Bridgeline Digital Inc

Previous wording

We are a marketing technology company that offers a suite of products that help companies grow online revenue and share information with customers, partners, and employees.

Current wording

Bridgeline Digital is an AI-powered marketing technology company that offers a suite of products that help companies grow online revenue by driving more visitors to their websites, converting more visitors to purchasers, and increasing average order value per purchaser.

Previous wording

All of our software is available through a cloud-based Software as a Service (“SaaS”) model, whose flexible architecture provides customers hosting and support. Additionally, Unbound and HawkSearch have the option to be available via a traditional perpetual licensing business model, in which the software can reside on a dedicated infrastructure either on premise at the customer’s facility, or manage-hosted by us via a cloud-based, dedicated hosted services model.

Current wording

Bridgeline’s software is available through a cloud-based Software as a Service (“SaaS”) model. Additionally, Bridgeline’s software is available via a perpetual licensing business model, in which the software can reside on premise at the customer’s facility, or manage-hosted by Bridgeline. Bridgeline’s product offerings include:

Previous wording

HawkSearch: a site search, recommendation, and personalization software application, built for marketers, merchandisers, and developers to enhance, normalize, and enrich an online customer's content search and product discovery experience.

Current wording

● HawkSearch: a site search, recommendation, and personalization software application, built for marketers to enhance, normalize, and enrich an online customer's content search and product discovery experience.

Previous wording

We currently have over 2,000 active customers. For the three and nine months ended June 30, 2024 and 2023, no customer exceeded 10% of our revenue.

Current wording

We currently have over 2,000 active customers. For the three months ended December 31, 2024 and 2023, no customer exceeded 10% of our revenue.

Previous wording

Results of Operations for the Three and Nine Months Ended June 30, 2024 compared to the Three and Nine Months Ended June 30, 2023

Current wording

Results of Operations for the Three Months Ended December 31, 2024 compared to the Three Months Ended December 31, 2023

Previous wording

Total net revenue for each of the nine months ended June 30, 2024 and 2023, was $11.5 million and $12.1 million, respectively. We had net loss of $(1.5) million and $(1.4) million for the nine months ended June 30, 2024 and 2023, respectively. Included in the net loss for the nine months ended June 30, 2023, was a gain of $0.4 million as a result of the change in the fair value of certain warrant liabilities. Basic and diluted loss per share attributable to common shareholders was $ (0.15) for the nine months ended June 30, 2024. Basic and diluted net loss per share attributable to common shareholders was $ (0.13) for the nine months ended June 30, 2023.

Current wording

Total net revenue for each of the three months ended December 31, 2024 and 2023, was $3.8 million. We had net loss of $(0.6) million for each of the three months ended December 31, 2024 and 2023. Included in the net loss for the three months ended December 31, 2024 and 2023, was a loss of $114 thousand and a gain of $18 thousand, respectively, as a result of the change in fair value of certain warrant liabilities. Basic and diluted loss per share attributable to common shareholders was $ (0.06) for each of the three months ended December 31, 2024and 2023.

Previous wording

Revenue from subscription (SaaS) and perpetual licenses of $3.0 million for the three months ended June 30, 2024 decreased from $3.2 million for the three months ended June 30, 2023.

Current wording

Revenue from subscription (SaaS) and perpetual licenses of $3.1 million for the three months ended December 31, 2024 remained consistent with $3.1 million for the three months ended December 31, 2023.

Previous wording

Subscription and perpetual licenses revenue as a percentage of total revenue of 79% for the nine months ended June 30, 2024 decreased from 80% for the nine months ended June 30, 2023.

Current wording

Subscription and perpetual licenses revenue as a percentage of total revenue of 80% for the three months ended December 31, 2024 decreased from 82% for the three months ended December 31, 2023.

Previous wording

Revenue from digital engagement services of $0.9 million for the three months ended June 30, 2024 increased from $0.7 million for the three months ended June 30, 2023.

Current wording

Revenue from digital engagement services of $0.7 million for the three months ended December 31, 2024 increased from $0.7 million for the three months ended December 31, 2023.

Previous wording

The increase in revenue from digital engagement services for the three months ended June 30, 2024 was a result of additional services volumes in the three months ended June 30, 2024.

Current wording

The increase in revenue from digital engagement services as a percentage of total revenue for the three months ended December 31, 2024 was a result of additional services volumes in the three months ended December 31, 2024.

Previous wording

Total cost of revenue of $1.2 million for the three months ended June 30, 2024 decreased from $1.3 million for the three months ended June 30, 2023.

Current wording

Total cost of revenue of $1.3 million for the three months ended December 31, 2024 increased from $1.2 million for the three months ended December 31, 2023.

Previous wording

The cost of subscription and perpetual licenses as a percentage of subscription and perpetual licenses revenue was 28% and 27% for the three months ended June 30, 2024 and 2023, respectively.

Current wording

The cost of subscription and perpetual licenses as a percentage of subscription and perpetual licenses revenue was 29% and 27% for the three months ended December 31, 2024 and 2023, respectively.

Previous wording

The changes in cost of subscription and perpetual licenses are primarily due to server costs and personnel costs.

Current wording

The changes in cost of subscription and perpetual licenses are primarily due to lower personnel costs and higher server costs.

Previous wording

Cost of digital engagement services of $0.4 million for the three months ended June 30, 2024 remained consistent with $0.4 million for the three months ended June 30, 2023.

Current wording

Cost of digital engagement services of $0.4 million for the three months ended December 31, 2024 decreased from $0.4 million for the three months ended December 31, 2023.

Previous wording

The cost of total digital engagement services as a percentage of total digital engagement services revenue was 42% and 56% for the three months ended June 30, 2024 and 2023, respectively.

Current wording

The cost of total digital engagement services as a percentage of total digital engagement services revenue was 49% and 56% for the three months ended December 31, 2024 and 2023, respectively.

Previous wording

The decrease in cost of digital engagement services in the three and nine month periods is primarily due to lower personnel costs.

Current wording

The decrease in cost of digital engagement services is primarily due to lower personnel costs.

Previous wording

Gross profit of $2.7 million for the three months ended June 30, 2024 increased from $2.6 million for the three months ended June 30, 2023.

Current wording

Gross profit of $2.5 million for the three months ended December 31, 2024 decreased from $2.6 million for the three months ended December 31, 2023.

Previous wording

The gross profit margin was 69% and 68% for the three months ended June 30, 2024 and 2023, respectively.

Current wording

The gross profit margin was 67% and 68% for the three months ended December 31, 2024 and 2023, respectively.

Previous wording

Research and development expenses of $1.0 million for the three months ended June 30, 2024 increased from $0.9 million for the three months ended June 30, 2023.

Current wording

Sales and marketing expenses of $1.0 million for the three months ended December 31, 2024 increased from $0.9 million for the three months ended December 31, 2023.

Previous wording

Sales and marketing expense as a percentage of total revenue was 24% and 31% for the three months ended June 30, 2024 and 2023, respectively.

Current wording

Sales and marketing expense as a percentage of total revenue was 26% and 24% for the three months ended December 31, 2024 and 2023, respectively.

Previous wording

The decrease in expenses compared to the prior periods is primarily attributable to lower personnel costs and lower marketing spend on leads and conferences.

Current wording

The increase compared to the prior period is primarily attributable to higher personnel costs and higher marketing spend on leads and conferences.

Previous wording

General and administrative expenses of $0.9 million for the three months ended June 30, 2024 increased from $0.8 million for the three months ended June 30, 2023.

Current wording

General and administrative expenses of $0.8 million for the three months ended December 31, 2024 remained consistent with $0.8 million for the three months ended December 31, 2023.

Previous wording

General and administrative expense as a percentage of total revenue was 21% and 20% for the nine months ended June 30, 2024 and 2023, respectively.

Current wording

General and administrative expense as a percentage of total revenue was 21% for each of the three months ended December 31, 2024 and 2023.

Previous wording

Research and development expenses as a percentage of total revenue was 26% and 24% for the three months ended June 30, 2024 and 2023, respectively.

Current wording

Research and development expenses as a percentage of total revenue was 28% and 29% for the three months ended December 31, 2024 and 2023, respectively.

Previous wording

The loss from operations was $(0.4) million and $(0.7) for the three months ended June 30, 2024 and 2023, respectively.

Current wording

The loss from operations was $(0.5) million and $(0.6) for the three months ended December 31, 2024 and 2023, respectively.

Previous wording

Interest expense and other, net, was $5 thousand and $0 thousand for the three months ended June 30, 2024 and 2023.

Current wording

Interest expense and other, net, was $4 thousand and $0 for the three months ended December 31, 2024 and 2023.

Previous wording

We recognized a gain/(loss) related to the change in fair value of warrant liabilities of $88 thousand and $(107) thousand for the three months ended June 30, 2024 and 2023, respectively.

Current wording

We recognized a (loss)/gain related to the change in fair value of warrant liabilities of $(114) thousand and $18 thousand for the three months ended December 31, 2024 and 2023, respectively.

Previous wording

The provision for income taxes was $5 thousand for the three months ended June 30, 2024 and $9 thousand for the three months ended June 30, 2023. The provision for income taxes was $15 thousand for the nine months ended June 30, 2024 and $25 thousand for the nine months ended June 30, 2023. The provision for income taxes consists of estimated liability for federal and state income taxes owed by us. Net operating loss (“NOL”) carryforwards are estimated to be sufficient to offset any potential taxable income for all periods presented. A valuation allowance is established if it is more likely than not that all or a portion of the deferred tax asset will not be realized. We maintain a valuation allowance against its net deferred tax assets.

Current wording

The provision for income taxes was $5 thousand for each of the three months ended December 31, 2024 and December 31, 2023. The provision for income taxes consists of estimated liability for federal and state income taxes owed by us. Net operating loss (“NOL”) carryforwards are estimated to be sufficient to offset any potential taxable income for all periods presented. A valuation allowance is established if it is more likely than not that all or a portion of the deferred tax asset will not be realized. We maintain a valuation allowance against its net deferred tax assets.

Previous wording

Cash used in operating activities was $(1.0) million for the nine months ended June 30, 2024, compared to $0.3 million cash provided by operating activities for the nine months ended June 30, 2023. The change in cash used in operating activities, compared to the prior period, was primarily due to a decrease in net earnings and changes in non-cash items, including changes in fair value of warrant liabilities, and changes in accounts receivable, prepaid expenses and other current assets, accounts payable and accrued liabilities and deferred revenue.

Current wording

Cash provided by operating activities was $0.2 million for the three months ended December 31, 2024, compared to cash used in operating activities of $(0.9) million for the three months ended December 31, 2023. The change in cash used in operating activities, compared to the prior period, was primarily due to changes in non-cash items, including amortization and changes in fair value of warrant liabilities, and changes in accounts receivable and accounts payable and accrued liabilities.

Previous wording

There was $(24) thousand cash used in investing activities for the nine months ended June 30, 2024 and $(23) thousand for the nine months ended June 30, 2023, related primarily to purchases of property and equipment.

Current wording

There was $(5) thousand cash used in investing activities for the three months ended December 31, 2024 and no cash used in investing activities for the three months ended December 31, 2023

Previous wording

Cash used in financing activities was $(0.2) million for the nine months ended June 30, 2024, related to long-term debt payments related to acquisitions completed during fiscal 2021. Cash used in financing activities was $(0.6) million for the nine months ended June 30, 2023, primarily related to payments of long-term debt and deferred purchase price payable and contingent consideration payments related to acquisitions completed during fiscal 2021.

Current wording

Cash used in financing activities was $ (0.1) million for each of the three months ended December 31, 2024, and 2023, primarily related to payments of long-term debt.

Previous wording

We have historically incurred operating losses and used cash on hand and from financing activities to fund operations as well as develop new products. We continue to maintain tight control over discretionary spending for the 2024 fiscal year. We believe that future revenues and cash flows will supplement our working capital and have an appropriate cost structure to support future revenue growth.

Current wording

We have historically incurred operating losses and used cash on hand and from financing activities to fund operations as well as develop new products. The Company is continuing to maintain tight control over discretionary spending for the 2025 fiscal year. The Company believes that future revenues and cash flows will supplement its working capital and it has an appropriate cost structure to support future revenue growth.

Previous wording

We may offer and sell, from time to time, in one or more offerings, up to $50 million of its debt or equity securities, or any combination thereof. Such securities offerings may be made pursuant to our currently effective registration statement on Form S-3 (File No. 333-262764), which was initially filed with the Securities and Exchange Commission on February 16, 2022, and declared effective on March 4, 2022 (the “Shelf Registration Statement”). A complete description of the types of securities that we may sell is described in the Preliminary Prospectus contained in the Shelf Registration Statement. As of the date of the filing of this Quarterly Report, there are no active offerings for the sale or obligations to purchase any of our securities pursuant to the Shelf Registration Statement. There can be no assurances that we will offer any securities for sale or that if we do offer any securities that we will be successful in selling any portion of the securities offered on a timely basis if at all, or on terms acceptable to us. Further, our ability to offer or sell such securities may be limited by rules of the NASDAQ Capital Market.

Current wording

We may offer and sell, from time to time, in one or more offerings, up to $50 million of its debt or equity securities, or any combination thereof. Such securities offerings may be made pursuant to the Company’s currently effective registration statement on Form S-3 (File No. 333-262764), which was initially filed with the Securities and Exchange Commission on February 16, 2022 and declared effective on March 4, 2022 (the “Shelf Registration Statement”). A complete description of the types of securities that the Company may sell is described in the Preliminary Prospectus contained in the Shelf Registration Statement. As of the date of the filing of this Quarterly Report, there are no active offerings for the sale or obligations to purchase any of the Company’s securities pursuant to the Shelf Registration Statement. There can be no assurances that the Company will offer any securities for sale or that if the Company does offer any securities that it will be successful in selling any portion of the securities offered on a timely basis if at all, or on terms acceptable to us. Further, our ability to offer or sell such securities may be limited by the rules of the NASDAQ Capital Market.

Previous wording

We lease all of our office locations. The gross obligations for operating leases is $0.3 million, of which $0.2 million is expected to be paid in the next twelve months. Debt payments on our various debt obligations total $0.6 million of which $0.2 million is expected to be paid in the next twelve months.

Current wording

We lease all of our office locations. The gross obligations for operating leases is $0.1 million, of which all is expected to be paid in the next twelve months. Debt payments on our various debt obligations total $0.4 million of which $0.2 million is expected to be paid in the next twelve months.