 31 日的季度總收入為 410 萬美元，而上年同期為 410 萬美元。現在來看收入的各個組成部分，本季度我們的訂閱和許可證收入（包括 SaaS 許可證、維護和託管收入以及永久許可證收入）為 330 萬美元，與上年同期金額一致。截至 2023 年 3 月 31 日的季度，訂閱許可佔總收入的 80%。

Our services revenue was $821,000 for the quarter ended March 2023, up slightly from $811,000 in the prior year quarter. As a percentage of total revenue, services revenue accounted for 20% of total revenue for the quarter ended March 31, 2023.

截至 2023 年 3 月的季度，我們的服務收入為 821,000 美元，略高於去年同期的 811,000 美元。截至2023年3月31日的季度，服務收入佔總收入的20%。

Our cost of revenue decreased to $1.26 million for the quarter ended March 2023 compared to $1.33 million in the prior year period. And as a result, our gross profit increased $49,000 or 2% to (inaudible) million for the quarter ended March '23 as compared to $2.78 million for the prior year period.

截至 2023 年 3 月的季度，我們的收入成本降至 126 萬美元，而去年同期為 133 萬美元。因此，截至 2023 年 3 月的季度，我們的毛利潤增加了 49,000 美元，即 2%，達到（聽不清）百萬美元，而去年同期為 278 萬美元。

Overall, our gross profit margin was 69% for the quarter ended March '23 compared to 68% in the prior year period. We have a subscription license gross margin of 74% for the quarter compared to 74% in the prior year period and our services gross margin up 49% for the quarter ended March '23, up from 43% in the same period in 2022.

總體而言，截至 2023 年 3 月的季度，我們的毛利率為 69%，而去年同期為 68%。我們本季度的訂閱許可毛利率為 74%，而上年同期為 74%；截至 2023 年 3 月的季度，我們的服務毛利率增長了 49%，高於 2022 年同期的 43%。

Our operating expenses were $3.5 million for the quarter ended March '23 compared to $3.4 million in the prior year period. Increase includes an additional $200,000 of expense across sales and marketing and research and development related to our investments. The change in fair value of our liability classified warrants resulted in a noncash income of $200,000 for the period ended March '23 compared to income of $400,000 in the prior year period.

截至 2023 年 3 月的季度，我們的運營支出為 350 萬美元，而上年同期為 340 萬美元。增加的費用包括與我們的投資相關的銷售、營銷以及研發方面額外的 200,000 美元費用。我們的責任分類認股權證公允價值的變化導致截至 2023 年 3 月的期間非現金收入為 200,000 美元，而去年同期的收入為 400,000 美元。

Our change in share price is the primary driver of the change in the fair value of these warrants. Moving on to net income. We had a net loss of $500,000 for the fiscal quarter ended March '23 compared to net income of $300,000 in the prior year period. Moving to EBITDA. Our adjusted EBITDA for the quarter ended March 2023 was negative $144,000 compared to negative $72,000 in the prior year period.

我們的股價變化是這些認股權證公允價值變化的主要驅動因素。轉向淨利潤。截至 23 年 3 月的財政季度，我們的淨虧損為 500,000 美元，而去年同期的淨收入為 300,000 美元。轉向 EBITDA。截至 2023 年 3 月的季度，我們調整後的 EBITDA 為負 144,000 美元，而去年同期為負 72,000 美元。

Next, moving on to our balance sheet. At March 31, 2023, we had cash of $2.8 million and accountable of $1.1 million. Our cash increased this quarter despite debt payments of EUR 300,000 in the quarter. Our total debt outstanding as of March 31, 2023 is EUR 700,000 with a weighted average interest rate of 4.1% with principal payments view through 2028.

接下來，轉向我們的資產負債表。截至 2023 年 3 月 31 日，我們擁有現金 280 萬美元，應付賬款 110 萬美元。儘管本季度支付了 300,000 歐元的債務，但我們的現金仍有所增加。截至 2023 年 3 月 31 日，我們的未償債務總額為 700,000 歐元，加權平均利率為 4.1%，本金支付預計到 2028 年。

Further, we have no remaining earnout from any of our previous acquisitions. As of March 31, 2023, we had total assets of $26.8 million and total liabilities of $6.9 million. We look forward to continued growth and success in fiscal '2023 and beyond as we continue to focus on revenue growth, product innovation, customer success and delivering shareholder value. Thank you for joining us on the call today. And at this time, we'll open the call to questions and answers. Moderator?

此外，我們之前的任何收購都沒有剩餘收益。截至 2023 年 3 月 31 日，我們的總資產為 2680 萬美元，總負債為 690 萬美元。我們期待 2023 財年及以後的持續增長和成功，因為我們將繼續專注於收入增長、產品創新、客戶成功和提供股東價值。感謝您今天加入我們的電話會議。此時，我們將開啟問答電話。主持人？

First question, can you give us an update on the industry environment in terms of what you're seeing in terms of the market and customer appetite in any particular technologies they're interested in?

第一個問題，您能否向我們介紹一下行業環境的最新情況，包括您所看到的市場情況以及客戶對他們感興趣的特定技術的興趣？

Yes. Thanks, Bill. We're seeing the -- our existing customers are continuing to make enhancements to their site. So from that perspective, we're not seeing any change in investments for the industry. Our new customer acquisition is also on par with last year. So regardless of the recession for the customer base that we have and the prospective customers that we have, we're not seeing a change. One of the things that we've seen is an awful lot of interest in AI, and that's driving some pretty interesting demand. We're seeing people integrate our software with other products like HubSpot, for example, even ChatGPT. And that's going to -- that's really getting us excited about the potential for offering broader solutions. And we were looking at some partnerships with other companies, including the accessiBe partnership, where we're able to offer broader solutions with not just the technology that we own ourselves, but incorporating that with other partner products as well.

是的。謝謝，比爾。我們看到——我們的現有客戶正在繼續改進他們的網站。因此，從這個角度來看，我們沒有看到該行業的投資發生任何變化。我們的新客戶獲取量也與去年持平。因此，無論我們現有的客戶群和潛在客戶的衰退如何，我們都沒有看到任何變化。我們看到的一件事是人們對人工智能非常感興趣，這推動了一些非常有趣的需求。我們看到人們將我們的軟件與 HubSpot 等其他產品集成，甚至 ChatGPT。這確實讓我們對提供更廣泛解決方案的潛力感到興奮。我們正在考慮與其他公司建立一些合作夥伴關係，包括 accessiBe 合作夥伴關係，我們不僅能夠利用我們自己擁有的技術，還能將其與其他合作夥伴的產品相結合，提供更廣泛的解決方案。

Okay. A quick follow-up. In terms of the competitive environment, is that the same? You mentioned AI. Is that having any impact on competition or competitors kind of like a tip-top match situation?

好的。快速跟進。就競爭環境而言，是一樣的嗎？你提到了人工智能。這是否會對比賽或競爭對手產生任何影響，就像頂級比賽的情況一樣？

Yes, not yet, not yet, but it is common. The enhancements in AI are -- a lot of them are open stores, like Open AI and so forth that are going to allow lot of companies to rapidly bring new capabilities into their product. And this is actually a big part of our industry accelerator package that we're offering now. We think that the future -- the near-term future for AI is not broad-based generative AI like ChatGPT, but instead have domain specific.

是的，還沒有，還沒有，但這很常見。人工智能的增強功能很多都是開放商店，例如開放人工智能等，這將使許多公司能夠快速將新功能引入他們的產品中。這實際上是我們現在提供的行業加速器包的重要組成部分。我們認為人工智能的未來——近期的未來不是像 ChatGPT 那樣基礎廣泛的生成式人工智能，而是具有特定領域的人工智能。

So we're using third-party AI products, Open AI products to understand narrow industries like footwear or B2B electrical distributors or plumbing or paint supplies and to have hyper strong expertise in those narrow niches so that we can dominate them one at a time.

因此，我們正在使用第三方人工智能產品、開放式人工智能產品來了解鞋類、B2B 電氣分銷商、管道或油漆供應等狹窄行業，並在這些狹窄的利基市場擁有超強的專業知識，以便我們能夠一次主導它們。

(Operator Instructions) I'm not seeing any questions in the queue. This will end the Q&A session. I would now like to turn the conference back to management for closing remarks.

（操作員說明）我在隊列中沒有看到任何問題。問答環節就此結束。我現在想將會議轉回管理層進行閉幕致辭。

Thank you for joining us today. We appreciate the continued support of our customers, our partners and our shareholders. We're excited about our business and ongoing growth prospects, and we look forward to speaking with you again on our third fiscal quarter 2023 conference call, which will be in August 2023. Thank you, everybody, and have a great week.

感謝您今天加入我們。我們感謝客戶、合作夥伴和股東的持續支持。我們對我們的業務和持續增長前景感到興奮，我們期待在 2023 年第三財季電話會議上再次與您交談，該電話會議將於 2023 年 8 月舉行。謝謝大家，祝您度過愉快的一周。

This concludes today's conference call. Thank you all for participating. You may now disconnect, and have a pleasant day.

今天的電話會議到此結束。感謝大家的參與。您現在可以斷開連接，並度過愉快的一天。